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UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-21566

Name of Fund: BlackRock Floating Rate Income Trust (BGT)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock
Floating Rate 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: 10/31/2009

Date of reporting period: 10/31/2009

Item 1 – Report to Stockholders



EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS

Annual Report

OCTOBER 31, 2009

BlackRock Credit Allocation Income Trust I, Inc. (PSW)

BlackRock Credit Allocation Income Trust II, Inc. (PSY)

BlackRock Credit Allocation Income Trust III (BPP)

BlackRock Credit Allocation Income Trust IV (BTZ)

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

BlackRock Floating Rate Income Trust (BGT)

NOT FDIC INSURED

MAY LOSE VALUE

NO BANK GUARANTEE


Table of Contents   
  Page 
Section 19(b) Disclosure  2 
Dear Shareholder  3 
Annual Report:   
Fund Summaries  4 
The Benefits and Risks of Leveraging  10 
Derivative Financial Instruments  10 
Financial Statements:   
   Schedules of Investments  11 
   Statements of Assets and Liabilities  36 
   Statements of Operations  37 
   Statements of Changes in Net Assets  38 
   Statement of Cash Flows  40 
Financial Highlights  41 
Notes to Financial Statements  47 
Report of Independent Registered Public Accounting Firm  58 
Important Tax Information  59 
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements  60 
Automatic Dividend Reinvestment Plans  64 
Officers and Directors  66 
Additional Information  69 

Section 19(b) Disclosure

BlackRock Credit Allocation Income Trust IV (BTZ) and BlackRock Enhanced Capital and Income Fund, Inc. (CII) (collectively, the “Funds”), acting pursuant to
a Securities and Exchange Commission (“SEC”) exemptive order and with the approval of each Fund’s Board of Directors/Trustees (the “Board”), each have
adopted a plan, consistent with its investment objectives and policies to support a level distribution of income, capital gains and/or return of capital (“Plan”).
In accordance with the Plans, the Funds currently distribute the following fixed amounts per share on a monthly basis for BTZ and a quarterly basis for CII:

Exchange Symbol  Amount Per Common Share 
BTZ  $ 0.100 
CII  $ 0.485 

The fixed amounts distributed per share are subject to change at the discretion of each Fund’s Board. Under its Plan, each Fund will distribute all available
investment income to its shareholders, consistent with its primary investment objectives and as required by the Internal Revenue Code of 1986, as amended
(the “Code”). If sufficient investment income is not available on a monthly/quarterly basis, the Funds will distribute long-term capital gains and/or return of
capital to shareholders in order to maintain a level distribution. Each monthly/quarterly distribution to shareholders is expected to be at the fixed amount
established by the Board, except for extraordinary distributions and potential distribution rate increases or decreases to enable the Funds to comply with
the distribution requirements imposed by the Code.

Shareholders should not draw any conclusions about the Funds’ investment performance from the amount of these distributions or from the terms of the Plan.
Each Fund’s total return performance on net asset value is presented in its financial highlights table.

The Board may amend, suspend or terminate a Fund’s Plan without prior notice if it deems such actions to be in the best interests of the Fund or its share-
holders. The suspension or termination of the Plan could have the effect of creating a trading discount (if the Fund’s stock is trading at or above net asset
value) or widening an existing trading discount. The Funds are subject to risks that could have an adverse impact on their ability to maintain level distri-
butions. Examples of potential risks include, but are not limited to, economic downturns impacting the markets, decreased market volatility, companies sus-
pending or decreasing corporate dividend distributions and changes in the Code. Please refer to each Fund’s prospectus for a more complete description
of its risks.

Please refer to Additional Information for a cumulative summary of the Section 19(a) notices for each Fund’s current fiscal period. Section 19(a) notices for
the Funds, as applicable, are available on the BlackRock website www.blackrock.com.

2 ANNUAL REPORT OCTOBER 31, 2009


Dear Shareholder

Over the past 12 months, we have witnessed a seismic shift in market sentiment — from fear and pessimism during the worst economic decline and crisis

of confidence in financial markets since The Great Depression to increasing optimism amid emerging signs of recovery. The period began in the midst of an

intense deterioration in global economic activity and financial markets in the final months of 2008 and the early months of 2009. The collapse of confi-

dence resulted in massive government policy intervention on a global scale in the financial system and the economy. The tide turned dramatically in March

2009, however, on the back of new US government initiatives, as well as better-than-expected economic data and upside surprises in corporate earnings.

Not surprisingly, global equity markets endured extreme volatility over the past 12 months, starting with steep declines and heightened risk aversion in the

early part of the reporting period, which eventually gave way to an impressive rally that began in March. Although there have been fits and starts along the

way and a few modest corrections, the new bull market has pushed all major US indices well into positive territory for 2009. The experience in international

markets was similar to that in the United States. In particular, emerging markets (which were less affected by the global credit crunch and are experiencing

faster economic growth rates when compared to the developed world) have posted impressive gains since the rally began.

In fixed income markets, the flight-to-safety premium in Treasury securities prevailed during the equity market downturn, which drove yields sharply lower,

but concerns about deficit spending, debt issuance, inflation and dollar weakness have kept Treasury yields range bound in recent months. As economic

and market conditions began to improve in early 2009, near-zero interest rates on risk-free assets prompted many investors to reallocate money from cash

investments into higher-yielding and riskier non-Treasury assets. The high yield sector was the greatest beneficiary of this move, having decisively outpaced

all other taxable asset classes since the start of 2009. Similarly, the municipal bond market is on pace for its best performance year ever in 2009, following

one of its worst years in 2008. Investor demand remains strong for munis, helping to create a highly favorable technical backdrop. Municipal bond mutual

funds are seeing record inflows, reflecting the renewed investor interest in the asset class.

As a result of the rebound in sentiment and global market conditions, most major benchmark indexes are now in positive territory for both the

6- and 12-month periods.

Total Returns as of October 31, 2009  6-month  12-month 
US equities (S&P 500 Index)  20.04%  9.80% 
Small cap US equities (Russell 2000 Index)  16.21  6.46 
International equities (MSCI Europe, Australasia, Far East Index)  31.18  27.71 
US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index*)  (0.79)  8.12 
Taxable fixed income (Barclays Capital US Aggregate Bond Index)  5.61  13.79 
Tax-exempt fixed income (Barclays Capital Municipal Bond Index)  4.99  13.60 
High yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)  27.72  48.65 
* Formerly a Merrill Lynch index.     
       Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index.   

The market environment has visibly improved since the beginning of the year, but a great deal of uncertainty and risk remain. Through periods of market
turbulence, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. For additional market perspective and investment
insight, visit the most recent issue of our award-winning Shareholder® magazine at www.blackrock.com/shareholdermagazine. As always, we thank you
for entrusting BlackRock with your investments, and we look forward to continuing to serve you in the months and years ahead.


Announcement to Shareholders

On December 1, 2009, BlackRock, Inc. and Barclays Global Investors, N.A. combined to form one of the world's preeminent investment management firms.

The new company, operating under the BlackRock name, manages $3.19 trillion in assets** and offers clients worldwide a full complement of active man-

agement, enhanced and index investment strategies and products, including individual and institutional separate accounts, mutual funds and other pooled

investment vehicles, and the industry-leading iShares platform of exchange traded funds.

** Data is as of September 30, 2009, is subject to change, and is based on a pro forma estimate of assets under management and other data at BlackRock, Inc.
and Barclays Global Investors.

THIS PAGE NOT PART OF YOUR FUND REPORT 3


Fund Summary as of October 31, 2009 BlackRock Credit Allocation Income Trust I, Inc.

Investment Objective

BlackRock Credit Allocation Income Trust I, Inc. (PSW) (formerly BlackRock Preferred and Corporate Income Strategies Fund, Inc.) (the “Fund”) seeks to
provide shareholders with high current income and capital appreciation. The Fund seeks to achieve its objectives by investing primarily in credit-related securi-
ties, including, but not limited to, investment grade corporate bonds, high yield bonds, bank loans, preferred securities or convertible bonds or derivatives with
economic characteristics similar to these credit-related securities.

Effective November 13, 2009, BlackRock Preferred and Corporate Income Strategies Fund, Inc. was renamed BlackRock Credit Allocation Income Trust I, Inc.

The Board approved a change to the Fund’s non-fundamental investment policies during the period. Please refer to page 70 in the Additional Information
section.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 37.59% based on market price and 46.46% based on net asset value (“NAV”). For the
same period, the closed-end Lipper Income & Preferred Stock Funds category posted an average return of 39.55% on a market price basis and 40.36% on
a NAV basis. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between
performance based on price and performance based on NAV. Strong annual performance has been driven by the Fund’s positioning to fully capture the
near-term strength anticipated in the preferred sector during 2009. The Fund benefited from an overweight allocation to institutional hybrids (preferred secu-
rities available only over-the-counter to institutional investors) as the sector continued its dramatic outperformance during 2009 relative to retail preferred
securities, which are exchange traded. This position also served as a performance detractor when the preferred sector deteriorated during the fourth quarter
of 2008. Performance benefited from participation in several additional issuer-related tenders in preferred equity exchanges, along with an overweight in
the insurance sector. A generally large position in short-term securities proved beneficial as well — most notably during 2008 and into the first quarter
of 2009 — as it preserved NAV better than had the Fund been fully invested. Finally, the Fund notably reduced leverage in response to rating agency
methodology changes for preferred securities requiring greater collateral due to increased volatility in the sector, which detracted from performance.

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

     Fund Information                 
  Symbol on New York Stock Exchange (“NYSE”)            PSW 
  Initial Offering Date            August 1, 2003 
  Yield based on Closing Market Price as of October 31, 2009 ($8.24)1        8.74% 
  Current Monthly Distribution per Common Share2            $0.06 
  Current Annualized Distribution per Common Share2            $0.72 
  Leverage as of October 31, 20093              32% 
     1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.   
         Past performance does not guarantee future results.             
     2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain. 
     3 Represents reverse repurchase agreements and Auction Market Preferred Shares (“Preferred Shares”) as a percentage of total managed assets, 
         which is the total assets of the Fund (including any assets attributable to any borrowings and Preferred Shares) minus the sum of liabilities (other 
         than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of 
         Leveraging on page 10.               
  The table below summarizes the changes in the Fund’s market price and NAV per share:       
        10/31/09  10/31/08  Change  High  Low 
  Market Price      $8.24  $7.00  17.71%  $8.52  $3.44 
  Net Asset Value      $9.31  $7.43  25.30%  $9.31  $4.55 
  The following unaudited charts show the portfolio composition and credit quality allocations of the Fund’s total investments: 
       Portfolio Composition                     Credit Quality Allocations4     
    10/31/09  10/31/08        10/31/09  10/31/08 
  Preferred Securities       58%  87%         AA/Aa        14% 
  Short-Term Securities  29  11         A/A      26%  36 
  Corporate Bonds  13  2         BBB/Baa    62  36 
               BB/Ba      8  4 
               B/B      2   
               Not Rated    2  10 
        4 Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investor 
                       Service (“Moody’s”) ratings.     
4       ANNUAL REPORT        OCTOBER 31, 2009     


Fund Summary as of October 31, 2009 BlackRock Credit Allocation Income Trust II, Inc.

Investment Objective

BlackRock Credit Allocation Income Trust II, Inc. (PSY) (formerly BlackRock Preferred Income Strategies Fund, Inc.) (the “Fund”) seeks to provide share-
holders with current income and capital appreciation. The Fund seeks to achieve its objectives by investing primarily in credit-related securities, including,
but not limited to, investment grade corporate bonds, high yield bonds, bank loans, preferred securities or convertible bonds or derivatives with economic
characteristics similar to these credit-related securities.

Effective November 13, 2009, BlackRock Preferred Income Strategies Fund, Inc. was renamed BlackRock Credit Allocation Income Trust II, Inc.

The Board approved a change to the Fund’s non-fundamental investment policies during the period. Please refer to page 70 in the Additional Information
section.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 29.37% based on market price and 48.36% based on NAV. For the same period, the
closed-end Lipper Income & Preferred Stock Funds category posted an average return of 39.55% on a market price basis and 40.36% on a NAV basis.
All returns reflect reinvestment of dividends. The Fund moved from a premium to a discount to NAV by year-end, which accounts for the difference between
performance based on price and performance based on NAV. Strong annual performance has been driven by the Fund’s positioning to fully capture the
near-term strength anticipated in the preferred sector during 2009. The Fund benefited from an overweight allocation to institutional hybrids (preferred secu-
rities available only over-the-counter to institutional investors) as the sector continued its dramatic outperformance during 2009 relative to retail preferred
securities, which are exchange traded. This position also served as a performance detractor when the preferred sector deteriorated during the fourth quarter
of 2008. Performance benefited from participation in several additional issuer-related tenders in preferred equity exchanges, along with an overweight in
the insurance sector. A generally large position in short-term securities proved beneficial as well — most notably during 2008 and into the first quarter
of 2009 — as it preserved NAV better than had the Fund been fully invested. Finally, the Fund notably reduced leverage in response to rating agency
methodology changes for preferred securities requiring greater collateral due to increased volatility in the sector, which detracted from performance.

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

Fund Information                 
  Symbol on NYSE              PSY 
  Initial Offering Date            March 28, 2003 
  Yield on Closing Market Price as of October 31, 2009 ($8.90)1        10.11% 
  Current Monthly Distribution per Common Share2          $ 0.075 
  Current Annualized Distribution per Common Share2          $ 0.900 
  Leverage as of October 31, 20093              30% 
     1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.   
         Past performance does not guarantee future results.             
     2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain. 
     3 Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund 
         (including any assets attributable to any borrowings and Preferred Shares) minus the sum of liabilities (other than borrowings representing financial 
         leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 10.   
  The table below summarizes the changes in the Fund’s market price and NAV per share:       
      10/31/09  10/31/08  Change  High  Low 
  Market Price    $ 8.90  $8.10  9.88%  $ 9.20  $3.69 
  Net Asset Value    $10.03  $7.96  26.01%  $10.03  $4.60 
  The following unaudited charts show the portfolio composition and credit quality allocations of the Fund’s total investments: 
       Portfolio Composition      Credit Quality Allocations4     
    10/31/09  10/31/08        10/31/09  10/31/08 
  Preferred Securities  88%  93%   AA/Aa      1%  15% 
  Short-Term Securities  9  4   A/A      26  34 
  Corporate Bonds  3  3   BBB/Baa    56  28 
         BB/Ba      14  6 
         B/B      3   
         Not Rated      17 
             4 Using the higher of S&P’s or Moody’s ratings.   
       ANNUAL REPORT        OCTOBER 31, 2009    5 


Fund Summary as of October 31, 2009 BlackRock Credit Allocation Income Trust III

Investment Objective

BlackRock Credit Allocation Income Trust III (BPP) (formerly BlackRock Preferred Opportunity Trust) (the “Fund”) seeks high current income consistent
with capital preservation. The Fund seeks to achieve its objectives by investing primarily in credit-related securities, including, but not limited to, investment
grade corporate bonds, high yield bonds, bank loans, preferred securities or convertible bonds or derivatives with economic characteristics similar to these
credit-related securities.

Effective November 13, 2009, BlackRock Preferred Opportunity Trust was renamed BlackRock Credit Allocation Income Trust III.

The Board approved a change to the Fund’s non-fundamental investment policies during the period. Please refer to page 70 in the Additional Information
section.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 36.42% based on market price and 47.16% based on NAV. For the same period, the
closed-end Lipper Income & Preferred Stock Funds category posted an average return of 39.55% on a market price basis and 40.36% on a NAV basis. All
returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance
based on price and performance based on NAV. Strong annual performance has been driven by the Fund’s positioning to fully capture the near-term
strength anticipated in the preferred sector during 2009. The Fund benefited from an overweight allocation to institutional hybrids (preferred securities avail-
able only over-the-counter to institutional investors) as the sector continued its dramatic outperformance during 2009 relative to retail preferred securities,
which are exchange traded. This position also served as a performance detractor when the preferred sector deteriorated during the fourth quarter of 2008.
Performance benefited from participation in several additional issuer-related tenders in preferred equity exchanges, along with an overweight in the insur-
ance sector. A generally large position in short-term securities proved beneficial as well — most notably during 2008 and into the first quarter of 2009 —
as it preserved NAV better than had the Fund been fully invested. Finally, the Fund notably reduced leverage in response to rating agency methodology
changes for preferred securities requiring greater collateral due to increased volatility in the sector, which detracted from performance.

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

     Fund Information                 
  Symbol on NYSE              BPP 
  Initial Offering Date            February 28, 2003 
  Yield on Closing Market Price as of October 31, 2009 ($9.94)1          8.75% 
  Current Monthly Distribution per Common Share2            $0.0725 
  Current Annualized Distribution per Common Share2            $0.8700 
  Leverage as of October 31, 20093              29% 
     1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.   
         Past performance does not guarantee future results.             
     2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain. 
     3 Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund 
         (including any assets attributable to any borrowings and Preferred Shares) minus the sum of liabilities (other than borrowings representing financial 
         leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 10. 
  The table below summarizes the changes in the Fund’s market price and NAV per share:       
      10/31/09  10/31/08  Change  High  Low 
  Market Price    $ 9.94  $8.51  16.80%  $10.35  $4.00 
  Net Asset Value    $11.05  $8.77  26.00%  $11.13  $5.06 
  The following unaudited charts show the portfolio composition and credit quality allocations of the Fund’s total investments: 
       Portfolio Composition      Credit Quality Allocations4     
    10/31/09  10/31/08        10/31/09  10/31/08 
  Preferred Securities  69%  90%   AA/Aa      4%             16% 
  Short-Term Securities  23  3   A/A      28  39 
  Corporate Bonds  8  7   BBB/Baa    45  24 
         BB/Ba      13  5 
         B      5   
         CCC/Caa    5   
         Not Rated      16 
             4 Using the higher of S&P’s or Moody’s ratings.   
6       ANNUAL REPORT        OCTOBER 31, 2009     


Fund Summary as of October 31, 2009 BlackRock Credit Allocation Income Trust IV

Investment Objective

BlackRock Credit Allocation Income Trust IV (BTZ) (formerly BlackRock Preferred and Equity Advantage Trust) (the “Fund”) seeks to achieve high
current income, current gains and capital appreciation. The Fund seeks to achieve its objectives by investing primarily in credit-related securities, including,
but not limited to, investment grade corporate bonds, high yield bonds, bank loans, preferred securities or convertible bonds or derivatives with economic char-
acteristics similar to these credit-related securities.

Effective November 13, 2009, BlackRock Preferred and Equity Advantage Trust was renamed BlackRock Credit Allocation Income Trust IV.

The Board approved a change to the Fund’s non-fundamental investment policies during the period. Please refer to page 70 in the Additional Information
section.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 38.38% based on market price and 41.06% based on NAV. For the same period, the
closed-end Lipper Income & Preferred Stock Funds category posted an average return of 39.55% on a market price basis and 40.36% on a NAV basis. All
returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance
based on price and performance based on NAV. Strong annual performance has been driven by the Fund’s positioning to fully capture the near-term
strength anticipated in the preferred sector during 2009. The Fund benefited from an overweight allocation to institutional hybrids (preferred securities avail-
able only over-the-counter to institutional investors) as the sector continued its dramatic outperformance during 2009 relative to retail preferred securities,
which are exchange traded. This position also served as a performance detractor when the preferred sector deteriorated during the fourth quarter of 2008.
Performance benefited from participation in several additional issuer-related tenders in preferred equity exchanges, along with an overweight in the insur-
ance sector. A generally large position in short-term securities proved beneficial as well — most notably during 2008 and into the first quarter of 2009 —
as it preserved NAV better than had the Fund been fully invested. Finally, the Fund notably reduced leverage in response to rating agency methodology
changes for preferred securities requiring greater collateral due to increased volatility in the sector, which detracted from performance.

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

Fund Information                 
  Symbol on NYSE              BTZ 
  Initial Offering Date            December 27, 2006 
  Yield on Closing Market Price as of October 31, 2009 ($10.96)1        10.95% 
  Current Monthly Distribution per Common Share2          $ 0.10 
  Current Annualized Distribution per Common Share2          $ 1.20 
  Leverage as of October 31, 20093              31% 
     1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.   
         Past performance does not guarantee future results.             
     2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain. 
     3 Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund 
         (including any assets attributable to any borrowings and Preferred Shares) minus the sum of liabilities (other than borrowings representing financial 
         leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 10.   
  The table below summarizes the changes in the Fund’s market price and NAV per share:       
        10/31/09  10/31/08  Change  High  Low 
  Market Price      $10.96  $ 9.36  17.09%  $11.49  $4.56 
  Net Asset Value      $12.64  $10.59  19.36%  $12.69  $6.89 
  The following unaudited charts show the portfolio composition of the Fund’s total investments and credit quality allocations of the 
  Fund’s total investments excluding Common Stocks:             
       Portfolio Composition                     Credit Quality Allocations4     
    10/31/09  10/31/08        10/31/09  10/31/08 
  Preferred Securities  57%  59%         AA/Aa      4%  15% 
  Short-Term Securities  33  21         A/A      33  37 
  Corporate Bonds  4  4         BBB/Baa    53  30 
  Common Stocks  6  16         BB/Ba      6  2 
               B/B      4  16 
                   4 Using the higher of S&P’s or Moody’s ratings.   
       ANNUAL REPORT        OCTOBER 31, 2009    7 


Fund Summary as of October 31, 2009  BlackRock Enhanced Capital and Income Fund, Inc. 
     Investment Objective   
BlackRock Enhanced Capital and Income Fund, Inc. (CII) (the “Fund”) seeks to provide investors with a combination of current income and capital 
appreciation. The Fund seeks to achieve its investment objective by investing primarily in a diversified portfolio of common stocks in an attempt to 
generate current income and by employing a strategy of writing (selling) call options on equity indexes in an attempt to generate gains from option 
premiums primarily on the S&P 500 Index.   
The Board approved a change to the Fund’s option writing policy during the period. Please refer to page 70 in the Additional Information section. 
       No assurance can be given that the Fund’s investment objective will be achieved.   
     Performance   
For the 12 months ended October 31, 2009, the Fund returned 29.88% based on market price and 22.01% based on NAV. For the same period, the 
benchmark S&P 500 Citigroup Value Index returned 2.98% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which 
narrowed significantly during the period, accounts for the difference between performance based on price and performance based on NAV. The main con- 
tributor to Fund performance relative to the S&P 500 Citigroup Value Index was the Option strategy that was implemented by the Fund. The option strategy 
contributed almost 75% of the outperformance over the index. From an equity holdings standpoint, the main contributors were an underweight and stock 
selection in financials, stock selection in health care and industrials, and overweights in the information technology and energy sectors. The main detractors 
from performance for the one-year period included stock selection in materials and consumer staples, as well as an underweight in the consumer 
discretionary sector.   
       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.   

     Fund Information               
  Symbol on NYSE            CII 
  Initial Offering Date          April 30, 2004 
  Yield on Closing Market Price as of October 31, 2009 ($13.76)1        14.10% 
  Current Quarterly Distribution per share2          $ 0.485 
  Current Annualized Distribution per share2          $ 1.940 
  1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.   
         Past performance does not guarantee future results.             
  2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain. 
  The table below summarizes the changes in the Fund’s market price and NAV per share:       
      10/31/09  10/31/08  Change  High  Low 
  Market Price    $13.76  $12.37  11.24%  $15.70  $ 7.92 
  Net Asset Value    $14.40  $13.78  4.50%  $14.99  $10.62 
  The following unaudited charts show the ten largest holdings and sector allocations of the Fund’s long-term investments:   
       Ten Largest Holdings                   Sector Allocations       
    10/31/09        10/31/09  10/31/08 
  The Travelers Cos., Inc.         4%         Financials    19%  16% 
  JPMorgan Chase & Co.  3         Information Technology    17  15 
  LSI Corp.  3         Health Care    13  4 
  Chevron Corp.  3         Consumer Staples    12  23 
  Schering-Plough Corp.  3         Energy      11  15 
  Bristol-Myers Squibb Co.  3         Industrials    9  7 
  Exxon Mobil Corp.  3         Telecommunication Services  7  6 
  Kimberly-Clark Corp.  3         Consumer Discretionary  6  6 
  Kraft Foods, Inc.  3         Materials    3  3 
  Time Warner, Inc.  3         Utilities      3  5 
                     For Fund compliance purposes, the Fund’s sector classifications refer 
                     to any one or more of the sector sub-classifications used by one or 
                     more widely recognized market indexes or ratings group indexes, 
                     and/or as defined by Fund management. This definition may not 
                     apply for purposes of this report, which may combine sector sub- 
                     classifications for reporting ease.     
8       ANNUAL REPORT      OCTOBER 31, 2009     


Fund Summary as of October 31, 2009 BlackRock Floating Rate Income Trust

Investment Objective

BlackRock Floating Rate Income Trust (BGT) (formerly BlackRock Global Floating Rate Income Trust) (the “Fund”) seeks to provide a high level of current
income and to seek the preservation of capital. The Fund seeks to achieve its objective by investing in a global portfolio of primarily floating and variable
rate securities.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 54.14% based on market price and 39.51% based on NAV. For the same period, the
closed-end Lipper Loan Participation Funds category posted an average return of 39.76% on a market price basis and 25.60% on a NAV basis. All returns
reflect reinvestment of dividends. (The performance of the Lipper category does not necessarily correlate to that of the Fund, as the Lipper group comprises
both closed-end funds that employ leverage and continuously offered closed-end funds that do not. For this reporting period, those Lipper peers that do not
employ leverage were at a disadvantage given the market rally.) The Fund's discount to NAV, which narrowed during the period, accounts for the difference
between performance based on price and performance based on NAV. For the first two months of the reporting period, the high yield loan market was under
extreme pressure and lost 10.9%, as measured by the Credit Suisse Leveraged Loan Index. However, this brief period of underperformance was followed by the
market’s strongest results ever, as the sector gained more than 40% for the period January 1, 2009 to October 31, 2009. On average, market performance was
positive and the Fund’s reduction of leverage in response to higher collateral requirements imposed by the major rating agencies had a negative effect on
absolute performance. Relative to its Lipper peers, the Fund gained from both maintaining leverage and focusing on higher-quality sectors and structures, which
benefited most during the sharp rally in 2009. Conversely, the Fund’s cash position hurt performance during the period.

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.

Fund Information                 
  Symbol on NYSE              BGT 
  Initial Offering Date            August 30, 2004 
  Yield on Closing Market Price as of October 31, 2009 ($12.58)1          6.44% 
  Current Monthly Distribution per Common Share2            $0.0675 
  Current Annualized Distribution per Common Share2            $0.8100 
  Leverage as of October 31, 20093              19% 
     1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.   
         Past performance does not guarantee future results.             
     2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain. 
     3 Represents loan outstanding and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund (including any 
         assets attributable to any borrowings and Preferred Shares) minus the sum of liabilities (other than borrowings representing financial leverage). 
         For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 10.   
  The table below summarizes the changes in the Fund’s market price and NAV per share:       
        10/31/09  10/31/08  Change  High  Low 
  Market Price      $12.58  $ 9.63  30.63%  $12.98  $6.88 
  Net Asset Value      $13.29  $11.24  18.24%  $13.35  $8.86 
  The following unaudited charts show the portfolio composition of the Fund’s long-term investments and credit quality allocations 
  of the Fund’s long-term investments excluding floating rate loan interests:         
       Portfolio Composition                     Credit Quality Allocations4     
    10/31/09  10/31/08        10/31/09  10/31/08 
  Floating Rate Loan Interests  76%  79%         AAA/Aaa      16%   
  Corporate Bonds  20  14         A/A      4  20% 
  Foreign Government Obligations  3  7         BBB/Baa    27  30 
  Other Interests  1           BB/Ba      17  16 
               B/B      22  23 
               CCC/Caa    6  10 
               C/C      5   
               D      1   
               Not Rated    2  1 
        4 Using the higher of S&P’s or Moody’s ratings.   
       ANNUAL REPORT        OCTOBER 31, 2009    9 


The Benefits and Risks of Leveraging

The Funds may utilize leverage to seek to enhance the yield and NAV of their
Common Shares. However, these objectives cannot be achieved in all interest
rate environments.

The Funds may utilize leverage through borrowings, the issuance of
Preferred Shares or by entering into reverse repurchase agreements. In
general, the concept of leveraging is based on the premise that the cost of
assets to be obtained from leverage will be based on short-term interest
rates, which normally will be lower than the income earned by each Fund
on its longer-term portfolio investments. To the extent that the total assets
of each Fund (including the assets obtained from leverage) are invested in
higher-yielding portfolio investments, each Fund’s Common Shareholders
will benefit from the incremental net income.

The interest earned on securities purchased with the proceeds from lever-
age is paid to Common Shareholders in the form of dividends, and the
value of these portfolio holdings is reflected in the per share NAV of each
Fund’s Common Shares. However, in order to benefit Common Shareholders,
the yield curve must be positively sloped; that is, short-term interest rates
must be lower than long-term interest rates. If the yield curve becomes
negatively sloped, meaning short-term interest rates exceed long-term
interest rates, income to Common Shareholders will be lower than if the
Funds had not used leverage.

To illustrate these concepts, assume a Fund’s Common Shares capitalization
is $100 million and it borrows and/or issues Preferred Shares for an addi-
tional $50 million, creating a total value of $150 million available for invest-
ment in long-term securities. If prevailing short-term interest rates are 3%
and long-term interest rates are 6%, the yield curve has a strongly positive
slope. In this case, the Fund pays interest expense and/or dividends on
the $50 million of Preferred Shares based on the lower short-term interest
rates. At the same time, the securities purchased by the Fund with assets
received from the borrowings and/or issuance of Preferred Shares can earn
income based on long-term interest rates. In this case, the interest expense
and/or dividends paid to Preferred Shareholders are significantly lower
than the income earned on the Fund’s long-term investments, and there-
fore the Common Shareholders are the beneficiaries of the incremental
net income.

If short-term interest rates rise, narrowing the differential between short-
term and long-term interest rates, the incremental net income pickup on
the Common Shares will be reduced or eliminated completely. Furthermore,
if prevailing short-term interest rates rise above long-term interest rates of
6%, the yield curve has a negative slope. In this case, the Fund pays divi-
dends on the higher short-term interest rates whereas the Fund’s total port-
folio earns income based on lower long-term interest rates.

Furthermore, the value of a Fund’s 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 redemption
value of the Funds’ borrowings and/or Preferred Shares does not fluctuate
in relation to interest rates. As a result, changes in interest rates can influ-
ence the Funds’ NAV positively or negatively in addition to the impact on
Fund performance from leverage from borrowings.

The use of leverage may enhance opportunities for increased income to the
Funds and Common Shareholders, but as described above, it also creates
risks as short- or long-term interest rates fluctuate. Leverage also will gener-
ally cause greater changes to each Fund’s NAV, market price and dividend
rates than a comparable portfolio without leverage. If the income derived
from securities purchased with assets received from leverage exceeds the
cost of leverage, each Fund’s net income will be greater than if leverage had
not been used. Conversely, if the income from the securities purchased is
not sufficient to cover the cost of leverage, each Fund’s net income will be
less than if leverage had not been used, and therefore the amount available
for distribution to shareholders will be reduced. Each Fund 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 lever-
age or as required by the terms of leverage instruments which may cause
a Fund to incur losses. The use of leverage may limit each Fund’s ability to
invest in certain types of securities or use certain types of hedging strate-
gies, such as in the case of certain restrictions imposed by ratings agencies
that rate Preferred Shares issued by each Fund. Each Fund will incur
expenses in connection with the use of leverage, all of which are borne by
the Common Shareholders and may reduce income on the Common Shares.

Under the Investment Company Act of 1940, BGT is permitted to borrow
through a credit facility up to 33 1 / 3 % of its total managed assets and the
Funds are permitted to issue Preferred Shares in an amount of up to 50%
of their total managed assets at the time of issuance. Under normal cir-
cumstances, each Fund anticipates that the total economic leverage from
Preferred Shares, reverse repurchase agreements and credit facility borrow-
ings will not exceed 50% of its total managed assets at the time such lever-
age is incurred. As of October 31, 2009, the Funds had economic leverage
from Preferred Shares, reverse repurchase agreements and/or credit facility
borrowings as a percentage of their total managed assets as follows:

  Percent of 
  Leverage 
PSW  32% 
PSY  30% 
BPP  29% 
BTZ  31% 
BGT  19% 

Derivative Financial Instruments

The Funds may invest in various derivative instruments, including financial
futures contracts, swaps, foreign currency exchange contracts and options,
as specified in Note 2 of the Notes to Financial Statements, which consti-
tute forms of economic leverage. Such instruments are used to obtain
exposure to a market without owning or taking physical custody of securi-
ties or to hedge market, equity, credit, interest rate and/or foreign currency
exchange rate risks. Such derivative instruments involve risks, including the
imperfect correlation between the value of a derivative instrument and the
underlying asset, possible default of the counterparty to the transaction
and illiquidity of the derivative instrument. Each Fund’s ability to success-

fully use a derivative instrument depends on the investment advisor’s
ability to accurately predict pertinent market movements, which cannot be
assured. The use of derivative instruments may result in losses greater than
if they had not been used, may require the Funds to sell or purchase port-
folio securities at inopportune times or at distressed values, may limit the
amount of appreciation the Funds can realize on an investment or may
cause the Funds to hold a security that they might otherwise sell. The
Funds’ investments in these instruments are discussed in detail in the
Notes to Financial Statements.

10 ANNUAL REPORT OCTOBER 31, 2009


Schedule of Investments October 31, 2009    BlackRock Credit Allocation Income Trust I, Inc. (PSW) 
            (Percentages shown are based on Net Assets) 
    Par            Par   
Corporate Bonds    (000)           Value  Capital Trusts      (000)  Value 
Insurance — 2.5%          Multi-Utilities — 2.8%         
Oil Insurance Ltd., 7.56% (a)(b)(c)  $ 1,000  $ 706,200  Dominion Resources Capital Trust I,       
QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)    1,484  1,695,246  7.83%, 12/01/27 (f)    $ 1,200 $  1,202,650 
      2,401,446  Dominion Resources, Inc., 7.50% (c)    1,051  1,029,980 
          Puget Sound Energy, Inc. Series A, 6.97%, 6/01/67 (c)  475  415,587 
Media — 12.5%                   
COX Communications, Inc., 8.38%, 3/01/39 (a)    10,000  11,988,640          2,648,217 
Total Corporate Bonds — 15.0%      14,390,086  Oil, Gas & Consumable Fuels — 1.3%       
          Enterprise Products Operating LLC, 8.38%, 8/01/66 (c)  825  808,500 
          TransCanada PipeLines Ltd., 6.35%, 5/15/67 (c)    500  465,397 
Preferred Securities                  1,273,897 
          Total Capital Trusts — 33.5%        32,110,050 
Capital Trusts                   
Building Products — 0.7%                   
C8 Capital SPV Ltd., 6.64% (a)(b)(c)    980  691,018  Preferred Stocks      Shares   
Capital Markets — 5.8%          Commercial Banks — 8.1%         
Ameriprise Financial, Inc., 7.52%, 6/01/66 (c)    1,900  1,615,000  First Tennessee Bank NA, 3.90% (a)(c)    1,176  589,838 
Lehman Brothers Holdings Capital Trust V,          HSBC USA, Inc.:         
3.64% (b)(c)(d)(e)    1,600    160       Series D, 4.50% (c)      35,000  734,300 
State Street Capital Trust III, 8.25% (b)(c)    725  731,257       Series H, 6.50%      168,000  3,410,400 
State Street Capital Trust IV, 1.30%, 6/01/67 (c)    4,740  3,180,090  Provident Financial Group, Inc., 7.75%    42,000  1,013,250 
      5,526,507  Royal Bank of Scotland Group Plc, Series M, 6.40%  5,000  51,700 
Commercial Banks — 3.3%          Santander Finance Preferred SA Unipersonal, 6.80%  72,807  1,992,000 
Bank of Ireland Capital Funding II, LP, 5.57% (a)(b)(c)  429  188,760          7,791,488 
Bank of Ireland Capital Funding III, LP, 6.11% (a)(b)(c)  740  325,600  Diversified Financial Services — 2.0%       
Barclays Bank Plc, 5.93% (a)(b)(c)    500  390,000  Cobank ACB, 7.00% (a)      38,000  1,326,439 
First Empire Capital Trust II, 8.28%, 6/01/27    910  691,337  ING Groep NV, 7.20%      35  612,942 
National City Preferred Capital Trust I, 12.00% (b)(c)    300  343,359           
SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(b)(c)    875  948,675          1,939,381 
Santander Perpetual SA Unipersonal, 6.67% (a)(b)(c)  250  228,123  Electric Utilities — 3.6%         
SunTrust Preferred Capital I, 5.85% (b)(c)    135    88,087  Alabama Power Co., 6.50%      25,000  750,000 
      3,203,941  Entergy Arkansas, Inc., 6.45%      28,800  609,301 
          Entergy Louisiana LLC, 6.95%      22,650  2,119,747 
Diversified Financial Services — 3.0%                   
Farm Credit Bank of Texas Series 1, 7.56% (b)(c)    1,000  701,550          3,479,048 
JPMorgan Chase Capital XXIII, 1.44%, 5/15/77 (c)    3,085  2,172,873  Insurance — 5.8%         
      2,874,423  Aspen Insurance Holdings Ltd., 7.40% (c)    55,000  1,116,500 
          Axis Capital Holdings Ltd.:         
Electric Utilities — 0.5%               Series A, 7.25%      35,000  789,250 
PPL Capital Funding, 6.70%, 3/30/67 (c)    500  430,000       Series B, 7.50% (c)      9,000  673,875 
Insurance — 16.1%          Endurance Specialty Holdings Ltd. Series A, 7.75%  35,200  770,880 
AXA SA, 6.38% (a)(b)(c)    3,585  3,038,287  RenaissanceRe Holding Ltd. Series D, 6.60%    110,000  2,267,100 
Ace Capital Trust II, 9.70%, 4/01/30    500  552,614          5,617,605 
The Allstate Corp., 6.50%, 5/15/57 (c)(f)    3,200  2,736,000           
Chubb Corp., 6.38%, 3/29/67 (c)(g)    500  453,750  Real Estate Investment Trusts (REITs) — 7.4%       
Farmers Exchange Capital, 7.05%, 7/15/28 (a)    500  428,271  BRE Properties, Inc. Series D, 6.75%    10,000  205,200 
Genworth Financial, Inc., 6.15%, 11/15/66 (c)    750  502,500  First Industrial Realty Trust, Inc., 6.24% (c)    610  270,116 
Great West Life & Annuity Insurance Co.,          HRPT Properties Trust:         
 7.15%, 5/16/46 (a)(c)    500  415,000       Series B, 8.75%      97,917  2,257,966 
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(c)    500  525,000       Series C, 7.13%      125,000  2,332,500 
Lincoln National Corp., 7.00%, 5/17/66 (c)    500  410,000  iStar Financial, Inc. Series I, 7.50%    59,500  416,500 
MetLife, Inc., 6.40%, 12/15/66 (f)    500  433,125  Public Storage:         
Nationwide Life Global Funding I, 6.75%, 5/15/67    500  378,967       Series F, 6.45%      10,000  212,500 
Oil Casualty Insurance Ltd., 8.00%, 9/15/34 (a)    915  576,450       Series I, 7.25%      40,000  954,000 
Progressive Corp., 6.70%, 6/15/67 (c)    500  437,973       Series M, 6.63%      20,000  429,000 
Reinsurance Group of America, 6.75%, 12/15/65 (c)  700  542,500          7,077,782 
The Travelers Cos., Inc., 6.25%, 3/15/67 (c)    500  450,000  Wireless Telecommunication Services — 2.8%       
ZFS Finance (USA) Trust II, 6.45%, 12/15/65 (a)(c)(h)  1,800  1,620,000  Centaur Funding Corp., 9.08% (a)      2,720  2,729,350 
ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (a)(c)    146  118,040           
ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)    1,097  888,570  Total Preferred Stocks — 29.7%        28,634,654 
Zenith National Insurance Capital Trust I,                   
8.55%, 8/01/28 (a)    1,000  955,000           
      15,462,047           
Portfolio Abbreviations                   
To simplify the listings of portfolio holdings in the Schedules of     ADR  American Depositary Receipts  MXN  Mexican New Peso   
Investments, the names of many of the securities have been       EUR  Euro    USD  US Dollar     
abbreviated according to the following list:         GBP  British Pound         
See Notes to Financial Statements.                   
ANNUAL REPORT        OCTOBER 31, 2009    11 


Schedule of Investments (continued)        BlackRock Credit Allocation Income Trust I, Inc. (PSW) 
                (Percentages shown are based on Net Assets) 
    Shares                     
Trust Preferreds  (000)    Value                 
Consumer Finance — 2.2%          For Fund compliance purposes, the Fund’s industry classifications refer to any one 
Capital One Capital II, 7.50%, 6/15/66  93  $ 2,060,649    or more of the industry sub-classifications used by one or more widely recognized 
Electric Utilities — 1.3%          market indexes or ratings group indexes, and/or as defined by Fund management. 
PPL Energy Supply LLC, 7.00%, 7/15/46  49    1,263,610    This definition may not apply for purposes of this report, which may combine indus- 
Insurance — 2.0%          try sub-classifications for reporting ease.         
ABN AMRO North America Capital Funding Trust II,          Reverse repurchase agreements outstanding as of October 31, 2009 were 
 2.87% (a)(b)(c)  2    85,988    as follows:             
Lincoln National Capital VI Series F, 6.75%, 9/11/52  90    1,827,781                 
              Interest  Trade  Maturity  Net Closing  Face 
        1,913,769                 
            Counterparty  Rate  Date  Date    Amount  Amount 
Total Trust Preferreds — 5.5%      5,238,028                 
            Barclays Bank Plc 0.75%  10/16/09  11/16/09  $4,975,252  $ 4,972,041 
Total Preferred Securities — 68.7%    65,982,732                 
Total Long Term Investments          Financial futures contracts purchased as of October 31, 2009 were as follows: 
(Cost — $94,148,823) — 83.7%    80,372,818        Expiration    Notional  Unrealized 
            Contracts  Issue  Date       Value  Appreciation 
            50  2-Year U.S.           
                                 Treasury Bond            December 2009  $ 10,793,860  $ 86,609 
Short-Term Securities  Shares        6  30-Year U.S.           
BlackRock Liquidity Funds, TempFund,                               Treasury Bond  December 2009  $ 712,575  8,363 
 Institutional Class, 0.18% (i)(j)  33,286,296  33,286,296    Total            $ 94,972 
Total Short-Term Securities                       
(Cost — $33,286,296) — 34.6%    33,286,296    Credit default swaps on single-name issue — buy protection outstanding as of 
            October 31, 2009 were as follows:         
Total Investments (Cost — $127,435,119*) — 118.3%  113,659,114                 
Other Assets Less Liabilities — 23.6%    22,648,143      Pay        Notional   
Preferred Shares, at Redemption Value — (41.9)%          (40,258,949)    Fixed  Counter-      Amount  Unrealized 
Net Assets Applicable to Common Shares — 100.0%    $ 96,048,308    Issuer  Rate  party  Expiration  (000)  Depreciation 
* The cost and unrealized appreciation (depreciation) of investments as of October 31,    Nordstrom, Inc. 5.20%  Deutsche  June     
  2009, as computed for federal income tax purposes, were as follows:          Bank AG  2014  $ 1,000  $ (168,952) 
  Aggregate cost    $ 127,460,901                 
  Gross unrealized appreciation    $ 2,075,593                 
  Gross unrealized depreciation    (15,877,380)                 
  Net unrealized depreciation    $ (13,801,787)               
(a) Security 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 investors.                       
(b) Security is perpetual in nature and has no stated maturity date.                     
 (c) Variable rate security. Rate shown is as of report date.                     
(d) Non-income producing security.                       
 (e) Issuer filed for bankruptcy and/or is in default of interest payments.                     
 (f) All or a portion of the security has been pledged as collateral in connection with                 
  open reverse repurchase agreements.                       
 (g) All or a portion of the security has been pledged as collateral in connection with                 
  open swaps.                       
(h) All or a portion of the security has been pledged as collateral in connection with                 
  open financial futures contracts.                       
(i) Investments in companies considered to be an affiliate of the Fund, for purposes of                 
  Section 2(a)(3) of the Investment Company Act of 1940, were as follows:                 
    Net                     
  Affiliate  Activity    Income                 
  BlackRock Liquidity Funds, TempFund,                       
  Institutional Class  $ 33,286,296  $ 73,357                 
  BlackRock Liquidity Series, LLC                       
  Cash Sweep Series  $(15,938,424)  $ 56,701                 
 (j) Represents the current yield as of report date.                       
See Notes to Financial Statements.                       
12  ANNUAL REPORT                   OCTOBER 31, 2009       


Schedule of Investments (concluded)  BlackRock Credit Allocation Income Trust I, Inc. (PSW) 
Fair Value Measurements — Various inputs are used in determining the fair value of      Other Financial 
       investments, which are as follows:    Valuation Inputs    Instruments1 
       Level 1 — price quotations in active markets/exchanges for identical assets      Assets  Liabilities 
           and liabilities    Level 1  $ 94,972   
       Level 2 — other observable inputs (including, but not limited to: quoted prices for  Level 2      $ (168,952) 
           similar assets or liabilities in markets that are active, quoted prices for identical  Level 3       
           or similar assets or liabilities in markets that are not active, inputs other than  Total  $ 94,972  $ (168,952) 
           quoted prices that are observable for the assets or liabilities (such as interest         
           rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and  1 Other financial instruments are financial futures contracts and swaps. Financial 
           default rates) or other market-corroborated inputs)    futures contracts and swaps are valued at the unrealized appreciation/depreci- 
       Level 3 — unobservable inputs based on the best information available in the  ation on the instrument.       
           circumstances, to the extent observable inputs are not available (including the  The following is a reconciliation of investments for unobservable inputs (Level 3) 
           Fund’s own assumptions used in determining the fair value of investments)  used in determining fair value:       
       The inputs or methodology used for valuing securities are not necessarily an indica-         
          Investments in 
       tion of the risk associated with investing in those securities. For information about         
          Securities 
       the Fund’s policy regarding valuation of investments and other significant accounting         
       policies, please refer to Note 1 of the Notes to Financial Statements.        Capital Trusts 
       The following tables summarize the inputs used as of October 31, 2009 in  Balance, as of October 31, 2008       
       determining the fair valuation of the Fund’s investments:    Accrued discounts/premiums       
    Realized gain (loss)       
  Investments in  Change in unrealized appreciation/depreciation     
       Valuation Inputs  Securities  Net purchases (sales)       
         Assets  Net transfers in/out Level 3      $ 576,450 
       Level 1    Balance, as of October 31, 2009      $ 576,450 
         Long-Term Investments:           
           Preferred Stocks  $ 19,302,737         
           Trust Preferreds  5,152,040         
         Short-Term Securities  33,286,296         
       Total Level 1  57,741,073         
       Level 2           
         Long-Term Investments:           
           Capital Trusts  31,533,600         
           Corporate Bonds  14,390,086         
           Preferred Stocks  9,331,917         
           Trust Preferreds  85,988         
       Total Level 2  55,341,591         
       Level 3           
         Long-Term Investments:           
           Capital Trusts  576,450         
       Total  $ 113,659,114         
See Notes to Financial Statements.           
ANNUAL REPORT    OCTOBER 31, 2009    13 


Schedule of Investments October 31, 2009  BlackRock Credit Allocation Income Trust II, Inc. (PSY) 
          (Percentages shown are based on Net Assets) 
      Par      Par   
Corporate Bonds      (000)  Value  Capital Trusts  (000)  Value 
Insurance — 2.6%          Insurance (concluded)     
Oil Insurance Ltd., 7.56% (a)(b)(c)  $ 5,000  $ 3,531,000  Principal Life Insurance Co., 8.00%, 3/01/44 (a) $  6,325  $ 5,663,683 
QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)    5,967  6,816,396  Progressive Corp., 6.70%, 6/15/67 (c)(f)  2,000  1,751,894 
Structured Asset Repackaged Trust, Series 2004-1,      Reinsurance Group of America,     
 0.78%, 4/21/11 (a)(c)      299  266,121   6.75%, 12/15/65 (c)  3,000  2,325,000 
Total Corporate Bonds — 2.6%      10,613,517  The Travelers Cos., Inc., 6.25%, 3/15/67 (c)  3,000  2,700,000 
          ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (a)(c)  379  306,418 
          ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)  4,312  3,492,720 
Preferred Securities          Zenith National Insurance Capital Trust I,     
           8.55%, 8/01/28 (a)  3,750  3,581,250 
              85,641,493 
Capital Trusts               
          Multi-Utilities — 3.8%     
Building Products — 0.7%          Dominion Resources Capital Trust I,     
C8 Capital SPV Ltd., 6.64% (a)(b)(c)    3,915  2,760,545   7.83%, 12/01/27  10,000  10,022,080 
Capital Markets — 5.3%          Dominion Resources, Inc., 7.50% (c)  5,449  5,340,020 
Ameriprise Financial, Inc., 7.52%, 6/01/66 (c)    7,600  6,460,000      15,362,100 
Lehman Brothers Holdings Capital Trust V,             
 3.64% (b)(c)(d)(e)      6,400  640  Oil, Gas & Consumable Fuels — 1.4%     
State Street Capital Trust III, 8.25% (b)(c)    2,920  2,945,200  Enterprise Products Operating LLC,     
State Street Capital Trust IV, 1.30%, 6/01/67 (c)  18,235  12,233,953   8.38%, 8/01/66 (c)  2,000  1,960,000 
          TransCanada PipeLines Ltd., 6.35%, 5/15/67 (c)  4,000  3,723,180 
        21,639,793       
              5,683,180 
Commercial Banks — 12.0%               
ABN AMRO North America Holding, Preferred        Road & Rail — 0.9%     
 Capital Repackaging Trust I, 6.52% (a)(b)(c)    12,035  8,544,850  BNSF Funding Trust I, 6.61%, 12/15/55 (c)  3,750  3,548,437 
Bank One Capital III, 8.75%, 9/01/30    2,000  2,252,786  Total Capital Trusts — 49.3%    201,733,947 
Bank of Ireland Capital Funding II, LP,             
 5.57% (a)(b)(c)      1,715  754,600       
Bank of Ireland Capital Funding III, LP,             
 6.11% (a)(b)(c)      2,951  1,298,440  Preferred Stocks  Shares   
Barclays Bank Plc, 5.93% (a)(b)(c)    2,500  1,950,000  Capital Markets — 0.0%     
First Empire Capital Trust II, 8.28%, 6/01/27    3,630  2,757,751  Deutsche Bank Contingent Capital Trust II, 6.55%  530  10,817 
HSBC America Capital Trust I, 7.81%, 12/15/26 (a)  2,000  1,978,198       
HSBC Capital Funding LP/Jersey Channel Islands,      Commercial Banks — 8.3%     
 10.18% (a)(b)(c)(f)      4,835  5,753,650  Barclays Bank Plc, 8.13%  225,000  5,298,750 
HSBC Finance Capital Trust IX, 5.91%, 11/30/35 (c)  7,300  5,767,000  First Tennessee Bank NA, 3.90% (a)(c)  4,650  2,332,266 
Lloyds Banking Group Plc, 6.66%, 11/21/49 (a)(c)  5,000  3,250,000  HSBC USA, Inc.:     
National City Preferred Capital Trust I, 12.00% (b)(c)  1,100  1,258,983       Series D, 4.50% (c)(g)  131,700  2,763,066 
NationsBank Capital Trust III, 0.83%, 1/15/27 (c)  13,470  8,627,037       Series H, 6.50%  120,000  2,436,000 
SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(b)(c)  3,550  3,848,910  Provident Financial Group, Inc., 7.75%  166,800  4,024,050 
Santander Perpetual SA Unipersonal,        Royal Bank of Scotland Group Plc, Series M, 6.40%  15,000  155,100 
 6.67%, 10/29/49 (a)(b)(c)      1,125  1,026,555  SG Preferred Capital II, 6.30% (a)(c)  23,000  13,800,000 
SunTrust Preferred Capital I, 5.85% (b)(c)    307  200,318  Santander Finance Preferred SA Unipersonal, 6.80%  117,094  3,203,692 
        49,269,078      34,012,924 
Diversified Financial Services — 3.7%        Diversified Financial Services — 1.9%     
AgFirst Farm Credit Bank, 8.39%, 12/15/16 (c)    4,000  3,041,668  Cobank ACB, 7.00% (a)(b)  152,000  5,305,758 
Farm Credit Bank of Texas, Series 1, 7.56% (b)(c)  2,500  1,753,875  ING Groep NV, 7.20%  140  2,451,769 
ING Capital Funding Trust III, 8.44% (b)(c)    6,066  5,171,265      7,757,527 
JPMorgan Chase Capital XXIII, 1.44%, 5/15/77 (c)  7,500  5,282,513  Electric Utilities — 3.4%     
        15,249,321  Alabama Power Co.:     
Electric Utilities — 0.6%               5.83%  14,000  349,300 
PPL Capital Funding, 6.70%, 3/30/67 (c)    3,000  2,580,000       6.50%  145,000  4,350,000 
          Entergy Arkansas, Inc., 6.45%  114,400  2,420,281 
Insurance — 20.9%          Entergy Louisiana LLC, 6.95%  49,850  4,665,314 
AON Corp., 8.21%, 1/01/27      2,500  2,475,000  Interstate Power & Light Co., Series B, 8.38%  80,000  2,220,000 
AXA SA, 6.38% (a)(b)(c)      13,470  11,415,825       
Ace Capital Trust II, 9.70%, 4/01/30    5,000  5,526,140      14,004,895 
The Allstate Corp., 6.50%, 5/15/57 (c)    12,775  10,922,625  Insurance — 12.5%     
Chubb Corp., 6.38%, 3/29/67 (c)    2,000  1,815,000  Aspen Insurance Holdings Ltd., 7.40% (c)  194,000  3,938,200 
Farmers Exchange Capital, 7.05%, 7/15/28 (a)    2,500  2,141,357  Axis Capital Holdings Ltd.:     
GE Global Insurance Holding Corp., 7.75%, 6/15/30  10,000  10,207,480       Series A, 7.25%  129,300  2,915,715 
Genworth Financial, Inc., 6.15%, 11/15/66 (c)    3,000  2,010,000       Series B, 7.50% (c)  36,000  2,695,500 
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(c)  2,925  3,071,250  Endurance Specialty Holdings Ltd., Series A, 7.75%  139,200  3,048,480 
Lincoln National Corp., 7.00%, 5/17/66 (c)    3,350  2,747,000  MetLife, Inc., Series B, 6.50%  904,400  19,652,612 
MetLife, Inc., 6.40%, 12/15/66    6,825  5,912,156  Prudential Plc, 6.50%  92,400  1,931,160 
Nationwide Life Global Funding I, 6.75%, 5/15/67  7,000  5,305,545  RenaissanceRe Holding Ltd., Series D, 6.60%  435,000  8,965,350 
Oil Casualty Insurance Ltd., 8.00%, 9/15/34 (a)  3,605  2,271,150  Zurich RegCaPS Funding Trust, 6.58% (a)(c)  9,800  7,699,125 
              50,846,142 
See Notes to Financial Statements.             
14  ANNUAL REPORT                                               OCTOBER 31, 2009     


Schedule of Investments (continued)      BlackRock Credit Allocation Income Trust II, Inc. (PSY) 
              (Percentages shown are based on Net Assets) 
Preferred Stocks  Shares  Value  Short-Term Securities        Shares    Value 
Multi-Utilities — 0.9%      BlackRock Liquidity Funds, TempFund,           
Pacific Gas & Electric Co., Series A, 6.00%  140,000  $ 3,738,000   Institutional Class, 0.18% (h)(i)    41,019,397  $ 41,019,397 
Real Estate Investment Trusts (REITs) — 5.3%      Total Short-Term Securities             
BRE Properties, Inc., Series D, 6.75%  35,000  718,200  (Cost — $41,019,397) — 10.0%            41,019,397 
Developers Diversified Realty Corp., 8.00%  400,000  7,156,000  Total Investments (Cost — $524,066,199*) — 107.5%        440,148,651 
First Industrial Realty Trust, Inc., 6.24% (c)  2,390  1,058,322  Other Assets Less Liabilities — 33.8%          138,235,005 
Firstar Realty LLC, 8.88% (a)  4,000  3,412,500  Preferred Shares, at Redemption Value — (41.3)%      (169,090,727) 
Kimco Realty Corp., Series F, 6.65%  50,000  1,011,500                     
Public Storage:      Net Assets Applicable to Common Shares — 100.0%      $ 409,292,929 
       Series F, 6.45%  40,000  850,000  * The cost and unrealized appreciation (depreciation) of investments as of October 31, 
       Series I, 7.25%  160,000  3,816,000    2009, as computed for federal income tax purposes, were as follows:   
     Series M, 6.63%  71,900  1,542,255                     
Regency Centers Corp., Series D, 7.25%  100,000  2,175,000    Aggregate cost            $ 525,840,523 
    21,739,777    Gross unrealized appreciation        $ 9,977,374 
        Gross unrealized depreciation          (95,669,246) 
Wireless Telecommunication Services — 0.6%                         
Centaur Funding Corp., 9.08% (a)  2,423  2,431,329    Net unrealized depreciation          $ (85,691,872) 
Total Preferred Stocks — 32.9%    134,541,411  (a) Security 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 investors.             
  Shares    (b) Security is perpetual in nature and has no stated maturity date.     
Trust Preferreds  (000)     (c) Variable rate security. Rate shown is as of report date.       
Communications Equipment — 0.4%      (d) Non-income producing security.           
Corporate-Backed Trust Certificates, Motorola                         
 Debenture Backed Series 2002-14,       (e) Issuer filed for bankruptcy and/or is in default of interest payments.   
 8.38%, 11/15/28  80  1,778,167   (f) All or a portion of security held as collateral in connection with open reverse repur- 
Consumer Finance — 3.6%        chase agreements.               
Capital One Capital II, 7.50%, 6/15/66  668  14,799,807   (g) All or a portion of security has been pledged as collateral in connection with open 
Electric Utilities — 2.3%        financial futures contracts.             
Georgia Power Co., Series O, 1.48%, 4/15/33  50  1,229,393  (h) Investments in companies considered to be an affiliate of the Fund, for purposes of 
HECO Capital Trust III, 6.50%, 3/18/34  50  1,167,634    Section 2(a)(3) of the Investment Company Act of 1940, were as follows: 
National Rural Utilities Cooperative Finance Corp.,                         
 6.75%, 2/15/43  50  1,236,387              Net     
PPL Energy Supply LLC, 7.00%, 7/15/46  233  5,970,175    Affiliate          Activity    Income 
    9,603,589    BlackRock Liquidity Funds, TempFund,           
Gas Utilities — 3.7%           Institutional Class    $ 41,019,397    $ 70,651 
Southwest Gas Capital II, 7.70%, 9/15/43  605  14,940,766    BlackRock Liquidity Series, LLC           
           Cash Sweep Series    $(28,803,004)    $ 80,088 
Insurance — 2.7%                         
ABN AMRO North America Capital Funding Trust II,       (i) Represents the current yield as of report date.         
 2.87% (a)(b)(c)  11  477,570     For Fund compliance purposes, the Fund’s industry classifications refer to any one 
Lincoln National Capital VI, Series F,        or more of the industry sub-classifications used by one or more widely recognized 
 6.75%, 9/11/52  200  4,061,735    market indexes or ratings group indexes, and/or as defined by Fund management. 
W.R. Berkley Capital Trust II, 6.75%, 7/26/45  295  6,578,745    This definition may not apply for purposes of this report, which may combine indus- 
    11,118,050    try sub-classifications for reporting ease.           
Total Trust Preferreds — 12.7%    52,240,379     Reverse repurchase agreements outstanding as of October 31, 2009 were as follows: 
Total Preferred Securities — 94.9%    388,515,737        Interest     Trade  Maturity  Net Closing    Face 
Total Long-Term Investments        Counterparty  Rate  Date  Date  Amount    Amount 
(Cost — $483,046,802) — 97.5%    399,129,254    Barclays Bank Plc  0.75%  10/16/09  11/16/09 $ 9,516,732    $ 9,510,590 
         Financial futures contracts purchased as of October 31, 2009 were as follows: 
              Expiration  Notional    Unrealized 
        Contracts    Issue  Date  Amount    Appreciation 
        25  30-Year U.S.             
          Treasury Bonds December 2009  $2,969,061    $ 34,845 
         Credit default swaps on single-name issue — buy protection outstanding as of 
        October 31, 2009 were as follows:           
            Pay      Notional     
            Fixed  Counter-    Amount    Unrealized 
        Issuer    Rate  party  Expiration  (000)    Depreciation 
        Nordstrom, Inc.  5.20%  Deutsche  June         
              Bank AG  2014  $ 2,000    $ (337,904) 
See Notes to Financial Statements.                         
                                                         ANNUAL REPORT            OCTOBER 31, 2009        15 


Schedule of Investments (concluded)    BlackRock Credit Allocation Income Trust II, Inc. (PSY) 
Fair Value Measurements — Various inputs are used in determining the fair value of  The following tables summarize the inputs used as of October 31, 2009 in 
  investments, which are as follows:  determining the fair valuation of the Fund’s investments:   
  Level 1 — price quotations in active markets/exchanges for identical assets          Investments in 
     and liabilities  Valuation Inputs         Securities 
  Level 2 — other observable inputs (including, but not limited to: quoted prices for                 Assets 
     similar assets or liabilities in markets that are active, quoted prices for identical  Level 1         
     or similar assets or liabilities in markets that are not active, inputs other than   Long-Term Investments:       
     quoted prices that are observable for the assets or liabilities (such as interest     Preferred Stocks      $ 84,696,966 
     rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and     Trust Preferreds      51,762,809 
     default rates) or other market-corroborated inputs)  Short-Term Securities      41,019,397 
  Level 3 — unobservable inputs based on the best information available in the  Total Level 1      177,479,172 
     circumstances, to the extent observable inputs are not available (including the  Level 2         
     Fund’s own assumptions used in determining the fair value of investments)   Long-Term Investments:       
  The inputs or methodology used for valuing securities are not necessarily an indica-     Capital Trusts      199,462,797 
  tion of the risk associated with investing in those securities. For information about     Corporate Bonds      10,347,396 
  the Fund’s policy regarding valuation of investments and other significant accounting     Preferred Stocks      36,044,445 
  policies, please refer to Note 1 of the Notes to Financial Statements.     Trust Preferreds      477,570 
    Total Level 2      246,332,208 
    Level 3         
     Long-Term Investments:       
       Capital Trusts      2,271,150 
       Corporate Bonds      266,121 
       Preferred Stocks      13,800,000 
    Total Level 3      16,337,271 
    Total        $ 440,148,651 
          Other Financial 
    Valuation Inputs    Instruments1 
          Assets  Liabilities 
    Level 1      $ 34,845   
    Level 2        $ (337,904) 
    Level 3         
    Total      $ 34,845  $ (337,904) 
    1 Other financial instruments are financial futures contracts and swaps. Financial 
    futures contracts and swaps are valued at the unrealized appreciation/ 
         depreciation on the instrument.     
  The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:       
        Investments in Securities   
      Capital  Corporate  Preferred   
      Trusts  Bonds  Stocks  Total 
  Balance, as of October 31, 2008           
  Accrued discounts/premiums           
  Realized gain (loss)           
  Change in unrealized appreciation/depreciation           
  Net purchases (sales)           
  Net transfers in/out of Level 3  $ 2,271,150  $ 266,121  $ 13,800,000  $ 16,337,271 
  Balance, as of October 31, 2009  $ 2,271,150  $ 266,121  $ 13,800,000  $ 16,337,271 
See Notes to Financial Statements.           
16  ANNUAL REPORT    OCTOBER 31, 2009     


Schedule of Investments October 31, 2009  BlackRock Credit Allocation Income Trust III (BPP) 
        (Percentages shown are based on Net Assets) 
    Par        Par   
Corporate Bonds    (000)  Value  Capital Trusts    (000)  Value 
Commercial Banks — 0.5%        Insurance — 12.2%       
RESPARCS Funding LP I, 8.00% (a)(b)(c)  $ 4,000  $ 1,000,000  AXA SA, 6.38% (a)(d)(e)  $ 7,150  $ 6,059,625 
Containers & Packaging — 0.1%        The Allstate Corp., 6.50%, 5/15/57 (e)    6,350  5,429,250 
Impress Holdings BV, 3.41%, 9/15/13 (d)(e)    240  228,300  Chubb Corp., 6.38%, 3/29/67 (e)(h)    900  816,750 
        Genworth Financial, Inc., 6.15%, 11/15/66 (e)    1,475  988,250 
Hotels, Restaurants & Leisure — 0.0%        Liberty Mutual Group, Inc., 10.75%, 6/15/88 (d)(e)    900  945,000 
Greektown Holdings, LLC, 10.75%, 12/01/13 (b)(c)(d)  362  72,400  Lincoln National Corp., 7.00%, 5/17/66 (e)    900  738,000 
Insurance — 5.2%        MetLife, Inc., 6.40%, 12/15/66    900  779,625 
Kingsway America, Inc., 7.50%, 2/01/14    9,000  7,200,000  Nationwide Life Global Funding I, 6.75%, 5/15/67    900  682,141 
QBE Insurance Group Ltd., 9.75%, 3/14/14 (d)    2,975  3,398,488  Progressive Corp., 6.70%, 6/15/67 (e)    900  788,352 
        Reinsurance Group of America, 6.75%, 12/15/65 (e)  1,300  1,007,500 
      10,598,488  The Travelers Cos., Inc., 6.25%, 3/15/67 (e)(h)    900  810,000 
Machinery — 0.2%        White Mountains Re Group Ltd., 7.51% (a)(d)(e)    2,600  2,147,808 
AGY Holding Corp., 11.00%, 11/15/14    460  374,900  ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (d)(e)    190  153,613 
        ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (d)(e)    2,209  1,789,290 
Media — 1.7%               
        Zenith National Insurance Capital Trust I,       
CMP Susquehanna Corp., 4.75%, 5/15/14 (d)    9  180         
        8.55%, 8/01/28 (d)    1,800  1,719,000 
Comcast Holdings Corp., 2.00%, 11/15/29 (f)    110  3,089,285         
Local Insight Regatta Hldgs, Inc., 11.00%, 12/01/17  700  343,000        24,854,204 
      3,432,465  Multi-Utilities — 0.4%       
        Puget Sound Energy, Inc., Series A, 6.97%, 6/01/67 (e)  925  809,301 
Oil, Gas & Consumable Fuels — 0.0%               
EXCO Resources, Inc., 7.25%, 1/15/11    75  74,625  Oil, Gas & Consumable Fuels — 0.4%       
        TransCanada PipeLines Ltd., 6.35%, 5/15/67 (e)    900  837,716 
Paper & Forest Products — 0.5%               
International Paper Co., 8.70%, 6/15/38    900  1,037,019  Total Capital Trusts — 31.9%      65,062,367 
Professional Services — 0.1%               
FTI Consulting, Inc., 7.75%, 10/01/16    100  100,500         
Specialty Retail — 0.0%        Preferred Stocks    Shares   
Lazy Days’ R.V. Center, Inc., 11.75%, 5/15/12 (b)(c)  1,182  11,820         
        Capital Markets — 0.0%       
Total Corporate Bonds — 8.3%      16,930,517  Lehman Brothers Holdings Inc., Series D, 5.67% (b)(c)  31,100  9,641 
        Commercial Banks — 8.6%       
        Banesto Holdings, Ltd. Series A, 10.50% (d)    30,000  669,375 
Preferred Securities        Barclays Bank Plc, 8.13%    100,000  2,355,000 
        First Republic Preferred Capital Corp., 7.25%    117,045  2,130,219 
Capital Trusts        HSBC USA, Inc., Series H, 6.50%    330,000  6,699,000 
        Royal Bank of Scotland Group Plc, Series M, 6.40%    10,000  103,400 
Building Products — 0.7%        Santander Finance Preferred SA Unipersonal 6.80%    38,500  1,053,360 
C8 Capital SPV Ltd., 6.64% (a)(d)(e)    1,945  1,371,458  Union Planter Preferred Funding Corp., 7.75% (d)    60  4,550,625 
Capital Markets — 3.9%              17,560,979 
State Street Capital Trust III, 8.25% (a)(e)    1,385  1,396,952         
        Diversified Financial Services — 2.3%       
State Street Capital Trust IV, 1.30%, 6/01/67 (e)    9,675  6,491,006  ING Groep NV, 7.20%    70  1,225,885 
      7,887,958  JPMorgan Chase & Co., Series E, 6.15%    75,000  3,531,750 
Commercial Banks — 9.4%              4,757,635 
Bank of Ireland Capital Funding II, LP, 5.57% (a)(d)(e)  854  375,760  Electric Utilities — 0.7%       
Bank of Ireland Capital Funding III, LP, 6.11% (a)(d)(e)  1,471  647,240  Alabama Power Co., 6.50%    50,000  1,500,000 
Barclays Bank Plc, 5.93% (a)(d)(e)    890  694,200         
CBA Capital Trust I, 5.81% (a)(d)    5,000  4,550,000  Insurance — 15.9%       
FCB/NC Capital Trust I, 8.05%, 3/01/28    1,100  936,369  Arch Capital Group Ltd., Series A, 8.00%    117,414  2,841,419 
        Aspen Insurance Holdings Ltd., 7.40% (e)    115,000  2,334,500 
Lloyds TSB Bank Plc, 6.90% (a)    4,399  3,343,240         
        Endurance Specialty Holdings Ltd., Series A, 7.75%    172,400  3,775,560 
NBP Capital Trust III, 7.38% (a)    2,000  1,485,000         
        MetLife, Inc., Series B, 6.50%    314,500  6,834,085 
National City Preferred Capital Trust I, 12.00% (a)(e)    600  686,718  PartnerRe Ltd., Series C, 6.75%    209,400  4,634,022 
SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(d)(e)    1,725  1,870,245  Prudential Plc, 6.50%    62,000  1,295,800 
Santander Perpetual SA Unipersonal, 6.67%(a)(d)(e)  625  570,308  Prudential Plc, 6.50% (a)    6,000  4,875,000 
SunTrust Preferred Capital I, 5.85% (a)(e)    303  197,708  RenaissanceRe Holding Ltd., Series D, 6.60%    210,000  4,328,100 
Wells Fargo Capital XIII Series GMTN, 7.70% (a)(e)    1,700  1,581,000  Zurich RegCaPS Funding Trust, 6.58% (d)(e)    2,000  1,571,250 
Westpac Capital Trust IV, 5.26% (a)(d)(e)    3,000  2,367,210         
              32,489,736 
      19,304,998         
        Media — 0.0%       
Diversified Financial Services — 4.5%        CMP Susquemanna Radio Holdings Corp.,       
JPMorgan Chase Capital XXI, Series U,        0.00% (b)(d)(e)    2,052   
1.23%, 2/02/37 (e)(g)    7,125  4,862,898         
        Real Estate Investment Trusts (REITs) — 2.3%       
JPMorgan Chase Capital XXIII, 1.44%, 5/15/77 (e)    6,190  4,359,834  BRE Properties, Inc., Series D, 6.75%    20,000  410,400 
      9,222,732  Public Storage:       
Electric Utilities — 0.4%        Series F, 6.45%    20,000  425,000 
PPL Capital Funding, 6.70%, 3/30/67 (e)    900  774,000  Series M, 6.63%    35,000  750,750 
        SunTrust Real Estate Investment Trust, 9.00% (d)    30  3,027,189 
              4,613,339 
See Notes to Financial Statements.        Total Preferred Stocks — 29.8%      60,931,330 
ANNUAL REPORT                                                         OCTOBER 31, 2009    17 


Schedule of Investments (continued)        BlackRock Credit Allocation Income Trust III (BPP) 
                (Percentages shown are based on Net Assets) 
    Shares                       
Trust Preferreds    (000)  Value  Short-Term Securities          Shares    Value 
Capital Markets — 1.2%        BlackRock Liquidity Funds, TempFund,           
Structured Asset Trust Unit Repackagings:       Institutional Class, 0.18% (j)(k)    51,450,797  $ 51,450,797 
 Credit Suisse First Boston (USA), Inc., Debenture      Total Short-Term Securities             
 Backed, Series 2003-13, 6.25%, 7/15/32  11  $ 250,671  (Cost — $51,450,797) — 25.2%            51,450,797 
 Goldman Sachs Group, Inc., Debenture Backed,                         
 Series 2003-06, 6.00%, 2/15/33  103  2,179,215  Total Investments (Cost — $256,459,826*) — 109.6%        223,807,066 
        Other Assets Less Liabilities — 24.9%          50,753,074 
      2,429,886  Preferred Shares, at Redemption Value — (34.5)%        (70,426,884) 
Commercial Banks — 2.0%        Net Assets Applicable to Common Shares — 100.0%      $ 204,133,256 
Mizuho Capital Investment 1 Ltd., 6.69% (a)(d)(e)  5,000  4,170,930                     
Diversified Financial Services — 0.1%      * The cost and unrealized appreciation (depreciation) of investments as of October 31, 
PPLUS Trust Certificates, Series VAL-1 Class A,        2009, as computed for federal income tax purposes, were as follows:   
 7.25%, 4/15/32    11  263,407    Aggregate cost            $ 257,997,371 
Food Products — 1.2%          Gross unrealized appreciation        $ 3,697,471 
Corporate-Backed Trust Certificates, Kraft Foods, Inc.,        Gross unrealized depreciation          ( 37,887,776) 
 Debenture Backed, Series 2003-11,        Net unrealized depreciation        $ ( 34,190,305) 
 5.88%, 11/01/31    100  2,417,000                     
        (a) Security is perpetual in nature and has no stated maturity date.     
Insurance — 1.1%                           
Everest Re Capital Trust, 6.20%, 3/29/34  30  597,330  (b) Non-income producing security.           
Financial Security Assurance Holdings Ltd.,       (c) Issuer filed for bankruptcy and/or is in default of interest payments.   
 5.60%, 7/15/03    15  193,235  (d) Security exempt from registration under Rule 144A of the Securities Act of 1933. 
The Phoenix Cos., Inc., 7.45%, 1/15/32  79  1,423,286    These securities may be resold in transactions exempt from registration to qualified 
      2,213,851    institutional investors.             
Media — 6.0%         (e) Variable rate security. Rate shown is as of report date.       
Comcast Corp.:         (f) Convertible security.             
7.00%, 9/15/55    50  1,210,942   (g) All or a portion of security held as collateral in connection with open financial 
6.63%, 5/15/56    470  10,786,500    futures contracts.               
Corporate-Backed Trust Certificates, News      (h) All or a portion of security held as collateral in connection with open reverse repur- 
 America Debenture Backed, Series 2002-9,        chase agreements.               
 8.13%, 12/01/45    7  169,606                     
         (i) Warrants entitle the Fund to purchase a predetermined number of shares of com- 
      12,167,048    mon stock and are non-income producing. The purchase price and number of 
Oil, Gas & Consumable Fuels — 1.8%        shares are subject to adjustment under certain conditions until the expiration date. 
Nexen, Inc., 7.35%, 11/01/43  155  3,623,900  (j) Investments in companies considered to be an affiliate of the Fund, for purposes of 
Wireless Telecommunication Services — 0.7%        Section 2(a)(3) of the Investment Company Act of 1940, were as follows: 
Structured Repackaged Asset-Backed Trust Securities,                    Net     
 Sprint Capital Corp., Debenture Backed, Series        Affiliate           Activity    Income 
 2004-2, 6.50%, 11/15/28    103  1,526,233                     
          BlackRock Liquidity Funds, TempFund,           
Total Trust Preferreds — 14.1%    28,812,555    Institutional Class    $51,450,797    $127,321 
Total Preferred Securities — 75.8%    154,805,952   (k) Represents the current yield as of report date.         
           For Fund compliance purposes, the Fund’s industry classifications refer to any one 
          or more of the industry sub-classifications used by one or more widely recognized 
          market indexes or ratings group indexes, and/or as defined by Fund management. 
Warrants (i)    Shares      This definition may not apply for purposes of this report, which may combine indus- 
Media — 0.0%          try sub-classifications for reporting ease.           
CMP Susquemanna Radio Holdings Corp.         Reverse repurchase agreements outstanding as of October 31, 2009 were as follows: 
 (expires 3/26/19) (d)    2,345          Interest  Trade  Maturity   Net Closing    Face 
Total Warrants — 0.0%          Counterparty  Rate  Date  Date    Amount    Amount 
          Barclays Bank Plc  0.75%  10/16/09  11/02/09 $13,239,375    $13,234,688 
           Financial futures contracts purchased as of October 31, 2009 were as follows: 
Investment Companies                Expiration  Notional    Unrealized 
          Contracts    Issue  Date   Value    Appreciation 
Ultra Short Real Estate Proshares  60,000  619,800                     
Total Investment Companies — 0.3%    619,800    14  30-Year U.S.             
            Treasury Bond December 2009 $ 1,662,675    $ 19,513 
Total Long Term Investments                           
(Cost — $205,009,029) — 84.4%    172,356,269     Credit default swaps on single-name issue — buy protection outstanding as of 
          October 31, 2009 were as follows:           
              Pay        Notional     
              Fixed  Counter-      Amount    Unrealized 
          Issuer    Rate  party  Expiration  (000)    Depreciation 
          Nordstrom, Inc.  5.20%  Deutsche  June         
                Bank AG  2014    $1,000    $ (168,952) 
See Notes to Financial Statements.                         
18  ANNUAL REPORT             OCTOBER 31, 2009         


Schedule of Investments (concluded)  BlackRock Credit Allocation Income Trust III (BPP) 
Fair Value Measurements — Various inputs are used in determining the fair value of  The following tables summarize the inputs used as of October 31, 2009 in deter- 
       investments, which are as follows:  mining the fair valuation of the Fund’s investments:       
       Level 1 — price quotations in active markets/exchanges for identical assets          Investments in 
           and liabilities  Valuation Inputs           Securities 
       Level 2 — other observable inputs (including, but not limited to: quoted prices            Assets 
           for similar assets or liabilities in markets that are active, quoted prices for iden-  Level 1           
           tical or similar assets or liabilities in markets that are not active, inputs other   Long-Term Investments:           
           than quoted prices that are observable for the assets or liabilities (such as     Preferred Stocks        $ 46,237,891 
           interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit     Trust Preferreds          24,448,090 
           risks and default rates) or other market-corroborated inputs)     Investment Companies          619,800 
       Level 3 — unobservable inputs based on the best information available in the   Short-Term Securities          51,450,797 
           circumstances, to the extent observable inputs are not available (including the  Total Level 1        122,756,578 
           Fund’s own assumptions used in determining the fair value of investments)  Level 2           
       The inputs or methodology used for valuing securities are not necessarily an   Long-Term Investments:           
       indication of the risk associated with investing in those securities. For information     Corporate Bonds          16,918,517 
       about the Fund’s policy regarding valuation of investments and other significant     Capital Trusts          65,062,367 
       accounting policies, please refer to Note 1 of the Notes to Financial Statements.     Preferred Stocks          11,666,250 
     Trust Preferreds          4,364,165 
  Total Level 2          98,011,299 
  Level 3           
   Long-Term Investments:           
     Corporate Bonds          12,000 
     Preferred Stocks          3,027,189 
  Total Level 3          3,039,189 
  Total        $ 223,807,066 
        Other Financial 
  Valuation Inputs      Instruments1 
        Assets    Liabilities 
  Level 1    $ 19,513     
  Level 2        $ (168,952) 
  Level 3           
  Total    $ 19,513  $ (168,952) 
   1 Other financial instruments are financial futures contracts and swaps. 
       Financial futures contracts and swaps are valued at the unrealized   
       appreciation/depreciation on the instrument.       
       The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:           
      Investments in Securities   
    Corporate  Preferred     
    Bonds    Stocks    Total 
       Balance, as of October 31, 2008             
       Accrued discounts/premiums             
       Realized gain (loss)             
       Change in unrealized appreciation/depreciation             
       Net purchases (sales)             
       Net transfers in/out of Level 3  $ 12,000  $ 3,027,189  $ 3,039,189 
       Balance, as of October 31, 2009  $ 12,000  $ 3,027,189  $ 3,039,189 
See Notes to Financial Statements.             
ANNUAL REPORT  OCTOBER 31, 2009      19 


Schedule of Investments October 31, 2009  BlackRock Credit Allocation Income Trust IV (BTZ) 
        (Percentages shown are based on Net Assets) 
Common Stocks    Shares           Value  Common Stocks  Shares             Value 
Aerospace & Defense — 0.1%      Diversified Financial Services — 0.3%     
Honeywell International, Inc.    1,800  $ 64,602  Bank of America Corp.  36,800  $ 536,544 
Lockheed Martin Corp.    3,800  261,402  JPMorgan Chase & Co.  21,100  881,347 
Northrop Grumman Corp.    5,200  260,676  NYSE Euronext  9,100  235,235 
United Technologies Corp.    1,800  110,610      1,653,126 
      697,290  Diversified Telecommunication Services — 0.3%     
Air Freight & Logistics — 0.1%      AT&T Inc.  38,887  998,229 
United Parcel Service, Inc. Class B  8,800  472,384  CenturyTel, Inc.  4,339  140,844 
Auto Components — 0.0%        Verizon Communications, Inc.  20,900  618,431 
Johnson Controls, Inc.    3,700  88,504      1,757,504 
Beverages — 0.2%        Electric Utilities — 0.1%     
The Coca-Cola Co.    14,300  762,333  American Electric Power Co., Inc.  2,200  66,484 
PepsiCo, Inc.    5,800  351,190  Duke Energy Corp.  20,200  319,564 
      1,113,523  FirstEnergy Corp.  1,300  56,264 
        Progress Energy, Inc.  5,400  202,662 
Biotechnology — 0.2%        The Southern Co.  8,700  271,353 
Amgen, Inc. (a)    6,900  370,737       
Biogen Idec, Inc. (a)    2,500  105,325      916,327 
Celgene Corp. (a)    3,500  178,675  Electrical Equipment — 0.1%     
Genzyme Corp. (a)    1,700  86,020  Emerson Electric Co.  10,900  411,475 
Gilead Sciences, Inc. (a)    7,100  302,105  Rockwell Automation, Inc.  5,400  221,130 
      1,042,862      632,605 
Capital Markets — 0.1%        Electronic Equipment, Instruments     
Federated Investors, Inc. Class B  6,700  175,875  & Components — 0.0%     
The Goldman Sachs Group, Inc.  1,360  231,431  Corning, Inc.  8,600  125,646 
Morgan Stanley    3,000  96,360  Tyco Electronics Ltd.  5,200  110,500 
      503,666      236,146 
Chemicals — 0.2%        Energy Equipment & Services — 0.1%     
Air Products & Chemicals, Inc.    900  69,417  National Oilwell Varco, Inc. (a)  5,600  229,544 
E.I. du Pont de Nemours & Co.  14,800  470,936  Schlumberger Ltd.  5,500  342,100 
Monsanto Co.    2,900  194,822  Smith International, Inc.  5,418  150,241 
PPG Industries, Inc.    3,900  220,077      721,885 
      955,252  Food & Staples Retailing — 0.2%     
Commercial Banks — 0.8%        CVS Caremark Corp.  3,400  120,020 
Citizens Banking Corp. (a)    6,406,596  3,856,771  SUPERVALU, Inc.  8,300  131,721 
M&T Bank Corp.    4,200  263,970  SYSCO Corp.  9,600  253,920 
Regions Financial Corp.    38,400  185,856  Wal-Mart Stores, Inc.  15,200  755,136 
Wells Fargo & Co.    33,300  916,416  Walgreen Co.  6,400  242,112 
      5,223,013      1,502,909 
Commercial Services & Supplies — 0.1%      Food Products — 0.1%     
Avery Dennison Corp.    7,900  281,635  Kraft Foods, Inc.  12,135  333,955 
Pitney Bowes, Inc.    10,800  264,600  Sara Lee Corp.  20,200  228,058 
Waste Management, Inc.    7,700  230,076      562,013 
      776,311  Health Care Equipment & Supplies — 0.1%     
Communications Equipment — 0.2%      Baxter International, Inc.  1,900  102,714 
Cisco Systems, Inc. (a)    23,400  534,690  Becton Dickinson & Co.  3,400  232,424 
Motorola, Inc.    34,800  298,236  Boston Scientific Corp. (a)  5,900  47,908 
QUALCOMM, Inc.    8,900  368,549  Covidien Plc  5,200  219,024 
      1,201,475  Medtronic, Inc.  2,000  71,400 
Computers & Peripherals — 0.4%          673,470 
Apple, Inc. (a)    6,000  1,131,000  Health Care Providers & Services — 0.1%     
Dell, Inc. (a)    14,900  215,901  Aetna, Inc.  2,400  62,472 
EMC Corp. (a)    13,900  228,933  Express Scripts, Inc. (a)  3,400  271,728 
Hewlett-Packard Co.    8,800  417,648  Medco Health Solutions, Inc. (a)  4,300  241,316 
International Business Machines Corp.  5,800  699,538  UnitedHealth Group, Inc.  2,400  62,280 
      2,693,020  WellPoint, Inc. (a)  4,500  210,420 
Distributors — 0.0%            848,216 
Genuine Parts Co.    7,300  255,427  Hotels, Restaurants & Leisure — 0.1%     
        McDonald’s Corp.  8,700  509,907 
        Starwood Hotels & Resorts Worldwide, Inc.  12,300  357,438 
            867,345 
See Notes to Financial Statements.           
20  ANNUAL REPORT                                               OCTOBER 31, 2009     


Schedule of Investments (continued)    BlackRock Credit Allocation Income Trust IV (BTZ) 
        (Percentages shown are based on Net Assets) 
Common Stocks  Shares     Value  Common Stocks  Shares             Value 
Household Durables — 0.2%        Multiline Retail — 0.1%     
Black & Decker Corp.  5,700  $ 269,154  Macy's, Inc.  18,400  $ 323,288 
Fortune Brands, Inc.  6,400    249,280  Oil, Gas & Consumable Fuels — 0.9%     
KB Home  15,100    214,118  Anadarko Petroleum Corp.  5,000  304,650 
Whirlpool Corp.  5,800    415,222  Apache Corp.  1,800  169,416 
      1,147,774  Chevron Corp.  13,400  1,025,636 
Household Products — 0.2%        ConocoPhillips  13,000  652,340 
Clorox Co.  4,200    248,766  Exxon Mobil Corp.  27,800  1,992,426 
The Procter & Gamble Co.  17,400    1,009,200  Hess Corp.  3,700  202,538 
        Massey Energy Co.  5,400  157,086 
      1,257,966  Occidental Petroleum Corp.  1,700  128,996 
IT Services — 0.1%        Peabody Energy Corp.  5,500  217,745 
Automatic Data Processing, Inc.  6,700    266,660  Southwestern Energy Co. (a)  5,500  239,690 
Cognizant Technology Solutions Corp. (a)  3,400    131,410  Spectra Energy Corp.  14,700  281,064 
MasterCard, Inc. Class A  409    89,579  XTO Energy, Inc.  6,900  286,764 
Paychex, Inc.  9,700    275,577      5,658,351 
      763,226  Paper & Forest Products — 0.1%     
Industrial Conglomerates — 0.2%        MeadWestvaco Corp.  15,300  349,299 
3M Co.  6,900    507,633  Weyerhaeuser Co.  5,600  203,504 
General Electric Co.  43,400    618,884      552,803 
Textron, Inc.  23,400    416,052       
        Pharmaceuticals — 0.6%     
      1,542,569  Abbott Laboratories  10,400  525,928 
Insurance — 0.3%        Bristol-Myers Squibb Co.  17,800  388,040 
Aflac, Inc.  10,600    439,794  Eli Lilly & Co.  9,900  336,699 
The Allstate Corp.  8,700    257,259  Johnson & Johnson  17,900  1,056,995 
Cincinnati Financial Corp.  8,500    215,560  Merck & Co., Inc.  16,000  494,880 
Lincoln National Corp.  13,000    309,790  Pfizer, Inc. (b)  31,504  536,513 
MetLife, Inc.  10,600    360,718  Schering-Plough Corp.  13,000  366,600 
Principal Financial Group, Inc.  9,200    230,368      3,705,655 
      1,813,489  Real Estate Investment Trusts (REITs) — 0.1%     
Internet & Catalog Retail — 0.0%        AvalonBay Communities, Inc.  4,200  288,876 
Amazon.com, Inc. (a)  810    96,236  Boston Properties, Inc.  4,300  261,311 
Internet Software & Services — 0.2%        Public Storage  1,200  88,320 
eBay, Inc. (a)  14,300    318,461  Vornado Realty Trust  4,978  296,490 
Google, Inc. Class A (a)  1,160    621,899      934,997 
Yahoo! Inc. (a)  9,600    152,640  Road & Rail — 0.0%     
      1,093,000  Norfolk Southern Corp.  5,900  275,058 
Leisure Equipment & Products — 0.0%        Semiconductors & Semiconductor Equipment — 0.2%     
Mattel, Inc.  11,600    219,588  Applied Materials, Inc.  5,200  63,440 
Life Sciences Tools & Services — 0.0%        Intel Corp.  40,700  777,777 
Thermo Fisher Scientific, Inc. (a)  2,600    117,000  Linear Technology Corp.  7,900  204,452 
        Microchip Technology, Inc.  8,900  213,244 
Machinery — 0.1%        National Semiconductor Corp.  9,500  122,930 
Caterpillar, Inc.  8,500    468,010  Texas Instruments, Inc.  9,300  218,085 
Cummins, Inc.  4,200    180,852       
Deere & Co.  2,800    127,540      1,599,928 
      776,402  Software — 0.3%     
        Autodesk, Inc. (a)  7,700  191,961 
Media — 0.0%        Microsoft Corp.  46,100  1,278,353 
Comcast Corp. Class A  6,900    100,050  Oracle Corp. (b)  21,000  443,100 
The DIRECTV Group, Inc. (a)  6,400    168,320       
            1,913,414 
      268,370       
        Specialty Retail — 0.2%     
Metals & Mining — 0.1%        Home Depot, Inc.  18,100  454,129 
Alcoa, Inc. (b)  24,500    304,290  Limited Brands, Inc.  16,100  283,360 
Nucor Corp.  5,400    215,190  Staples, Inc.  12,300  266,910 
      519,480      1,004,399 
Multi-Utilities — 0.2%        Textiles, Apparel & Luxury Goods — 0.0%     
Consolidated Edison, Inc.  5,400    219,672  VF Corp.  2,900  206,016 
Dominion Resources, Inc.  2,200    74,998       
Integrys Energy Group, Inc.  5,500    190,300  Thrifts & Mortgage Finance — 0.0%     
Public Service Enterprise Group, Inc.  7,900    235,420  Hudson City Bancorp, Inc.  19,000  249,660 
TECO Energy, Inc.  8,900    127,626       
Xcel Energy, Inc.  10,400    196,144       
      1,044,160       
See Notes to Financial Statements.             
                                                         ANNUAL REPORT                                                           OCTOBER 31, 2009    21 


Schedule of Investments (continued)  BlackRock Credit Allocation Income Trust IV (BTZ) 
        (Percentages shown are based on Net Assets) 
            Par   
Common Stocks    Shares  Value  Capital Trusts    (000)  Value 
Tobacco — 0.2%        Commercial Banks (concluded)       
Altria Group, Inc. (b)    20,500  $ 371,255  Commonwealth Bank of Australia, 6.02% (d)(e)(g)  $ 20,000  $ 16,400,000 
Philip Morris International, Inc.  16,600  786,176  HSBC Capital Funding LP/Jersey Channel Islands,       
      1,157,431  10.18% (d)(e)(g)    7,000  8,330,000 
        Lloyds Banking Group Plc, 6.66% (d)(e)(g)    10,000  6,500,000 
Total Common Stocks — 8.2%    53,634,533  SMFG Preferred Capital USD 1 Ltd., 6.08% (d)(e)(g)    10,000  8,637,700 
        SMFG Preferred Capital USD 3 Ltd., 9.50% (d)(e)(g)    3,850  4,174,170 
        Santander Perpetual SA Unipersonal, 6.67%, (d)(e)(g)  1,300  1,186,241 
    Par    Shinsei Finance II (Cayman) Ltd., 7.16% (d)(e)(g)    1,005  588,240 
Corporate Bonds    (000)    Standard Chartered Bank, 7.014% (d)(e)(g)    5,000  4,550,000 
Capital Markets — 0.0%        Wells Fargo & Co. Series K, 7.98% (d)(e)    12,985  12,157,206 
Lehman Brothers Holdings, Inc. (a)(c):      Wells Fargo Capital XIII Series GMTN, 7.70% (d)(e)    3,900  3,627,000 
     3.95%, 11/10/09    $ 105  16,537        96,798,182 
     4.38%, 11/30/10    325  51,187  Diversified Financial Services — 3.6%       
      67,724  JPMorgan Chase Capital XXI Series U,       
Computers & Peripherals — 0.8%      1.23%, 2/02/37 (d)    12,875  8,787,342 
International Business Machines Corp.,      JPMorgan Chase Capital XXIII, 1.44%, 5/15/77 (d)(f)  20,695  14,576,213 
8.00%, 10/15/38    4,000  5,461,952        23,363,555 
Diversified Financial Services — 1.2%      Electric Utilities — 0.5%       
ING Groep NV, 5.78% (d)(e)(f)  10,000  7,300,000  PPL Capital Funding, 6.70%, 3/30/67 (d)    3,900  3,354,000 
Stan IV Ltd., 2.74%, 7/20/11 (d)  283  240,550  Insurance — 9.7%       
      7,540,550  AXA SA, 6.46% (d)(e)(g)    12,000  9,885,000 
Insurance — 0.9%        The Allstate Corp., 6.50%, 5/15/57 (d)    8,675  7,417,125 
QBE Insurance Group Ltd., 9.75%, 3/14/14 (g)  4,973  5,680,902  Chubb Corp., 6.38%, 3/29/67 (d)(f)    4,000  3,630,000 
        Liberty Mutual Group, Inc., 10.75%, 6/15/88 (d)(g)    4,000  4,200,000 
Metals & Mining — 0.0%        Lincoln National Corp., 7.00%, 5/17/66 (d)    4,255  3,489,100 
Aleris International, Inc., 10.00%, 12/15/16 (a)(c)  5,000  43,750  MetLife, Inc., 6.40%, 12/15/66    4,550  3,941,437 
Multi-Utilities — 1.5%        Nationwide Life Global Funding I, 6.75%, 5/15/67    4,000  3,031,740 
Dominion Resources, Inc., 8.88%, 1/15/19  8,000  10,098,472  Progressive Corp., 6.70%, 6/15/67 (d)(f)    4,000  3,503,788 
Paper & Forest Products — 0.6%      Reinsurance Group of America, 6.75%, 12/15/65 (d)(f)  15,000  11,625,000 
International Paper Co., 8.70%, 6/15/38 (b)  3,100  3,571,953  Swiss Re Capital I LP, 6.854% (d)(e)(g)    3,000  2,310,000 
        The Travelers Cos., Inc., 6.25%, 3/15/67 (d)(f)    4,000  3,600,000 
Total Corporate Bonds — 5.0%    32,465,303  White Mountains Re Group Ltd., 7.506% (d)(e)(g)    4,400  3,634,752 
        ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (d)(g)    599  484,286 
        ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (d)(g)    3,331  2,698,110 
              63,450,338 
Investment Companies    Shares           
        Multi-Utilities — 0.2%       
UltraShort Real Estate ProShares  150,000  1,549,500  Puget Sound Energy, Inc. Series A, 6.97%, 6/01/67 (d)  1,575  1,377,999 
Total Investment Companies — 0.2%    1,549,500  Oil, Gas & Consumable Fuels — 1.2%       
        Enterprise Products Operating LLC, 8.38%, 8/01/66 (d)  4,500  4,410,000 
        TransCanada PipeLines Ltd., 6.35%, 5/15/67 (d)(f)    4,000  3,723,180 
Preferred Securities              8,133,180 
    Par    Real Estate Investment Trusts (REITs) — 1.6%       
Capital Trusts    (000)    Sovereign Real Estate Investment Corp., 12.00% (g)    10,000  10,500,000 
Building Products — 0.9%        Total Capital Trusts — 35.5%      232,306,446 
C8 Capital SPV Ltd., 6.64% (d)(e)(g)  $ 3,160  2,228,179         
C10 Capital SPV Ltd., 6.72% (d)(e)(g)  5,000  3,542,750         
      5,770,929         
Capital Markets — 3.0%        Preferred Stocks    Shares   
Credit Suisse Guernsey Ltd., 5.86% (d)(e)  1,050  866,250  Commercial Banks — 4.8%       
State Street Capital Trust III, 8.25% (d)(e)  1,740  1,755,016  HSBC USA, Inc. Series H, 6.50%    977,766  19,848,650 
State Street Capital Trust IV, 1.30%, 6/01/67 (d)  25,245  16,936,997  Royal Bank of Scotland Group Plc Series M, 6.40%    15,000  155,100 
      19,558,263  Santander Finance Preferred SA Unipersonal, 10.50%  419,881  11,487,944 
Commercial Banks — 14.8%              31,491,694 
BB&T Capital Trust IV, 6.82%, 6/12/77 (d)(f)  15,300  13,559,625  Diversified Financial Services — 2.0%       
Bank of Ireland Capital Funding II, LP, 5.57% (d)(e)(g)  1,422  625,680  Cobank ACB, 7.00% (g)    150,000  5,235,945 
Bank of Ireland Capital Funding III, LP, 6.11% (d)(e)(g)  9,153  4,027,320  ING Groep NV:       
Barclays Bank Plc, (d)(e)(g):             6.13%    200,000  3,130,000 
     5.93%    4,000  3,120,000       7.05%    5,800  99,470 
     6.86%    11,500  9,315,000       7.20%    213,000  3,730,192 
             7.38%    40,000  703,193 
              12,898,800 
See Notes to Financial Statements.             
22  ANNUAL REPORT                                               OCTOBER 31, 2009       


Schedule of Investments (continued)      BlackRock Credit Allocation Income Trust IV (BTZ) 
            (Percentages shown are based on Net Assets) 
Preferred Stocks  Shares  Value  Short-Term Securities      Shares  Value 
Diversified Telecommunication Services — 0.1%      BlackRock Liquidity Funds, TempFund,       
AT&T, Inc., 6.38%  30,000  $ 778,580   Institutional Class, 0.18% (h)(i)    267,832,781 $  267,832,781 
Electric Utilities — 4.4%      Total Short-Term Securities         
Alabama Power Co., 6.50%  100,000  3,000,000  (Cost — $267,832,781) — 40.9%      267,832,781 
Entergy Louisiana LLC, 6.95%  40,000  3,743,482  Total Investments Before Outstanding Options Written     
Interstate Power & Light Co. Series B, 8.38%  785,000  21,783,750  (Cost — $905,234,626*) — 125.7%      823,053,616 
    28,527,232               
Insurance — 9.1%                   
Aegon NV, 6.50%  400,000  6,496,000               
Arch Capital Group Ltd.:      Options Written        Contracts   
     Series A, 8.00%  100,000  2,420,000  Exchange-Traded Call Options Written       
     Series B, 7.88%  160,000  3,788,800  S&P 500 Listed Option:         
Aspen Insurance Holdings Ltd., 7.40% (d)  655,000  13,296,500    expiring 11/21/09 at USD 1,090    234  (113,490) 
Axis Capital Holdings Ltd. Series B, 7.50% (d)  180,000  13,477,500    expiring 11/21/09 at USD 1,095    21  (7,770) 
Endurance Specialty Holdings Ltd. Series A, 7.75%  369,000  8,081,100    expiring 11/21/09 at USD 1,110    145  (44,950) 
PartnerRe Ltd. Series C, 6.75%  265,600  5,877,728               
RenaissanceRe Holding Ltd. Series D, 6.60%  285,000  5,873,850  Total Options Written           
      (Premiums Received — $828,039) — (0.0)%    (166,210) 
    59,311,478               
      Total Investments — 125.7%        822,887,406 
Real Estate Investment Trusts (REITs) — 0.4%      Other Assets Less Liabilities — 9.6%      63,155,825 
BRE Properties, Inc. Series D, 6.75%  30,000  615,600  Preferred Shares, at Redemption Value — (35.3)%    (231,044,104) 
iStar Financial, Inc. Series I, 7.50%  55,000  385,000               
Public Storage:      Net Assets Applicable to Common Shares — 100.0%  $ 654,999,127 
     Series F, 6.45%  30,000  637,500  * The cost and unrealized appreciation (depreciation) of investments as of October 31, 
     Series M, 6.63%  55,000  1,179,750    2009, as computed for federal income tax purposes, were as follows: 
    2,817,850    Aggregate cost        $ 918,380,664 
Wireless Telecommunication Services — 1.5%        Gross unrealized appreciation    $ 26,032,998 
Centaur Funding Corp., 9.08% (g)  10,000  10,034,375    Gross unrealized depreciation      (121,360,046) 
Total Preferred Stocks — 22.3%    145,860,009    Net unrealized depreciation    $ (95,327,048) 
      (a) Non-income producing security.       
  Shares    (b) All or a portion of the security has been pledged as collateral in connection with 
Trust Preferreds  (000)      open financial futures contracts.       
Capital Markets — 0.0%       (c) Issuer filed for bankruptcy and/or is in default of interest payments.   
Credit Suisse Guernsey Ltd., 7.90% (e)  10  244,950  (d) Variable rate security. Rate shown is as of report date.   
Commercial Banks — 3.4%       (e) Security is perpetual in nature and has no stated maturity date.   
Kazkommerts Finance 2 BV, 9.20% (d)(e)  500  315,000               
Mizuho Capital Investment 1 Ltd., 6.686% (d)(e)(g)  21,000  17,517,906   (f) All or a portion of the security has been pledged as collateral for open reverse 
National City Preferred Trust I, 12% (d)(e)  3,713  4,249,640    repurchase agreements.         
    22,082,546   (g) Security exempt from registration under Rule 144A of the Securities Act of 1933. 
        These securities may be resold in transactions exempt from registration to qualified 
Electric Utilities — 1.1%        institutional investors.         
PPL Energy Supply LLC, 7.00%, 7/15/46  288  7,366,797               
      (h) Investments in companies considered to be an affiliate of the Fund, for purposes of 
Insurance — 1.9%        Section 2(a)(3) of the Investment Company Act of 1940, were as follows: 
AON Corp., 8.21%, 1/01/27  4,000  3,960,000               
Ace Capital Trust II, 9.70%, 4/01/30 (f)  4,000  4,420,912                   Net   
W.R. Berkley Capital Trust II, 6.75%, 7/26/45  171  3,807,443    Affiliate        Activity  Income 
    12,188,355    BlackRock Liquidity Funds, TempFund,       
Media — 6.8%        Institutional Class      $267,832,781  $ 479,886 
Comcast Corp., 6.63%, 5/15/56  1,950  44,717,395               
       (i) Represents the current yield as of report date.     
Oil, Gas & Consumable Fuels — 0.4%         For Fund compliance purposes, the Fund’s industry classifications refer to any one 
Nexen, Inc., 7.35%, 11/01/43  120  2,805,001               
        or more of the industry sub-classifications used by one or more widely recognized 
Total Trust Preferreds — 13.6%    89,405,044    market indexes or ratings group indexes, and/or as defined by Fund management. 
Total Preferred Securities — 71.4%    467,571,499    This definition may not apply for purposes of this report, which may combine 
Total Long-Term Investments        industry sub-classifications for reporting ease.     
(Cost — $637,401,845) — 84.8%    555,220,835     Reverse repurchase agreements outstanding as of October 31, 2009 were as follows: 
          Interest  Trade  Maturity  Net Closing  Face 
        Counterparty  Rate  Date  Date  Amount  Amount 
        Barclays           
        Bank Plc  0.75%  10/16/09  11/16/09 $61,616,136  $61,576,368 
See Notes to Financial Statements.                   
                                                         ANNUAL REPORT            OCTOBER 31, 2009  23 


Schedule of Investments (concluded)  BlackRock Credit Allocation Income Trust IV (BTZ) 
  Financial futures contracts purchased as of October 31, 2009 were as follows:      Other Financial 
                  Valuation Inputs    Instruments1 
                 Unrealized         
      Expiration  Notional  Appreciation      Assets  Liabilities 
  Contracts  Issue  Date      Value  (Depreciation)  Level 1  $ 982,873  $ (311,644) 
       422  10-Year US              Level 2      (675,809) 
        Treasury Bond                 December 2009  $49,119,100  $ 934,090  Level 3       
  35  30-Year US              Total  $ 982,873  $ (987,453) 
    Treasury Bond  December 2009  $ 4,156,686    48,783         
       161  S&P EMINI  December 2009  $ 8,461,085    (145,434)  1 Other financial instruments are financial futures contracts, swaps and options. 
  Total            $ 837,439  Financial futures contracts and swaps are valued at the unrealized appreciation/ 
                       depreciation on the instrument and options are shown at market value. 
  Credit default swaps on single-name issue — buy protection oustanding as of         
  October 31, 2009 were as follows:            The following is a reconciliation of investments for unobservable inputs (Level 3) 
                  used in determining fair value:       
    Pay        Notional             
    Fixed  Counter-      Amount     Unrealized        Investments in 
  Issuer  Rate  party  Expiration (000)  Depreciation        Securities 
  Nordstrom, Inc. 5.20%  Deutsche  June                Corporate Bonds 
      Bank AG  2014  $4,000     $ (675,809)         
                  Balance, as of October 31, 2008      $ 268,850 
  Fair Value Measurements — Various inputs are used in determining the fair value of  Accrued discounts/premiums       
  investments, which are as follows:            Realized gain (loss)       
  Level 1 — price quotations in active markets/exchanges for identical assets  Change in unrealized appreciation/depreciation2    (28,300) 
     and liabiltiies              Net purchases (sales)       
                  Net transfers in/out of Level 3       
  Level 2 — other observable inputs (including, but not limited to: quoted prices for         
  similar assets or liabilities in markets that are active, quoted prices for identical  Balance, as of October 31, 2009      $ 240,550 
     or similar assets or liabilities in markets that are not active, inputs other than         
                   2 Included in the related net change in unrealized appreciation/depreciation in 
     quoted prices that are observable for the assets or liabilities (such as interest         
  rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and       the Statements of Operations.       
     default rates) or other market-corroborated inputs)               
  Level 3 — unobservable inputs based on the best information available in the         
     circumstances, to the extent observable inputs are not available (including the         
     Fund’s own assumptions used in determining the fair value of investments)         
  The inputs or methodology used for valuing securities are not necessarily an indica-         
  tion of the risk associated with investing in those securities. For information about         
  the Fund’s policy regarding valuation of investments and other significant accounting         
  policies, please refer to Note 1 of the Notes to Financial Statements.           
  The following tables summarize the inputs used as of October 31, 2009 in         
  determining the fair valuation of the Fund’s investments:             
              Investments in         
  Valuation Inputs             Securities         
                Assets         
  Level 1                       
   Long-Term Investments:                     
     Common Stocks          $53,634,533         
     Investment Companies            1,549,500         
     Preferred Stocks          113,368,707         
     Trust Preferreds          58,941,586         
   Short-Term Securities          267,832,781         
  Total Level 1            495,327,107         
  Level 2                       
  Corporate Bonds          32,224,753         
   Capital Trusts          232,306,446         
   Preferred Stocks          32,491,302         
   Trust Preferreds          30,463,458         
  Total Level 2            327,485,959         
  Level 3                       
   Corporate Bonds            240,550         
  Total          $ 823,053,616         
See Notes to Financial Statements.                   
24      ANNUAL REPORT                                           OCTOBER 31, 2009       


Schedule of Investments October 31, 2009  BlackRock Enhanced Capital and Income Fund, Inc. (CII) 
      (Percentages shown are based on Net Assets) 
Common Stocks  Shares  Value  Common Stocks  Shares  Value 
Aerospace & Defense — 5.2%      Machinery — 1.5%     
Honeywell International, Inc.  337,600  $ 12,116,464  Deere & Co.  207,286  $ 9,441,877 
Northrop Grumman Corp.  192,800  9,665,064  Media — 5.3%     
Raytheon Co.  226,000  10,233,280  Time Warner, Inc.  538,272  16,212,753 
    32,014,808  Viacom, Inc. Class B (a)  418,424  11,544,318 
Capital Markets — 5.9%      Walt Disney Co.  189,947  5,198,849 
The Bank of New York Mellon Corp.  483,198  12,882,059      32,955,920 
Invesco Ltd.  584,300  12,357,945  Metals & Mining — 1.4%     
Morgan Stanley  353,613  11,358,050  Nucor Corp.  218,800  8,719,180 
    36,598,054  Multi-Utilities — 1.4%     
Chemicals — 1.8%      Dominion Resources, Inc.  256,500  8,744,085 
E.I. du Pont de Nemours & Co.  353,100  11,235,642  Oil, Gas & Consumable Fuels — 8.1%     
Commercial Banks — 1.4%      Anadarko Petroleum Corp.  84,117  5,125,249 
Wells Fargo & Co.  316,600  8,712,832  Chevron Corp.  256,400  19,624,856 
Communications Equipment — 1.0%      Exxon Mobil Corp.  247,100  17,709,657 
Nokia Oyj — ADR  503,900  6,354,179  Peabody Energy Corp.  199,100  7,882,369 
Computers & Peripherals — 4.5%          50,342,131 
Hewlett-Packard Co.  286,092  13,577,926  Pharmaceuticals — 10.8%     
International Business Machines Corp.  117,353  14,153,945  Bristol-Myers Squibb Co.  859,200  18,730,560 
    27,731,871  Eli Lilly & Co.  263,500  8,961,635 
      Johnson & Johnson  143,454  8,470,959 
Diversified Financial Services — 3.4%      Pfizer, Inc.  681,599  11,607,622 
JPMorgan Chase & Co.  501,939  20,965,992  Schering-Plough Corp.  676,900  19,088,580 
Diversified Telecommunication Services — 6.3%          66,859,356 
AT&T Inc.  459,400  11,792,798       
Qwest Communications International Inc.  3,573,701  12,829,587  Semiconductors & Semiconductor     
Verizon Communications, Inc.  494,300  14,626,337  Equipment — 10.0%     
      Analog Devices, Inc.  500,100  12,817,563 
    39,248,722  Intel Corp.  501,078  9,575,601 
Electric Utilities — 2.5%      LSI Corp. (a)  3,895,920  19,947,110 
FPL Group, Inc.  152,044  7,465,360  Maxim Integrated Products, Inc.  655,500  10,927,185 
The Southern Co.  261,029  8,141,495  Micron Technology, Inc. (a)  1,233,100  8,372,749 
    15,606,855      61,640,208 
Electrical Equipment — 0.9%      Software — 1.0%     
Emerson Electric Co.  143,000  5,398,250  Microsoft Corp.  215,414  5,973,430 
Energy Equipment & Services — 2.1%      Specialty Retail — 1.0%     
Halliburton Co.  441,089  12,884,210  Home Depot, Inc.  242,200  6,076,798 
Food & Staples Retailing — 1.1%      Total Long-Term Investments     
Walgreen Co.  180,400  6,824,532  (Cost — $664,851,097) — 97.7%    604,104,432 
Food Products — 7.3%           
General Mills, Inc.  209,371  13,801,736       
Kraft Foods, Inc.  594,200  16,352,384       
Unilever NV — ADR  481,632  14,877,612  Short-Term Securities     
    45,031,732  Money Market Funds — 4.0%     
Health Care Equipment & Supplies — 1.3%      BlackRock Liquidity Funds, TempFund,     
Covidien Plc  193,800  8,162,856  Institutional Class, 0.18% (b)(c)  24,567,455  24,567,455 
Household Products — 3.4%        Par   
Clorox Co.  54,557  3,231,411    (000)   
Kimberly-Clark Corp.  287,700  17,595,732  Time Deposits — 0.0%     
    20,827,143  Brown Brothers Harriman & Co., 0.03%, 11/02/09  $ 217  217,283 
Industrial Conglomerates — 1.3%      Total Short-Term Securities     
Tyco International Ltd.  230,500  7,733,275  (Cost — $24,784,738) — 4.0%    24,784,738 
Insurance — 7.8%      Total Investments Before Outstanding Options Written     
ACE Ltd.  185,500  9,527,280  (Cost — $689,635,835*) — 101.7%    628,889,170 
MetLife, Inc.  257,825  8,773,785       
Prudential Financial, Inc.  118,300  5,350,709       
The Travelers Cos., Inc.  489,430  24,368,720       
    48,020,494       
See Notes to Financial Statements.           
                                                         ANNUAL REPORT                                                         OCTOBER 31, 2009    25 


Schedule of Investments (continued)    BlackRock Enhanced Capital and Income Fund, Inc. (CII) 
          (Percentages shown are based on Net Assets) 
Options Written  Contracts     Value  Options Written  Contracts           Value 
Exchange-Traded Call Options Written        Exchange-Traded Call Options Written (concluded)     
ACE Ltd.:        Raytheon Co.:     
  expiring 11/21/09 at USD 55  100  $ (2,000)       expiring 11/21/09 at USD 46  900  $ (72,000) 
  expiring 12/19/09 at USD 55  550    (39,875)       expiring 12/19/09 at USD 48  395  (25,675) 
AT&T Inc., expiring 1/16/10 at USD 27  250    (13,500)  Schering-Plough Corp.:     
Anadarko Petroleum Corp.:             expiring 12/19/09 at USD 29  2,300  (109,250) 
  expiring 11/21/09 at USD 60  425    (148,750)       expiring 12/19/09 at USD 30  1,425  (32,063) 
  expiring 12/19/09 at USD 70  40    (5,000)  Time Warner, Inc.:     
Analog Devices, Inc., expiring 12/19/09 at USD 30  100    (1,750)       expiring 12/19/09 at USD 32  2,700  (209,250) 
The Bank of New York Mellon Corp.:             expiring 1/16/10 at USD 33  250  (20,000) 
  expiring 12/19/09 at USD 30  1,500    (75,000)  The Travelers Cos., Inc.:     
  expiring 12/19/09 at USD 31  190    (5,700)       expiring 11/21/09 at USD 50  1,000  (137,500) 
Bristol-Myers Squibb Co.:             expiring 12/19/09 at USD 50  465  (95,325) 
  expiring 11/21/09 at USD 23  430    (5,375)       expiring 12/19/09 at USD 55  250  (11,250) 
  expiring 12/19/09 at USD 23  2,470    (75,335)  Tyco International Ltd., expiring 12/19/09 at USD 36  820  (45,100) 
Clorox Co., expiring 1/16/10 at USD 60  410    (79,950)  Unilever NV — ADR, expiring 12/19/09 at USD 30  1,700  (289,000) 
Covidien Plc, expiring 11/21/09 at USD 42.50  100    (12,750)  Verizon Communications, Inc.:     
Deere & Co., expiring 12/19/09 at USD 49  1,550    (251,875)       expiring 11/21/09 at USD 29  1,250  (126,250) 
Dominion Resources, Inc.,             expiring 12/19/09 at USD 30  1,250  (95,624) 
  expiring 11/21/09 at USD 35  630    (15,750)       expiring 12/19/09 at USD 31  250  (9,750) 
  expiring 1/16/10 at USD 35  400    (27,000)  Viacom, Inc. Class B:     
Eli Lilly & Co.:             expiring 11/21/09 at USD 30  1,060  (31,800) 
  expiring 11/21/09 at USD 35  130    (3,250)       expiring 12/19/09 at USD 30  1,035  (72,450) 
  expiring 12/19/09 at USD 35  800    (44,000)  Walgreen Co., expiring 12/19/09 at USD 41  630  (20,474) 
Emerson Electric Co.:        Walt Disney Co., expiring 12/19/09 at USD 31  400  (10,000) 
  expiring 11/21/09 at USD 41  210    (3,675)  Total Exchange-Traded Call Options Written    (4,359,940) 
  expiring 12/19/09 at USD 41  290    (13,050)  Over-the-Counter Call Options Written     
Exxon Mobil Corp., expiring 11/21/09 at USD 75  1,850    (70,300)  AT&T Inc.:     
FPL Group, Inc., expiring 11/21/09 at USD 55  470    (3,525)       expiring 12/15/09 at USD 26.60, Broker UBS AG  2,000  (73,008) 
General Mills, Inc.:             expiring 12/18/09 at USD 27, Broker Morgan     
  expiring 11/21/09 at USD 65  515    (90,125)       Stanley Capitial Services, Inc.  270  (6,589) 
  expiring 12/19/09 at USD 65  815    (207,825)  Analog Devices, Inc., expiring 11/30/09 at USD 28.39,     
Halliburton Co., expiring 11/21/09 at USD 32  2,400    (74,400)   Broker Citibank NA  1,650  (27,042) 
Hewlett-Packard Co.:        Bristol-Myers Squibb Co., expiring 11/13/09     
  expiring 12/19/09 at USD 48  790    (144,175)   at USD 23.20, Broker Credit Suisse International  1,825  (6,209) 
  expiring 12/19/09 at USD 50  285    (28,500)  Chevron Corp.:     
  expiring 1/16/10 at USD 50  600    (85,500)       expiring 11/30/09 at USD 79.18, Broker UBS AG  1,170  (134,217) 
Home Depot, Inc., expiring 12/19/09 at USD 28  1,815    (43,560)       expiring 12/23/09 at USD 79.45, Broker UBS AG  750  (125,320) 
Honeywell International, Inc.,        Covidien Plc, expiring 11/13/09 at USD 42.39,     
  expiring 12/19/09 at USD 39  1,000    (45,000)   Broker Credit Suisse International  580  (41,089) 
  expiring 12/19/09 at USD 40  160    (4,800)  Dominion Resources, Inc., expiring 12/11/09     
Intel Corp., expiring 12/19/09 at USD 21  2,750    (63,250)   at USD 35.48, Broker UBS AG  900  (22,723) 
International Business Machines Corp.,        E.I. du Pont de Nemours & Co., expiring 12/23/09     
 expiring 12/19/09 at USD 125  645    (153,188)   at USD 34.87, Broker UBS AG  2,655  (148,622) 
Invesco Ltd., expiring 12/19/09 at USD 25  280    (7,700)  FPL Group, Inc., expiring 11/17/09 at USD 55.96,     
JPMorgan Chase & Co., expiring 12/19/09 at USD 48  2,000    (125,000)   Broker Credit Suisse International  450  (438) 
Kimberly-Clark Corp.:        General Mills, Inc., expiring 11/20/09 at USD 65.50,     
  expiring 11/21/09 at USD 60  710    (136,675)   Broker UBS AG  240  (30,762) 
  expiring 11/24/09 at USD 59  730    (182,418)  Honeywell International, Inc., expiring 11/20/09     
  expiring 1/16/10 at USD 65  100    (6,000)   at USD 38.50, Broker Credit Suisse International  640  (10,045) 
Kraft Foods, Inc., expiring 12/19/09 at USD 28  1,485    (111,375)  Invesco Ltd., expiring 1/06/10 at USD 22.68,     
Maxim Integrated Products, Inc., expiring 11/21/09         Broker Morgan Stanley Capital Services, Inc.  1,470  (132,869) 
 at USD 20  300    (3,000)  Johnson & Johnson:     
MetLife, Inc., expiring 11/21/09 at USD 39  900    (24,750)       expiring 12/15/09 at USD 60.96, Broker Morgan     
Microsoft Corp., expiring 12/19/09 at USD 27  535    (78,378)       Stanley Capital Services, Inc.  245  (11,574) 
Micron Technology, Inc., expiring 12/19/09 at USD 9  3,700    (27,750)       expiring 12/23/09 at USD 61.98, Broker Credit     
Morgan Stanley, expiring 12/19/09 at USD 35  1,240    (127,100)       Suisse International  585  (25,053) 
Nokia Oyj — ADR:             expiring 1/04/10 at USD 62, Broker Bank of America  245  (15,384) 
  expiring 11/21/09 at USD 14  750    (5,625)  Kraft Foods, Inc., expiring 12/07/09 at USD 26.85,     
  expiring 12/19/09 at USD 14  1,000    (27,500)   Broker Goldman Sachs Bank USA  1,770  (193,797) 
Nucor Corp., expiring 11/21/09 at USD 48  650    (6,500)       
Peabody Energy Corp., expiring 11/21/09 at USD 42  700    (70,000)       
Pfizer, Inc., expiring 12/19/09 at USD 18  5,110    (153,300)       
Prudential Financial, Inc.:             
  expiring 11/21/09 at USD 55  355    (8,875)       
  expiring 12/19/09 at USD 55  100    (7,500)       
See Notes to Financial Statements.             
26                                                   ANNUAL REPORT                                                 OCTOBER 31, 2009     


Schedule of Investments (concluded)      BlackRock Enhanced Capital and Income Fund, Inc. (CII) 
          (Percentages shown are based on Net Assets) 
Options Written  Contracts  Value           
Over-the-Counter Call Options Written (concluded)        Fair Value Measurements — Various inputs are used in determining the fair value of 
LSI Corp.:        investments, which are as follows:     
     expiring 11/13/09 at USD 5.63, Broker Morgan        Level 1 — price quotations in active markets/exchanges for identical assets 
     Stanley Capital Services, Inc.  2,000  $ (7,826)           
          and liabilities     
     expiring 12/23/09 at USD 5.93, Broker Morgan               
     Stanley Capital Services, Inc.  9,600  (94,118)    Level 2 — other observable inputs (including, but not limited to: quoted prices 
     expiring 1/08/10 at USD 5.56, Broker Morgan          for similar assets or liabilities in markets that are active, quoted prices for identi- 
     Stanley Capital Services, Inc.  2,000  (49,728)      cal or similar assets or liabilities in markets that are not active, inputs other than 
Maxim Integrated Products, Inc.:          quoted prices that are observable for the assets or liabilities (such as interest 
     expiring 12/23/09 at USD 19.06, Broker Morgan          rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks 
     Stanley Capital Services, Inc.  1,292  (16,127)      and default rates) or other market-corroborated inputs)     
     expiring 1/08/10 at USD 19.25, Broker Morgan        Level 3 — unobservable inputs based on the best information available in the 
     Stanley Capital Services, Inc.  2,000  (41,582)      circumstances, to the extent observable inputs are not available (including the 
Microsoft Corp., expiring 11/06/09 at USD 25,          Fund’s own assumptions used in determining the fair value of investments) 
 Broker Deutshe Bank AG  1,080  (294,840)           
        The inputs or methodology used for valuing securities are not necessarily an indica- 
Northrop Grumman Corp., expiring 12/23/09               
        tion of the risk associated with investing in those securities. For information about 
 at USD 51.94, Broker Citibank NA  1,445  (166,533)           
        the Fund’s policy regarding valuation of investments and other significant accounting 
Qwest Communications International Inc.,               
        policies, please refer to Note 1 of the Notes to Financial Statements.   
 expiring 1/06/10 at USD 3.66, Broker Credit               
 Suisse International  12,500  (217,713)    The following tables summarize the inputs used as of October 31, 2009 in deter- 
The Southern Co., expiring 12/23/09 at USD 32.76,        mining the fair valuation of the Fund’s investments:     
 Broker Citibank NA  1,950  (56,560)           
Walt Disney Co., expiring 11/09/09 at USD 28.50,            Investments in 
 Broker Morgan Stanley Capital Services, Inc.  640  (14,400)    Valuation Inputs    Securities 
Wells Fargo & Co.,              Assets 
     expiring 11/20/09 at USD 30.75, Broker Deutsche      Level 1     
     Bank AG  1,390  (31,570)     Long-Term Investments1  $604,104,432 
     expiring 12/23/09 at USD 31.50, Broker Credit         Short-Term Securities    24,567,455 
     Suisse International  350  (21,468)           
        Total Level 1    628,671,887 
Total Over-the-Counter Call Options Written    (2,017,206)           
        Level 2 — Short-Term Securities    217,283 
Total Options Written               
(Premiums Received — $9,193,459) — (1.0)%    (6,377,146)    Level 3     
Total Investments, Net of Outstanding Options Written — 100.7%  622,512,024    Total  $628,889,170 
Liabilities in Excess of Other Assets — (0.7)%    (4,050,310)     1   See above Schedule of Investments for values in each industry.   
Net Assets — 100.0%    $618,461,714           
            Other Financial 
* The cost and unrealized appreciation (depreciation) of investments as of October 31,    Valuation Inputs  Instruments2 
       2009, as computed for federal income tax purposes, were as follows:          Liabilities 
       Aggregate cost    $ 715,152,338    Level 1  $ (4,359,940) 
       Gross unrealized appreciation    $ 6,130,287    Level 2    (2,017,206) 
       Gross unrealized depreciation    (92,393,455)    Level 3     
       Net unrealized depreciation    $ (86,263,168)    Total  $ (6,377,146) 
(a) Non-income producing security.         2   Other financial instruments are options, which are shown at market value. 
(b) Investments in companies considered to be an affiliate of the Fund, for purposes of           
       Section 2(a)(3) of the Investment Company Act of 1940, were as follows:           
  Net             
       Affiliate  Activity  Income           
       BlackRock Liquidity Funds, TempFund,               
Institutional Class  $24,567,455  $ 25,743           
       BlackRock Liquidity Series, LLC               
Cash Sweep Series  $(2,450,990)  $117,920           
 (c) Represents the current yield as of report date.               
 For Fund compliance purposes, the Fund’s industry classifications refer to any one           
       or more of the industry sub-classifications used by one or more widely recognized           
       market indexes or ratings group indexes, and/or as defined by Fund management.           
       This definition may not apply for purposes of this report, which may combine industry           
       sub-classifications for reporting ease.               
See Notes to Financial Statements.               
ANNUAL REPORT          OCTOBER 31, 2009    27 


Schedule of Investments October 31, 2009    BlackRock Floating Rate Income Trust (BGT) 
            (Percentages shown are based on Net Assets) 
                Par   
Common Stocks      Shares    Value  Corporate Bonds    (000)           Value 
Chemicals — 0.0%            Energy Equipment & Services — 0.0%       
British Vita Holding Co. (a)(b)      166  $ 977  Compagnie Generale de Geophysique-Veritas:       
Commercial Services & Supplies — 0.0%               7.50%, 5/15/15  USD  70  $ 69,475 
Sirva (b)      554    5,540       7.75%, 5/15/17    50  49,500 
Construction & Engineering — 0.0%                118,975 
USI United Subcontractors (b)      7,639    99,305  Food & Staples Retailing — 0.1%       
Metals & Mining — 0.0%            Duane Reade, Inc., 11.75%, 8/01/15 (a)    240  255,600 
Euramax International (b)      1,135    12,203  Food Products — 0.2%       
Paper & Forest Products — 0.1%          Smithfield Foods, Inc., 10.00%, 7/15/14 (a)    700  735,000 
Ainsworth Lumber Co. Ltd. (b)      55,855    90,850  Health Care Equipment & Supplies — 0.2%       
Ainsworth Lumber Co. Ltd. (a)(b)    62,685    102,419  DJO Finance LLC, 10.88%, 11/15/14    635  661,987 
          193,269  Health Care Providers & Services — 0.4%       
Total Common Stocks — 0.1%        311,294  DaVita, Inc., 6.63%, 3/15/13    1,070  1,053,950 
            Tenet Healthcare Corp. (a):       
                 9.00%, 5/01/15    95  100,462 
                 10.00%, 5/01/18    35  38,587 
      Par             
Corporate Bonds      (000)            1,192,999 
Air Freight & Logistics — 0.0%          Hotels, Restaurants & Leisure — 0.1%       
Park-Ohio Industries, Inc., 8.38%, 11/15/14  USD  125    98,125  American Real Estate Partners LP, 7.13%, 2/15/13    140  137,550 
            Greektown Holdings, LLC, 10.75%, 12/01/13 (a)(b)(d)    122  24,400 
Auto Components — 0.0%                   
Delphi International Holdings Unsecured,                161,950 
12.00%, 10/06/14      39    37,992  Household Durables — 0.5%       
The Goodyear Tire & Rubber Co., 5.01%, 12/01/09 (c)    60    60,000  Beazer Homes USA, Inc., 12.00%, 10/15/17 (a)    1,500  1,575,000 
Lear Corp., 8.75%, 12/01/16 (b)(d)    30    20,400  Berkline/BenchCraft, LLC, 4.50%, 11/03/12 (b)(d)(e)    400   
          118,392        1,575,000 
Building Products — 0.0%            IT Services — 0.2%       
CPG International I, Inc., 10.50%, 7/01/13    90    76,500  SunGard Data Systems, Inc., 4.88%, 1/15/14    763  686,700 
Capital Markets — 0.6%            Independent Power Producers & Energy Traders — 1.6%     
E*Trade Financial Corp. (a):            AES Ironwood LLC, 8.86%, 11/30/25    82  78,071 
12.50%, 11/30/17 (e)      138    153,180  Calpine Construction Finance Co. LP,       
3.34%, 8/31/19 (f)(g)      439    629,416  8.00%, 6/01/16 (a)    2,580  2,618,700 
Marsico Parent Co., LLC, 10.63%, 1/15/16 (a)    1,501    915,610  NRG Energy, Inc., 7.25%, 2/01/14    2,200  2,183,500 
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (a)(e)    645    145,226        4,880,271 
Marsico Parent Superholdco, LLC,                 
14.50%, 1/15/18 (a)(e)      445    100,213  Machinery — 0.1%       
            Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (a)    210  161,700 
        1,943,645  Synventive Molding Solutions Sub-Series A,       
Chemicals — 0.3%            14.00%, 1/14/11 (e)    986  246,504 
American Pacific Corp., 9.00%, 2/01/15    125    116,250        408,204 
Ames True Temper, Inc., 4.28%, 1/15/12 (c)    1,100    968,000         
            Media — 1.0%       
        1,084,250  Affinion Group, Inc., 10.13%, 10/15/13    50  51,250 
Commercial Banks — 4.1%            CSC Holdings, Inc., 8.50%, 4/15/14 (a)    550  580,937 
SNS Bank NV Series EMTN, 2.88%, 1/30/12  EUR  8,500  12,711,922  Charter Communications Holdings II, LLC (b)(d):       
Commercial Services & Supplies — 0.3%               10.25%, 9/15/10    260  314,600 
DI Finance Series B, 9.50%, 2/15/13  USD  307    313,140       Series B, 10.25%, 9/15/10    45  54,225 
The Geo Group, Inc., 7.75%, 10/15/17 (a)    675    685,125  Charter Communications Operating, LLC,       
             10.00%, 4/30/12 (a)(b)(d)    210  213,150 
          998,265  EchoStar DBS Corp.:       
Containers & Packaging — 0.1%               7.00%, 10/01/13    158  158,000 
Berry Plastics Corp., 4.17%, 9/15/14 (c)    300    236,250       7.13%, 2/01/16    230  230,000 
Impress Holdings BV, 3.41%, 9/15/13 (a)(c)    150    142,687  Local Insight Regatta Holdings, Inc., 11.00%, 12/01/17    770  377,300 
          378,937  Nielsen Finance LLC, 10.00%, 8/01/14    400  412,000 
            Rainbow National Services LLC, 8.75%, 9/01/12 (a)    750  761,250 
Diversified Financial Services — 0.1%                 
FCE Bank Plc, 7.13%, 1/16/12  EUR  200    282,556        3,152,712 
Diversified Telecommunication Services — 1.8%          Metals & Mining — 0.2%       
PAETEC Holding Corp., 8.88%, 6/30/17 (a)  USD  700    693,000  Foundation PA Coal Co., 7.25%, 8/01/14    505  506,894 
Qwest Corp., 8.38%, 5/01/16 (a)    1,840  1,899,800  Oil, Gas & Consumable Fuels — 5.4%       
Telefonica Emisiones SAU, 5.43%, 2/03/14  EUR  2,000  3,164,192  Gazprom OAO, 9.63%, 3/01/13    11,530  12,770,628 
        5,756,992  Repsol International Finance BV, 6.50%, 3/27/14  EUR  1,500  2,444,048 
            SandRidge Energy, Inc., 3.91%, 4/01/14 (c)  USD  1,400  1,239,308 
            Whiting Petroleum Corp., 7.25%, 5/01/13    300  300,375 
                  16,754,359 
See Notes to Financial Statements.                 
28  ANNUAL REPORT                                                   OCTOBER 31, 2009       


Schedule of Investments (continued)  BlackRock Floating Rate Income Trust (BGT) 
        (Percentages shown are based on Net Assets) 
    Par        Par   
Corporate Bonds    (000)  Value  Floating Rate Loan Interests (c)    (000)  Value 
Paper & Forest Products — 2.4%        Beverages (concluded)       
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (a)(e)  USD  482 $  275,858  Le-Nature’s, Inc., Tranche B Term Loan,       
NewPage Corp.:         9.50%, 3/01/11 (b)(d)  USD  1,000 $  390,000 
     6.53%, 5/01/12 (c)    1,500  960,000  Orangina SA:       
     11.38%, 12/31/14 (a)    5,470  5,456,325       Term Loan B2, 2.61%, 12/31/13  EUR  559  801,916 
Verso Paper Holdings LLC Series B, 4.03%, 8/01/14 (c)    1,215  795,825       Term Loan C2, 3.61%, 12/31/14    534  765,047 
      7,488,008        4,443,353 
Pharmaceuticals — 0.5%        Building Products — 1.9%       
Angiotech Pharmaceuticals, Inc., 4.11%, 12/01/13 (c)    1,750  1,452,500  Building Materials Corp. of America, Term Loan       
Real Estate Investment Trusts (REITs) — 1.4%         Advance, 3.00%, 2/22/14  USD  2,679  2,460,208 
Rouse Co. LP, 5.38%, 11/26/13 (b)(d)    4,835  4,254,800  Custom Building Products, Inc., Loan (Second Lien),       
         10.75%, 4/20/12    1,500  1,421,250 
Specialty Retail — 0.1%        Goodman Global Holdings Term Loan B,       
General Nutrition Centers, Inc., 5.18%, 3/15/14 (c)(e)    500  446,250   6.25%, 2/13/14    900  900,675 
Lazy Days’ R.V. Center, Inc., 11.75%, 5/15/12 (b)(d)    375  3,750  Momentive Performance Materials (Blitz 06-103       
      450,000   GMBH), Tranche B-1 Term Loan, 2.50%, 12/04/13    1,218  1,007,952 
Textiles, Apparel & Luxury Goods — 0.6%        United Subcontractors, Inc., First Lien Term Loan,       
Levi Strauss & Co., 8.63%, 4/01/13  EUR  1,300  1,894,012   1.79%, 6/30/15    179  152,293 
Tobacco — 1.4%              5,942,378 
Imperial Tobacco Finance Plc, 4.38%, 11/22/13    1,500  2,238,020  Capital Markets — 0.4%       
Reynolds American, Inc., 7.63%, 6/01/16  USD  2,000  2,154,312  Marsico Parent Co., LLC, Term Loan,       
      4,392,332   5.00% – 5.06%, 12/15/14    458  309,239 
        Nuveen Investments, Inc., First Lien Term Loan,       
Wireless Telecommunication Services — 1.3%         3.28%, 11/13/14    1,174  1,009,334 
Cricket Communications, Inc., 7.75%, 5/15/16 (a)    3,000  2,992,500         
iPCS, Inc., 2.41%, 5/01/13 (c)    1,155  1,010,625        1,318,573 
      4,003,125  Chemicals — 8.0%       
        Ashland Inc., Term B Borrowing, 7.65%, 5/13/14    1,071  1,085,440 
Total Corporate Bonds — 25.0%      78,475,012  Brenntag AG, Second Lien Term Loan,       
         4.25%, 7/17/15    1,000  937,500 
        Brenntag Holding GmbH & Co. KG:       
             Acquisition Facility 1, 2.25% – 2.99%, 1/20/14    384  363,650 
Floating Rate Loan Interests (c)             Acquisition Facility 2, 3.21%, 1/20/14  EUR  443  616,722 
Aerospace & Defense — 1.1%             Facility B2, 2.25%, 1/20/14  USD  1,572  1,489,371 
Avio SpA, Dollar Mezzanine Term Loan,             Facility B6A and B6B, 3.02%, 1/20/14  EUR  489  689,643 
 4.24%, 12/13/16    1,062  806,784  Cognis GmbH:       
Hawker Beechcraft Acquisition Co. LLC:             Facility A, 2.77%, 11/17/13    803  1,068,996 
     Credit Linked Deposit, 0.18%, 3/26/14    163  127,717       Facility B (French), 2.77%, 11/16/13    197  261,795 
     Term Loan, 2.24% – 2.28%, 3/26/14    2,750  2,158,412  ElectricInvest Holding Co. Ltd. (Viridian Group Plc),       
IAP Worldwide Services, Inc., Term Loan (First-Lien),         Junior Term Facility:       
 9.25%, 12/30/12 (e)    232  193,722       4.93%, 12/20/12    1,787  2,025,325 
             5.01%, 12/21/12  GBP  1,800  2,274,779 
      3,286,635  Huish Detergents Inc.:       
Airlines — 0.3%             Loan (Second Lien), 4.50%, 10/26/14  USD  750  710,625 
US Airways Group, Inc., Loan, 2.78%, 3/21/14    1,460  965,425       Tranche B Term Loan, 2.00%, 4/26/14    1,725  1,650,055 
Auto Components — 2.7%        Ineos US Finance LLC, Term A4 Facility,       
Allison Transmission, Inc., Term Loan,         7.00%, 12/14/12    1,236  1,091,535 
 3.00% – 3.04%, 8/07/14    5,778  5,166,397  Matrix Acquisition Corp. (MacDermid, Inc.), Tranche C       
Dana Holding Corp., Term Advance, 7.25%, 1/31/15    2,874  2,532,390   Term Loan, 2.64%, 12/15/13  EUR  1,616  1,839,021 
Dayco Products LLC — (Mark IV Industries, Inc.):        Nalco Co., Term Loan, 6.50%, 5/13/16  USD  1,891  1,918,858 
     Replacement Term B Loan, 8.75%, 6/21/11 (b)(d)    853  382,583  PQ Corp. (fka Niagara Acquisition, Inc.):       
     US Lien Term Loan, 8.50%, 5/01/10    101  100,806       Loan (Second Lien), 6.75%, 7/30/15    2,250  1,839,375 
     US Term Loan, 8.50%, 6/01/11    20  10,081       Term Loan (First Lien), 3.50% – 3.54%, 7/30/14    2,716  2,411,475 
GPX International Tire Corp. (b)(d):        Rockwood Specialties Group, Inc., Tranche H Term Loan,       
     Amendment Fee, 12.00%, 4/11/12    12  3,454   6.00%, 5/15/14    1,229  1,241,848 
     Tranche B Term Loan, 10.25%, 3/30/12    640  192,052  Solutia Inc., Loan, 7.25%, 2/28/14    1,472  1,492,343 
      8,387,763        25,008,356 
Automobiles — 0.5%        Commercial Services & Supplies — 3.1%       
Ford Motor Co., Term Loan, 3.25% – 3.29%, 12/15/13    1,690  1,502,202  Aramark Corp.:       
             Facility Letter of Credit, 0.29%, 1/26/14    155  141,829 
Beverages — 1.4%             U.S. Term Loan, 2.12% – 2.16%, 1/26/14    2,359  2,161,562 
Culligan International Co., Loan (Second Lien),        Casella Waste Systems, Inc., Term B Loan,       
 5.19%, 4/24/13  EUR  1,000  533,473   7.00%, 4/08/14    1,097  1,102,736 
Inbev NV Bridge Loan, 1.43%, 7/15/11  USD  1,000  986,250         
Inbev NV/SA, Bridge Loan, 1.72%, 7/15/13    1,000  966,667         
See Notes to Financial Statements.               
                                                         ANNUAL REPORT                                                           OCTOBER 31, 2009      29 


Schedule of Investments (continued)    BlackRock Floating Rate Income Trust (BGT) 
          (Percentages shown are based on Net Assets) 
      Par        Par   
Floating Rate Loan Interests (c)    (000)  Value  Floating Rate Loan Interests (c)    (000)     Value 
Commercial Services & Supplies (concluded)        Diversified Telecommunication Services — 3.8%       
EnviroSolutions Real Property Holdings, Inc., Initial        BCM Ireland Holdings Ltd. (Eircom):       
   Term Loan, 11.00%, 7/07/12 (e)  USD  2,030 $  1,502,171       Facility B, 2.30%, 8/14/14  EUR  500 $  641,441 
John Maneely Co., Term Loan,             Facility C, 2.55%, 8/14/15    500  641,441 
   3.50% – 3.53%, 12/09/13    1,380  1,259,076  Cavtel Holdings, LLC, Term Loan, 10.50%, 12/31/12  USD  1,162  865,414 
SIRVA Worldwide, Inc., Loan (Second Lien),        Hawaiian Telcom Communications, Inc., Tranche C       
   12.00%, 5/12/15    133  13,339   Term Loan, 4.75%, 5/30/14    1,223  868,143 
Synagro Technologies, Inc., Term Loan (First Lien),        Integra Telecom Holdings, Inc., Term Loan (First Lien),       
   2.24%, 4/02/14    1,971  1,584,205   10.50%, 8/31/13    1,870  1,829,318 
West Corp. Incremental Term Loan B-3,        Nordic Telephone Co. Holdings APS:       
   7.25%, 11/08/13    1,995  1,998,661       Facility B2 Swiss, 1.93%, 11/29/13  EUR  885  1,238,990 
        9,763,579       Facility C2 Swiss, 2.56%, 11/29/14    1,058  1,480,351 
          PAETEC Holding Corp.:       
Computers & Peripherals — 0.3%             Incremental Term Loan, 2.74%, 2/28/13  USD  132  124,349 
Intergraph Corp.:             Replacement Term Loan, 2.74%, 2/28/13    310  292,941 
  Initial Term Loan (First Lien), 2.37%, 5/29/14    350  333,795  Wind Telecomunicazioni SpA:       
  Second-Lien Term Loan, 6.24% – 6.37%, 11/28/14    750  718,125       A1 Term Loan Facility, 2.90% – 2.93%, 9/22/12  EUR  848  1,180,221 
        1,051,920       B1 Term Loan Facility, 3.69%, 9/22/13    1,000  1,404,009 
Construction & Engineering — 0.7%             C1 Term Loan Facility, 4.68%, 9/22/14    1,000  1,404,009 
Airport Development and Investment Ltd. (BAA) Facility              11,970,627 
 (Second Lien), 4.56%, 4/07/11  GBP  566  843,498  Electric Utilities — 0.3%       
Brand Energy & Infrastructure Services, Inc. (FR Brand        Astoria Generating Co. Acquisitions, LLC, Term B Facility,       
 Acquisition Corp.):         2.04% – 2.05%, 2/23/13  USD  378  362,655 
  Loan (Second Lien), 6.31% – 6.44%, 2/07/15  USD  1,000  791,250  TPF Generation Holdings, LLC:       
  Synthetic Letter of Credit Term Loan (First Lien),             Synthetic Letter of Credit Deposit (First Lien),       
  0.31%, 2/07/14    500  449,375       0.18%, 12/15/13    151  143,016 
        2,084,123       Synthetic Revolving Deposit, 0.19%, 12/15/11    47  44,832 
Containers & Packaging — 1.9%             Term Loan (First Lien), 2.24%, 12/15/13    409  388,847 
Atlantis Plastic Films, Inc., Term Loan (Second Lien),              939,350 
 12.25%, 3/22/12 (b)(d)    500    Electrical Equipment — 0.4%       
Graham Packaging Co., L.P.:        Electrical Components International Holdings Co. (ECI),       
  B Term Loan, 2.50% – 2.56%, 10/07/11    232  225,705   Term Loan (Second Lien), 11.50%, 5/01/14    500  25,000 
  C Term Loan, 6.75%, 4/05/14    828  826,876  Generac Acquisition Corp., Term Loan (First Lien),       
OI European Group BV, Tranche D Term Loan,         2.78%, 11/10/13    1,464  1,315,114 
 1.93%, 6/14/13  EUR  1,915  2,672,599         
Smurfit Kappa Acquisitions (JSG):              1,340,114 
  C1 Term Loan Facility, 4.05% – 4.46%, 12/01/14    724  1,017,226  Electronic Equipment, Instruments       
  Term B1, 3.80% – 4.73%, 12/02/13    724  1,017,446  & Components — 1.2%       
Smurfit-Stone Container Canada, Inc.:        Flextronics International Ltd.:       
  Tranche C, 2.50%, 11/01/11  USD  26  25,153       A Closing Date Loan, 2.49% – 2.54%, 10/01/14    2,666  2,459,646 
  Tranche C-1 Term Loan, 2.50%, 11/01/11    8  7,605       Delay Draw Term Loan, 2.53%, 10/01/14    766  706,795 
Smurfit-Stone Container Enterprises, Inc.:        Matinvest 2 SAS (Deutsche Connector), Second Lien,       
  Deposit Funded Facility, 4.50%, 11/01/10    12  11,754   4.97%, 12/22/15    500  235,000 
  Tranche B, 2.50%, 11/01/11    14  13,376  Safenet, Inc., Loan (Second Lien), 6.25%, 4/12/15    500  426,250 
  U.S. Term Loan Debtor in Possession,        Tinnerman Palnut Engineered Products, LLC, Loan       
  10.00%, 1/28/10    145  145,108   (Second Lien), 13.00%, 11/01/11 (b)(d)    2,407  24,068 
Smurfit-Stone Container, Revolving Credit:              3,851,759 
  2.75% – 4.50%, 11/01/09    60  58,913         
  2.75% – 5.00%, 11/01/09    20  19,540  Energy Equipment & Services — 0.9%       
          Dresser, Inc., Term Loan (Second Lien), 6.00%, 5/04/15  1,500  1,348,125 
        6,041,301  MEG Energy Corp., Initial Term Loan, 2.29%, 4/03/13    483  454,756 
Distributors — 0.2%        Trinidad USA Partnership LLLP, Term Facility,       
Keystone Automotive Operations, Inc., Loan,         2.74%, 5/01/11    1,019  876,748 
   3.75% – 5.75%, 1/12/12    1,026  608,109        2,679,629 
Diversified Consumer Services — 2.5%        Food & Staples Retailing — 2.8%       
Coinmach Laundry Corp, Delay Draw Term Loan,        AB Acquisitions UK Topco 2 Ltd. (fka Alliance Boots),       
   3.25% – 3.43%, 11/14/14    497  424,528   Facility B1, 3.52%, 7/09/15  GBP  2,500  3,596,399 
Coinmach Service Corp., Term Loan B, 3.43%, 11/14/14  2,539  2,094,394  Birds Eye Iglo Group Ltd. (Liberator Midco Ltd.),       
Education Management Corp, Term Loan C,         Mezzanine Credit Facility, 8.51%, 11/03/16    411  626,759 
   2.06%, 6/01/13    1,197  1,118,950  DSW Holdings, Inc., Term Loan,       
Laureate Education New Incremental Term Loan,         4.29%, 3/02/12  USD  1,000  861,667 
7.00%, 12/31/14    4,250  4,234,063  McJunkin Corp., Term Loan, 3.49%, 1/31/14    497  481,060 
        7,871,935  Pierre Foods Term Loan B, 8.50%, 9/23/14    817  821,085 
Diversified Financial Services — 0.1%        Rite Aid Corp., Tranche 4 Term Loan, 9.50%, 6/10/15    1,000  1,030,417 
Professional Service Industries, Inc., Term Loan               
   (First Lien), 3.00%, 10/31/12    620  310,223         
See Notes to Financial Statements.               
30                                                   ANNUAL REPORT                                                 OCTOBER 31, 2009       


Schedule of Investments (continued)  BlackRock Floating Rate Income Trust (BGT) 
        (Percentages shown are based on Net Assets) 
    Par        Par   
Floating Rate Loan Interests (c)    (000)     Value  Floating Rate Loan Interests (c)    (000)  Value 
Food & Staples Retailing (concluded)        Hotels, Restaurants & Leisure (concluded)       
Roundy’s Supermarkets, Inc., Tranche B Term Loan,        Penn National Gaming, Inc., Term Loan B,       
 3.01% – 3.04%, 11/03/11  USD  501 $  492,229   1.99% – 2.21%, 10/03/12  USD  2,497 $  2,404,745 
WM. Bolthouse Farms, Inc., Term Loan (First Lien),        QCE, LLC (Quiznos), Term Loan (First Lien),       
 2.56%, 12/16/12    843  819,272   2.56%, 5/05/13    997  797,107 
      8,728,888        7,841,788 
Food Products — 1.6%        Household Durables — 1.7%       
Dole Food Co., Inc.:        American Residential Services LLC, Term Loan       
     Credit-Linked Deposit, 0.28%, 4/12/13    192  193,556   (Second Lien), 10.00%, 4/17/15    2,051  1,927,183 
     Tranche B Term Loan, 8.00%, 4/12/13    335  338,055  Berkline/Benchcraft, LLC., Term Loan,       
FSB Holdings, Inc. (Fresh Start Bakeries), Term Loan         6.58%, 11/03/11 (b)(d)    107  5,373 
 (Second Lien), 6.00%, 3/29/14    500  415,000  Jarden Corp., Term Loan B3, 2.78%, 1/24/12    952  930,272 
Solvest, Ltd. (Dole), Tranche C Term Loan,        Simmons Bedding Co., Tranche D Term Loan,       
 8.00%, 4/12/13    1,205  1,214,151   10.50%, 12/19/11    1,500  1,477,500 
Wm. Wrigley Jr. Co., Tranche B Term Loan,        Yankee Candle Co., Inc., Term Loan, 2.25%, 2/06/14    1,047  974,582 
 6.50%, 9/30/14    2,924  2,956,946        5,314,910 
      5,117,708  Household Products — 0.2%       
Health Care Equipment & Supplies — 1.8%        VI-JON, Inc. (VJCS Acquisition, Inc.), Tranche B       
Bausch & Lomb Incorporated:         Term Loan, 2.25%, 4/24/14    674  630,379 
     Delayed Draw Term Loan, 3.50% – 3.53%, 4/24/15    93  88,814  IT Services — 4.1%       
     Parent Term Loan, 3.53%, 4/24/15    384  365,729  Amadeus IT Group SA/Amadeus Verwaltungs GmbH:       
Biomet, Inc., Euro Term Loan,             Term B3 Facility, 2.44%, 6/30/13  EUR  615  833,122 
 3.39% – 3.71%, 3/25/15  EUR  2,521  3,523,547       Term B4 Facility, 2.44%, 6/30/13    489  663,217 
DJO Finance LLC (ReAble Therapeutics Fin LLC),             Term C3 Facility, 2.94%, 6/30/14    615  833,122 
 Term Loan, 3.24% – 3.28%, 5/20/14  USD  1,485  1,426,110       Term C4 Facility, 2.94%, 6/30/14    489  663,217 
Hologic, Inc., Tranche B Term Loan, 3.50%, 3/31/13    270  263,940  Audio Visual Services Group, Inc., Loan (Second Lien),       
      5,668,140   6.79%, 2/28/14  USD  1,059  105,867 
Health Care Providers & Services — 4.1%        Ceridian Corp, US Term Loan,       
CCS Medical, Inc. (Chronic Care):         3.24% – 3.28%, 11/09/14    1,977  1,753,567 
     Loan Debtor in Possession, 11.00%, 11/16/09    31  30,309  First Data Corp.:       
     Term Loan (First Lien), 4.35%, 9/30/12 (b)(d)    675  328,500       Initial Tranche B-1 Term Loan,       
CCS Medical Return of Capital, 0.00%, 9/30/11 (b)(d)    475  231,167       2.99% – 3.04%, 9/24/14    2,454  2,106,768 
CHS/Community Health Systems, Inc.:             Initial Tranche B-2 Term Loan,       
     Delayed Draw Term Loan, 2.49%, 7/25/14    229  213,335       3.03% – 3.04%, 9/24/14    1,590  1,361,812 
     Funded Term Loan, 2.49% – 2.62%, 7/25/14    4,491  4,181,777       Initial Tranche B-3 Term Loan,       
Fresenius SE:             3.03% – 3.04%, 9/24/14    975  834,104 
     Tranche B1 Term Loan, 6.75%, 9/26/14    968  973,779  RedPrairie Corp.:       
     Tranche B2 Term Loan, 6.75%, 9/26/14    521  524,586       Loan (Second Lien), 6.97%, 1/20/13    1,250  1,081,250 
HCA Inc., Tranche A-1 Term Loan, 1.78%, 11/17/12    3,084  2,869,645       Term Loan B, 3.44% – 5.25%, 7/20/12    861  826,320 
HealthSouth Corp., Tranche 1 Term Loan-Assignment        SunGard Data Systems Inc (Solar Capital Corp.),       
 2.54% – 2.55%, 3/10/13    798  757,573   Incremental Term Loan, 6.75%, 2/28/14    1,694  1,706,074 
HealthSouth Corp., Tranche 2 Term Loan-Assignment              12,768,440 
 4.04% – 4.05%, 3/15/14    657  632,965  Independent Power Producers & Energy Traders — 2.4%     
Surgical Care Affiliates, LLC, Term Loan,        Dynegy Holdings Inc.:       
 2.28%, 12/29/14    392  357,114       Term Letter of Credit Facility Term Loan,       
Vanguard Health Holding Co. II, LLC (Vanguard             4.00%, 4/02/13    1,110  1,063,811 
 Health System, Inc.), Replacement Term Loan,             Tranche B Term Loan, 4.00%, 4/02/13    90  85,856 
 2.49%, 9/23/11    1,637  1,594,878  Texas Competitive Electric Holdings Co., LLC (TXU):       
      12,695,628       Initial Tranche B-1 Term Loan,       
Hotels, Restaurants & Leisure — 2.5%             3.74% – 3.78%, 10/10/14    2,477  1,918,853 
BLB Worldwide Holdings, Inc. (Wembley, Inc.) (b)(d):             Initial Tranche B-2 Term Loan,       
     First Priority Term Loan, 4.75%, 7/18/11    2,418  1,426,744       3.74% – 3.78%, 10/10/14    3,261  2,520,589 
     Second Priority Term Loan, 7.06%, 7/18/12    1,500  67,500       Initial Tranche B-3 Term Loan,       
Golden Nugget, Inc.:             3.74% – 3.78%, 10/10/14    2,485  1,903,001 
     Additional Term Advance (First Lien),              7,492,110 
     2.25% – 2.29%, 6/30/14    271  185,651  Insurance — 0.5%       
     Second Lien Term Loan, 3.50%, 12/31/14    500  200,000  Alliant Holdings I, Inc. Term Loan, 3.28%, 8/21/14    980  908,950 
     Term Advance (First Lien), 2.25%, 6/30/14    476  326,114  Conseco, Inc, Term Loan, 6.50%, 10/10/13    728  651,745 
Green Valley Ranch Gaming, LLC, Loan (Second Lien),               
 3.55%, 8/16/14    1,500  367,500        1,560,695 
Harrah’s Operating Co., Inc., Term B-3 Loan,        Internet & Catalog Retail — 0.3%       
 3.28%, 1/28/15    726  576,991  FTD Group, Inc., Base Prime, 6.75%, 8/26/14    688  686,239 
Harrah’s Operating Term B-4 Loan, 9.50%, 10/31/16    1,500  1,462,709  Oriental Trading Co., Inc., Loan (Second Lien),       
OSI Restaurant Partners, LLC, Pre-Funded RC Loan,         6.24%, 1/31/14    500  110,000 
 0.12% – 2.56%, 6/14/13    32  26,727        796,239 
See Notes to Financial Statements.               
                                                         ANNUAL REPORT                                                           OCTOBER 31, 2009      31 


Schedule of Investments (continued)    BlackRock Floating Rate Income Trust (BGT) 
          (Percentages shown are based on Net Assets) 
      Par        Par   
Floating Rate Loan Interests (c)    (000)   Value  Floating Rate Loan Interests (c)    (000)           Value 
Leisure Equipment & Products — 0.3%        Media (concluded)       
24 Hour Fitness Worldwide, Inc., Tranche B Term Loan,        Insight Midwest Holdings, LLC, B Term Loan,       
 2.75% – 2.79%, 6/08/12    USD  965 $  894,234   2.29%, 4/07/14  USD  700  $ 663,500 
Life Sciences Tools & Services — 0.8%        Kabel Deutschland GMBH, A Facility-Assignment,       
Life Technologies Corp., Term B Facility,         2.18%, 6/01/12  EUR  4,000  5,605,645 
 5.25%, 11/23/15      2,378  2,385,424  Lamar Media Corp.:       
               Series B Incremental Loan, 5.50%, 9/28/12  USD  2,875  2,851,569 
Machinery — 1.7%               Term Loan, 5.50%, 9/30/12    641  635,871 
Accuride Term Loan, 6.00%, 1/31/12  GBP  1,150  1,139,579  Lavena Holding 3 GmbH (Prosiebensat.1 Media AG):       
Blount, Inc., Term Loan B, 2.00% – 3.25%, 8/09/10  USD  533  506,600       Facility B, 3.53%, 6/28/15  EUR  337  323,548 
LN Acquisition Corp. (Lincoln Industrial):             Facility C, 3.78%, 6/30/16    674  647,096 
     Delayed Draw Term Loan (First Lien),        Liberty Cablevision of Puerto Rico, Ltd., Initial Term       
     2.79%, 7/11/14      254  220,823   Facility, 2.25%, 6/17/14  USD  1,466  1,238,981 
     Initial U.S. Term Loan (First Lien), 2.79%, 7/11/14    659  573,043  Local TV Finance, LLC, Term Loan, 2.25%, 5/07/13    739  590,317 
NACCO Materials Handling Group, Inc., Loan,        MCC Iowa LLC (Mediacom Broadband Group),       
 2.24% – 3.41%, 3/21/13      484  372,488   Tranche E Term Loan, 6.50%, 1/03/16    597  598,470 
Oshkosh Truck Corp., Term B Loan,        MCNA Cable Holdings LLC (OneLink Communications),       
 6.29% – 6.33%, 12/06/13      2,115  2,108,175   Loan, 7.23%, 3/01/13 (e)    1,933  773,361 
Standard Steel, LLC:          Mediacom Illinois, LLC (fka Mediacom       
     Delayed Draw Term Loan, 8.25%, 7/02/12    74  63,030   Communications, LLC), Tranche D Term Loan,       
     Initial Term Loan, 9.00%, 7/02/12    368  312,724   5.50%, 3/31/17    1,250  1,251,563 
        5,296,462  Mediannuaire Holding (Pages Jaunes):       
Marine — 1.1%               Term Loan B2, 3.03%, 1/11/15  EUR  438  457,955 
Delphi Acquisition Holding I B.V. (fka Dockwise):             Term Loan C, 3.53%, 1/11/16    905  947,420 
     Facility B1, 2.28%, 1/12/15    688  649,708       Term Loan D, 5.03%, 1/11/17    500  448,853 
     Facility B2, 2.28%, 1/12/15    470  443,100  Metro-Goldwyn-Mayer Inc., Tranche B Term Loan,       
     Facility C1, 3.16%, 1/11/16    577  544,590   20.50%, 4/09/12  USD  1,905  1,082,186 
     Facility C2, 3.16%, 1/11/16    470  443,100  Mission Broadcasting, Inc., Term B Loan,       
     Facility D1, 4.78%, 1/11/16    650  513,500   5.00%, 10/01/12    1,099  923,069 
     Facility D2, 4.78%, 1/11/16    1,000  790,000  Multicultural Radio Broadcasting, Inc., Term Loan,       
           2.99%, 12/04/13    313  219,100 
        3,383,998  NTL Inc.:       
Media — 25.9%               C Facility, 3.58%, 7/17/13  GBP  3,875  5,848,420 
Acosta, Inc., 2006 Term Loan, 2.50%, 7/28/13    1,185  1,120,156       Term Loan B1, 2.89%, 9/03/12    434  684,184 
Affinion Group Holdings, Inc. Loan, 8.27%, 3/01/12 (e)    1,021  903,991       Term Loan B2, 2.89%, 9/03/12    508  799,702 
Amsterdamse Beheer — En Consultingmaatschappij BV        NVT Networks LLC, Exit Term Loan, 13.00%, 10/01/12  USD  160  160,050 
 (Casema) Casema:          Newsday, LLC:       
     B1 Term Loan Facility, 2.93%, 11/02/14  EUR  625  873,332       Fixed Rate Term Loan, 10.50%, 8/01/13    1,500  1,570,001 
     C Term Loan Facility, 3.43%, 11/02/15    625  873,332       Floating Rate Term Loan, 6.53%, 8/01/13    1,250  1,231,250 
Atlantic Broadband Finance, LLC, Tranche B-2-A        Nexstar Broadcasting, Inc, Term B Loan,       
 Term Loan, 2.54%, 9/01/11  USD  69  68,033   5.00% – 6.25%, 10/01/12    1,039  976,204 
Atlantic Broadband Tranche B-2-B Term Loan,        Nielson Finance LLC, Dollar Term Loan:       
 6.75%, 6/01/13      1,866  1,848,493       Class A, 2.24%, 8/09/13    1,178  1,093,676 
Bresnan Communications, LLC, Term Loan             Class B, 3.99%, 5/01/16    2,292  2,145,880 
 (Second Lien), 4.75%, 3/29/14    250  235,625  Penton Media, Inc.:       
Catalina Marketing Corp., Initial Term Loan,             Institutional Loan (Second Lien), 5.28%, 1/29/10    1,000  210,000 
 3.00%, 10/01/14      1,345  1,276,398       Term Loan (First Lien), 2.53% – 2.62%, 11/30/09    1,097  744,047 
Cengage Learning Acquisitions, Inc. (Thomson Learning),        Puerto Rico Cable Acquisition Co. Inc. (D/B/A       
 Tranche 1 Incremental Term Loan, 7.50%, 7/03/14    5,411  5,151,017   Choice TV), Term Loan (Second Lien), 7.75%, 2/15/12  692  564,231 
Cequel Communications, LLC, Term Loan,        Quebecor Media, Facility B, 2.28%, 1/17/13    722  682,172 
 2.24% – 4.25%, 11/05/13      4,850  4,619,926  Springer:       
Charter Communications Operating, LLC, New Term Loan,           Term Loan B, 3.14%, 9/16/11  EUR  910  1,247,398 
 6.25%, 3/06/14      1,299  1,177,279       Term Loan C, 3.52%, 9/17/12    1,188  1,627,908 
Charter Communications, Incremental Term Loan,        Sunshine Acquisition Ltd. (aka HIT Entertainment),       
 9.25%, 3/25/14      2,996  3,021,893   Term Facility, 2.73%, 3/20/12  USD  1,998  1,735,807 
FoxCo Acquisition Sub, LLC, Term Loan, 7.50%, 7/14/15    2,391  2,166,610  TWCC Holding Corp., Term Loan, 7.25%, 9/14/15    1,736  1,757,846 
HIT Entertainment, Inc., Term Loan (Second Lien),        Telecommunications Management, LLC:       
 5.98%, 2/26/13      1,000  532,500       Multi-Draw Term Loan, 3.49%, 6/30/13    232  171,473 
HMH Publishing Co. Ltd.:               Term Loan, 3.49%, 6/30/13    919  680,153 
     Mezzanine, 17.50%, 11/14/14    1,063  292,405  UPC Financing Partnership, Facility U,       
     Tranche A Term Loan, 5.28%, 6/12/14    2,648  2,281,948   4.44%, 12/31/17  EUR  3,767  5,085,895 
Hanley-Wood, LLC (FSC Acquisition), Term Loan,        World Color USA Corp. (fka Quebecor World Inc.),       
 2.49% – 2.53%, 3/08/14      2,212  922,069   9.00%, 7/23/12  USD  1,622  1,622,066 
Hargray Acquisition Co./DPC Acquisition LLC/HCP        Yell Group Plc, Term Loan B1, 3.28%, 10/27/12    2,500  1,760,715 
 Acquisition LLC:                80,896,838 
     Loan (Second Lien), 5.97%, 1/29/15    500  312,500         
     Term Loan (First Lien), 2.72%, 6/27/14    368  343,708         
Harland Clarke Holdings Corp. (fka Clarke               
 American Corp.), Tranche B Term Loan,               
 2.74% – 2.78%, 6/30/14      1,459  1,218,041         
See Notes to Financial Statements.               
32  ANNUAL REPORT                                                 OCTOBER 31, 2009       


Schedule of Investments (continued)    BlackRock Floating Rate Income Trust (BGT) 
        (Percentages shown are based on Net Assets) 
    Par        Par   
Floating Rate Loan Interests (c)    (000)  Value  Floating Rate Loan Interests (c)    (000)  Value 
Metals & Mining — 0.6%        Software — 0.2%       
Essar Steel Algoma Inc. (fka Algoma Steel Inc.),        Bankruptcy Management Solutions, Inc.:       
 Term Loan, 8.00%, 6/20/13  USD  1,934 $  1,813,014  Loan (Second Lien), 6.49%, 7/31/13  USD  485 $  97,909 
Multi-Utilities — 0.6%        Term Loan (First Lien), 4.25%, 7/31/12    945  567,149 
FirstLight Power Resources, Inc. (fka NE Energy, Inc.):              665,058 
     Synthetic Letter of Credit, 0.16%, 11/01/13    159  145,457  Specialty Retail — 0.6%       
     Term Advance (Second Lien), 4.81%, 5/01/14    750  609,375  Adesa, Inc. (KAR Holdings, Inc.), Initial Term Loan,       
     Term B Advance (First Lien), 2.81%, 11/01/13    1,230  1,128,922   2.50%, 10/21/13    500  477,500 
Mach Gen, LLC Synthetic Letter of Credit Loan        General Nutrition Centers, Inc., Term Loan,       
 (First Lien), 0.03%, 2/22/13    69  63,696   2.50% – 2.54%, 9/16/13    261  240,795 
      1,947,450  Orchard Supply Hardware, Term Loan B,       
Multiline Retail — 1.8%         2.70%, 12/21/10    1,500  1,276,350 
Dollar General Corp.:              1,994,645 
     Tranche B-1 Term Loan, 2.99% – 3.03%, 7/07/14    1,247  1,190,066  Trading Companies & Distributors — 0.4%       
     Tranche B-2 Term Loan, 2.99%, 7/07/14    499  473,685  Beacon Sales Acquisition, Inc., Term B Loan,       
Hema BV Term Loan B (Euro), 5.43%, 1/01/17   EUR  3,800  3,914,585   2.24% – 2.29%, 9/30/13    1,188  1,110,373 
      5,578,336  Wireless Telecommunication Services — 1.5%       
Oil, Gas & Consumable Fuels — 1.9%        Digicel International Finance Ltd., Tranche A,       
Big West Oil, LLC:         2.81%, 3/30/12    1,938  1,855,193 
     Delayed Advance Loan, 4.50%, 5/15/14   USD  920  878,365  MetroPCS Wireless, Inc., Tranche B Term Loan,       
     Initial Advance Loan, 4.50%, 5/15/14    732  698,602   2.50% – 2.75%, 11/03/13    1,605  1,505,191 
Coffeyville Resources, LLC Tranche D Term Loan,        Ntelos Inc., Term B Advance, 5.75%, 8/07/15    1,250  1,253,125 
 8.50%, 12/30/13    1,037  1,036,440        4,613,509 
Drummond Co., Inc., Term Advance, 1.49%, 2/14/11    950  921,500         
Niska Gas Storage Canada ULC, Canadian Term Loan B,      Total Floating Rate Loan Interests — 95.7%      298,940,865 
 2.00%, 5/12/13    450  428,733         
Niska Gas Storage US, LLC:               
     US Term B Loan, 2.00%, 5/12/13    47  45,047         
     Wild Goose Acquisition Draw-US Term B,        Foreign Government Obligations       
     2.00%, 5/12/13    32  30,514  Brazilian Government International Bond,       
Vulcan Energy Term Loan B, 5.50%, 9/30/15    1,750  1,760,938   10.25%, 6/17/13    475  585,200 
      5,800,139  Colombia Government International Bond,       
Paper & Forest Products — 1.0%         3.84%, 3/17/13 (c)(h)    1,200  1,230,000 
Georgia-Pacific LLC, Term B Loan,        Mexican Bonos Series M, 9.00%, 12/22/11  MXN 13,520  1,100,441 
 2.28% – 2.46%, 12/22/12    3,263  3,136,698  Republic of Venezuela, 1.28%, 4/20/11 (c)(h)  USD  4,000  3,440,000 
Verso Paper Finance Holdings LLC, Loan,        South Africa Government International Bond,       
 6.73% – 7.48%, 2/01/13 (e)    360  120,629   7.38%, 4/25/12    2,400  2,634,000 
        Turkey Government International Bond,       
      3,257,327   7.00%, 9/26/16    2,735  3,022,175 
Personal Products — 0.4%        Uruguay Government International Bond,       
American Safety Razor Co., LLC, Loan (Second Lien),         6.88%, 1/19/16  EUR  950  1,460,979 
 6.54%, 1/30/14    1,525  1,212,375  Total Foreign Government Obligations — 4.3%      13,472,795 
Pharmaceuticals — 2.3%               
Catalent Pharma Solutions, Inc. (fka Cardinal               
 Health 409, Inc.), Euro Term Loan, 2.68%, 4/15/14   EUR  2,444  3,164,780    Beneficial   
Warner Chilcott:            Interest   
     Delay Draw Term Loan, 3.78%, 4/12/10   USD  524  524,673  Other Interests (i)    (000)   
     Term Loan A1, 5.50%, 10/14/14    1,390  1,391,134         
     Term Loan B1, 5.75%, 3/30/15    695  695,567  Auto Components — 0.6%       
     Term Loan B2, 5.75%, 4/30/15    1,529  1,530,248  Delphi Debtor in Possession Hold Co. LLP Class B       
         Membership Interests  USD  268  1,963,437 
      7,306,402         
        Diversified Financial Services — 0.1%       
Professional Services — 0.3%        JG Wentorth LLC Preferred Equity Interests    515  434,273 
Booz Allen Hamilton Inc., Tranche B Term Loan,               
 7.50%, 7/31/15    992  1,000,643  Health Care Providers & Services — 0.0%       
        Critical Care Systems International, Inc.    947  190 
Real Estate Management & Development — 0.6%               
Enclave, First Lien Term Loan, 6.14%, 3/01/12    2,000  248,072  Household Durables — 0.0%       
Georgian Towers, Term Loan, 6.14%, 3/01/12    2,000  234,496  Berkline Benchcraft Equity LLC    6,155   
Pivotal Promontory, LLC, Second Lien Term Loan,        Media — 0.1%       
 12.00%, 8/31/11 (b)(d)    750  37,500  New Vision LLC Holdings    40,441  328,381 
Realogy Corp. Second Lien Term Loan,        Total Other Interests — 0.8%      2,726,281 
 13.50%, 10/15/17    1,250  1,282,291         
      1,802,359         
See Notes to Financial Statements.               
                                                         ANNUAL REPORT                                                         OCTOBER 31, 2009      33 


Schedule of Investments (continued)            BlackRock Floating Rate Income Trust (BGT) 
                    (Percentages shown are based on Net Assets) 
Preferred Securities                               
Preferred Stocks    Shares  Value  (f) Represents a zero-coupon bond. Rate shown reflects the current yield as of 
          report date.                   
Capital Markets — 0.0%                               
Marsico Parent Superholdco, LLC, 16.75% (a)  100 $  22,500  (g) Convertible security.               
Total Preferred Securities — 0.0%    22,500  (h) Restricted securities as to resale, representing 1.5% of net assets were as follows: 
                    Acquisition         
          Issue        Date    Cost    Value 
Warrants (j)          Colombia Government               
             International Bond,               
Chemicals — 0.0%             3.84%, 3/17/13    2/15/06  $ 1,277,303  $ 1,230,000 
British Vita Holding Co. (non expiring) (a)  166      Republic of Venezuela,               
Machinery — 0.0%             1.28%, 4/20/11    10/26/04  3,860,186  3,440,000 
Synventive Molding Solutions (expires 1/15/13)  2      Total            $ 5,137,489  $ 4,670,000 
Media — 0.0%                               
Cumulus Media Warrants (expires 12/31/19)  2,315  2,176  (i) Other interests represent beneficial interest in liquidation trusts and other reorgani- 
New Vision Holdings LLC (expires 9/30/14)  22,447  224    zation entities and are non-income producing.         
      2,400  (j) Warrants entitle the Fund to purchase a predetermined number of shares of com- 
          mon stock and are non-income producing. The purchase price and number of 
Total Warrants — 0.0%      2,400    shares are subject to adjustment under certain conditions until the expiration date. 
Total Long-Term Investments        (k) Investments in companies considered to be an affiliate of the Fund, for purposes of 
(Cost — $433,669,495) — 125.9%    393,951,147    Section 2(a)(3) of the Investment Company Act of 1940, were as follows:   
                          Net     
          Affiliate            Activity    Income 
Short-Term Securities          BlackRock Liquidity Funds, TempFund,           
BlackRock Liquidity Funds, TempFund,           Institutional Class        $ 9,320,934  $ 16,254 
 Institutional Class, 0.18% (k)(l)  9,320,934  9,320,934                         
        (l) Represents the current yield as of report date.         
Total Short-Term Securities                               
(Cost — $9,320,934) — 3.0%      9,320,934    For Fund compliance purposes, the Fund industry classifications refer to any one 
          or more of the industry sub-classifications used by one or more widely recognized 
          market indexes or ratings group indexes, and/or as defined by Fund management. 
          This definition may not apply for purposes of this report, which may combine 
          industry sub-classifications for reporting ease.         
Options Purchased    Contracts                           
Over-the-Counter Call Options        Foreign currency exchange contracts as of October 31, 2009 were as follows: 
Marsico Parent Superholdco LLC, expiring 12/21/19        Currency    Currency      Settlement  Unrealized 
 at USD 942.86, Broker Goldman Sachs Group, Inc.  26  6,110    Purchased      Sold  Counterparty  Date  Depreciation 
Total Options Purchased (Cost — $25,422) — 0.0%    6,110    EUR  248,000  USD  365,155  Citibank NA  11/03/09 $  (186) 
Total Investments (Cost — $443,015,851*) — 128.9%    403,278,191    USD70,188,421  EUR 48,087,500  Citibank NA  11/18/09    (576,271) 
Liabilities in Excess of Other Assets — (10.1)%    (31,593,957)    USD  9,468,195  GBP  5,811,500  Citibank NA  1/27/10    (65,153) 
Preferred Shares, at Redemption Value — (18.8)%    (58,812,035)    USD  1,038,130  MXN 14,000,000  Citibank NA  1/27/10    (9,353) 
Net Assets Applicable to Common Shares — 100.0%  $ 312,872,199    Total                $ (650,963) 
* The cost and unrealized appreciation (depreciation) of investments as of October 31,    Credit default swaps on single-name issue — buy protection oustanding as of 
       2009, as computed for federal income tax purposes, were as follows:      October 31, 2009 were as follows:           
       Aggregate cost    $ 443,044,301                         
                Pay        Notional     
       Gross unrealized appreciation  $ 12,539,776          Fixed  Counter-      Amount  Unrealized 
       Gross unrealized depreciation    (52,305,886)    Issuer    Rate  party  Expiration  (000)  Appreciation 
       Net unrealized depreciation  $ (39,766,110)    Ford Motor Co.  5.00%  Deutsche  September       
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933.              Bank AG  2014  USD 275  $ 4,930 
These securities may be resold in transactions exempt from registration to qualified                         
       institutional investors.          Credit default swaps on single-name issues — sold protection outstanding as of 
          October 31, 2009 were as follows:           
(b) Non-income producing security.                             
 (c) Variable rate security. Rate shown is as of report date.          Receive          Notional     
              Fixed  Counter-    Credit  Amount  Unrealized 
(d) Issuer filed for bankruptcy and/or is in default of interest payments.                           
          Issuer  Rate  party Expiration Rating1 (000)2 Depreciation 
 (e) Represents a payment-in-kind security which may pay interest/dividends in                         
       additional par/shares.          BAA Ferrovial                   
          Junior Term      Deutsche           
           Loan  2.00%  Bank AG March 2012  NR   GPB 1,800 $  (388,694) 
           1  Using Standard & Poor’s rating of the issuer.       
           2  The maximum potential amount the Fund may pay should a negative credit 
            event take place as defined under the terms of the agreement.     
See Notes to Financial Statements.                             
34  ANNUAL REPORT              OCTOBER 31, 2009         


Schedule of Investments (concluded)          BlackRock Floating Rate Income Trust (BGT) 
   Credit default swaps on index issue — buy protection oustanding as of October 31,    The following table summarizes the inputs used as of October 31, 2009 in 
  2009 were as follows:              determining the fair valuation of the Fund’s investments:   
                  Valuation        Investments in 
    Pay      Notional                   
                  Inputs           Securities 
    Fixed  Counter-    Amount  Unrealized               
  Issuer  Rate  party  Expiration  (000)  Depreciation                   Assets 
                  Level 1         
  LCDX North                 Long-Term Investments:       
   America Index                   Common Stocks      $ 90,850 
   Series 12    Credit Suisse     June           Short-Term Securities      9,320,934 
   Volume 1  5.00% International  2014  USD 465  $ (65,282)    Total Level 1        9,411,784 
   Fair Value Measurements — Various inputs are used in determining the fair value of    Level 2         
  investments, which are as follows:             Long-Term Investments:       
                     Common Stocks      107,959 
  Level 1 — price quotations in active markets/exchanges for identical assets       Corporate Bonds      78,186,766 
     and liabilities                   Floating Rate Loan Interests      214,513,792 
  Level 2 — other observable inputs (including, but not limited to: quoted prices for       Foreign Government Obligations      13,472,795 
     similar assets or liabilities in markets that are active, quoted prices for identical       Preferred Securities      22,500 
     or similar assets or liabilities in markets that are not active, inputs other than       Warrants        2,176 
     quoted prices that are observable for the assets or liabilities (such as interest    Total Level 2        306,305,988 
     rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and    Level 3         
     default rates) or other market-corroborated inputs)           Long-Term Investments:       
  Level 3 — unobservable inputs based on the best information available in the       Common Stocks      112,485 
                     Corporate Bonds      288,246 
     circumstances, to the extent observable inputs are not available (including the       Floating Rate Loan Interests      84,427,073 
     Fund’s own assumptions used in determining the fair value of investments)       Other Interests        2,726,281 
  The inputs or methodology used for valuing securities are not necessarily an indica-       Warrants        224 
  tion of the risk associated with investing in those securities. For information about    Total Level 3        87,554,309 
  the Fund’s policy regarding valuation of investments and other significant accounting    Total        $ 403,272,081 
  policies, please refer to Note 1 of the Notes to Financial Statements.                 
                  Valuation      Other Financial 
                  Inputs      Instruments1 
                          Assets  Liabilities 
                  Level 1         
                  Level 2    $ 11,040  $ (716,245) 
                  Level 3      1,531  (461,174) 
                  Total    $ 12,571  $ (1,177,419) 
                   1  Other financial instruments are swaps, foreign currency exchange contracts, 
                    unfunded loan commitments and options. Swaps, foreign currency exchange 
                    contracts and unfunded loan commitments are valued at the unrealized appre- 
                    ciation/depreciation on the instrument and options are shown at market value. 
  The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:         
                      Investments in Securities     
              Common    Corporate  Floating Rate   Other     
                Stocks    Bonds  Loan Interests  Interests  Warrants  Total 
  Balance, as of October 31, 2008              — $120,800,878 $  318    $ 120,801,196 
  Accrued discounts/premiums                103,138      103,138 
  Realized gain (loss)                    (20,210,121)      (20,210,121) 
  Change in unrealized appreciation/depreciation2              34,906,002  (2,383,496) $  (8,051)  32,514,455 
  Net purchases (sales)                  (44,870,950)  2,383,369  8,051  (42,479,530) 
  Net transfers in/out of Level 3        $ 112,485   $ 288,246  (6,301,874)  2,726,090  224  (3,174,829) 
  Balance as of October 31, 2009        $ 112,485   $ 288,246 $ 84,427,073 $  2,726,281 $  224  $ 87,554,309 
   2 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.         
            Investments in               
          Other Financial               
            Instruments               
        Assets    Liabilities               
  Balance, as of October 31, 2008      $ (543,254)               
  Accrued discounts/premiums                       
  Realized gain (loss)                           
  Change in unrealized appreciation/depreciation      154,560               
  Net purchases (sales)                         
  Net transfers in/out of Level 3  $ 1,531    (72,480)               
  Balance, as of October 31, 2009  $ 1,531  $ (461,174)               
See Notes to Financial Statements.                       
      ANNUAL REPORT              OCTOBER 31, 2009    35 


Statements of Assets and Liabilities           
    BlackRock  BlackRock  BlackRock  BlackRock  BlackRock  BlackRock 
    Credit  Credit  Credit  Credit  Enhanced  Floating 
    Allocation  Allocation  Allocation  Allocation  Capital  Rate 
    Income  Income  Income  Income  and Income  Income 
    Trust I, Inc.  Trust II, Inc.  Trust III  Trust IV  Fund, Inc.  Trust 
October 31, 2009    (PSW)  (PSY)  (BPP)  (BTZ)  (CII)  (BGT) 
     Assets               
Investments at value — unaffiliated1  $ 80,372,818  $ 399,129,254  $ 172,356,269  $ 555,220,835  $ 604,321,715  $ 393,957,257 
Investments at value — affiliated2  33,286,296  41,019,397  51,450,797  267,832,781  24,567,455  9,320,934 
Unrealized appreciation on swaps            4,930 
Cash        702  320    179,334 
Cash collateral pledged for options written          1,228,905   
Cash collateral for swaps          600,000    600,000 
Swap premiums paid              102,776 
Foreign currency at value3    424    529  49  7,407  9,337,968 
Investments sold receivable    38,531,774  141,858,976  62,124,877  117,670,917  18,280,263  6,625,542 
Interest receivable    1,232,806  6,597,165  2,228,881  7,302,689    3,131,832 
Dividends receivable    129,555  133,293  58,707  832,499  1,348,426   
Margin variation receivable    26,000  36,719  20,563  197,020     
Income receivable — affiliated      204  256  304    341 
Swaps receivable              6,893 
Principal paydown receivable              2,934 
Other assets      52,733  55,181  81,418    124,654 
Prepaid expenses    54,878  86,085  41,606  119,075  55,894  127,541 
Total assets    153,634,551  588,913,826  288,338,368  949,857,907  649,810,065  423,522,936 
     Liabilities               
Unrealized depreciation on swaps  168,952  337,904  168,952  675,809    453,976 
Unrealized depreciation on unfunded loan commitments            70,949 
Unrealized depreciation on foreign currency             
   exchange contracts              650,963 
Loan payable              14,000,000 
Options written at value4          166,210  6,377,146   
Reverse repurchase agreements  4,972,041  9,510,590  13,234,688  61,576,368     
Investments purchased payable  12,023,936        24,384,912  35,248,237 
Investment advisory fees payable  71,449  303,207  159,933  522,028  469,580  206,219 
Income dividends payable — Common Shares  36,588  196,712  69,120  550,627    51,113 
Swaps payable    6,067  12,133  6,067  24,267    4,317 
Interest payable    1,761  3,368  4,687  21,808    40,826 
Other affiliates payable    728  3,172  1,636  5,428  3,882  2,224 
Officer’s and Directors’ fees payable  181  53,660  56,606  82,674  1,287  78,876 
Other accrued expenses payable  45,591  109,424  76,539  189,457  111,544  185,052 
Other liabilities              845,950 
Total liabilities    17,327,294  10,530,170  13,778,228  63,814,676  31,348,351  51,838,702 
     Preferred Shares at Redemption Value             
$25,000 per share liquidation preferrence, plus             
   unpaid dividends5,6,7    40,258,949  169,090,727  70,426,884  231,044,104    58,812,035 
Net Assets Applicable to Common Shareholders  $ 96,048,308  $ 409,292,929  $ 204,133,256  $ 654,999,127  $ 618,461,714  $ 312,872,199 
     Net Assets Applicable to Common Shareholders Consist of             
Paid-in capital8,9,10    $ 237,664,112  $ 942,700,922  $ 423,649,824  $1,138,011,175  $ 808,123,162  $ 427,560,397 
Undistributed (distributions in excess of) net             
   investment income    636,666  2,088,988  952,028  1,348,832    (397,610) 
Accumulated net realized loss    (128,402,541)  (451,276,374)  (187,666,466)  (403,003,336)  (131,729,362)  (73,097,284) 
Net unrealized appreciation/depreciation  (13,849,929)  (84,220,607)  (32,802,130)  (81,357,544)  (57,932,086)  (41,193,304) 
Net Assets Applicable to Common Shareholders  $ 96,048,308  $ 409,292,929  $ 204,133,256  $ 654,999,127  $ 618,461,714  $ 312,872,199 
Net asset value per Common Share  $ 9.31  $ 10.03  $ 11.05  $ 12.64  $ 14.40  $ 13.29 
     1 Investments at cost — unaffiliated  $ 94,148,823  $ 483,046,802  $ 205,009,029  $ 637,401,845  $ 665,068,380  $ 433,694,917 
     2 Investments at cost — affiliated  $ 33,286,296  $ 41,019,397  $ 51,450,797  $ 267,832,781  $ 24,567,455  $ 9,320,934 
     3 Foreign currency at cost    $ 368    $ 459  $ 43  $ 9,142  $ 9,386,817 
     4 Premiums received          $ 828,039  $ 9,193,459   
     5 Preferred Shares par value per share  $ 0.10  $ 0.10  $ 0.001  $ 0.001    $ 0.001 
     6 Preferred Shares outstanding  1,610  6,761  2,817  9,240    2,352 
     7 Preferred Shares authorized  5,460  22,000  unlimited  unlimited    unlimited 
     8 Common Shares par value per share  $ 0.10  $ 0.10  $ 0.001  $ 0.001  $ 0.10  $ 0.001 
     9 Common Shares outstanding  10,311,941  40,807,418  18,467,785  51,828,157  42,953,312  23,545,239 
   10 Common Shares authorized  199,994,540  199,978,000  unlimited  unlimited  200 million  unlimited 
See Notes to Financial Statements.             
36  ANNUAL REPORT      OCTOBER 31, 2009     


Statements of Operations               
  BlackRock  BlackRock  BlackRock  BlackRock   BlackRock  BlackRock 
       Credit       Credit       Credit         Credit     Enhanced       Floating 
  Allocation  Allocation  Allocation  Allocation    Capital         Rate 
       Income       Income       Income       Income   and Income       Income 
  Trust I, Inc.  Trust II, Inc.       Trust III       Trust IV     Fund, Inc.         Trust 
Year Ended October 31, 2009       (PSW)         (PSY)       (BPP)         (BTZ)     (CII)         (BGT) 
     Investment Income               
Interest  $ 7,416,978  $ 37,527,272  $ 17,161,194  $ 41,120,279  $ 1,342  $ 26,881,305 
Dividends  2,464,323  11,794,850  5,227,665  18,091,488  17,659,173   
Foreign taxes withheld            (115,844)   
Income — affiliated  130,058  155,313  133,485  486,591    143,663  23,848 
Facility and other fees              503,103 
Total income  10,011,359  49,477,435  22,522,344  59,698,358  17,688,334  27,408,256 
     Expenses               
Investment advisory  732,203  3,091,438  1,631,690  5,363,633    4,832,658  2,774,485 
Commissions for Preferred Shares  74,688  348,733  134,702  375,820      102,063 
Professional  66,950  72,163  79,888  142,814    75,892  253,450 
Transfer agent  46,330  126,203  37,871  35,582    93,722  29,425 
Accounting services  21,930  120,409  84,218  163,930    161,229  58,206 
Printing  14,291  58,934  55,147  147,566    45,877  73,520 
Officer and Directors  10,058  53,432  35,932  90,453    70,049  49,794 
Registration  9,180  13,907  9,278  17,673    14,571  10,416 
Custodian  6,980  24,134  15,059  36,325    52,648  55,304 
Borrowing costs1              391,557 
Miscellaneous  61,634  107,378  63,515  130,998    52,161  117,808 
Total expenses excluding interest expense  1,044,244  4,016,731  2,147,300  6,504,794    5,398,807  3,916,028 
Interest expense  102,223  229,496  389,341  1,784,509      1,140,406 
Total expenses  1,146,467  4,246,227  2,536,641  8,289,303    5,398,807  5,056,434 
Less fees waived by advisor  (14,003)  (14,491)  (21,506)  (95,646)    (7,172)  (709,042) 
Less fees paid indirectly  (1,843)  (852)  (3,758)  (1,210)       
Total expenses after fees waived and               
   paid indirectly  1,130,621  4,230,884  2,511,377  8,192,447    5,391,635  4,347,392 
Net investment income  8,880,738  45,246,551  20,010,967  51,505,911  12,296,699  23,060,864 
     Realized and Unrealized Gain (Loss)               
Net realized gain (loss) from:               
   Investments  (55,149,960)  (188,070,488)  (112,478,894)  (248,073,396)  (103,821,441)  (44,719,252) 
   Financial futures contracts and swaps  (1,780,676)  (8,923,503)  (3,915,858)  (2,741,351)    (617,742)  (1,014,281) 
   Foreign currency transactions  4,366  34,450  1,348  22,255      (2,653,326) 
   Options written      -  3,763,345  52,995,108   
  (56,926,270)  (196,959,541)  (116,393,404)  (247,029,147)  (51,444,075)  (48,386,859) 
Net change in unrealized appreciation/depreciation on:               
   Investments  77,627,511  284,111,656  160,001,314  372,102,104  142,551,744  118,712,825 
   Financial futures contracts and swaps  527,517  1,647,334  906,527  4,642,624      371,495 
   Foreign currency transactions  (4,229)  (32,957)  (990)  (158,256)    (948)  (6,642,896) 
   Options written        2,230,492    5,758,405   
   Unfunded corporate loans              96,088 
  78,150,799  285,726,033  160,906,851  378,816,964  148,309,201  112,537,512 
Total realized and unrealized gain  21,224,529  88,766,492  44,513,447  131,787,817  96,865,126  64,150,653 
     Dividends to Preferred Shareholders From               
Net investment income  (774,824)  (3,570,342)  (577,861)  (3,828,948)      (971,243) 
Net Increase in Net Assets Applicable to Common               
   Shareholders Resulting from Operations  $ 29,330,443  $ 130,442,701  $ 63,946,553  $ 179,464,780  $ 109,161,825  $ 86,240,274 
1 See Note 8 of the Notes to the Financial Statements for details of borrowings.             
See Notes to Financial Statements.               
                                                         ANNUAL REPORT        OCTOBER 31, 2009    37 


Statements of Changes in Net Assets             
      BlackRock Credit Allocation  BlackRock Credit Allocation 
      Income Trust I, Inc. (PSW)  Income Trust II, Inc. (PSY) 
Increase (Decrease) in Net Assets    Year Ended October 31,  Year Ended October 31, 
Applicable to Common Shareholders:    2009    2008  2009  2008 
     Operations               
Net investment income      $ 8,880,738  $ 17,531,692  $ 45,246,551  $ 70,160,283 
Net realized loss      (56,926,270)    (40,404,468)  (196,959,541)  (147,042,661) 
Net change in unrealized appreciation/depreciation    78,150,799    (83,863,786)  285,726,033  (333,625,419) 
Dividends to Preferred Shareholders from net investment income    (774,824)    (4,921,335)  (3,570,342)  (19,937,495) 
Net increase (decrease) in net assets applicable to Common Shareholders             
   resulting from operations      29,330,443    (111,657,897)  130,442,701  (430,445,292) 
     Dividends and Distributions to Common Shareholders From             
Net investment income      (8,498,069)    (12,521,666)  (45,358,157)  (46,831,403) 
Tax return of capital      (1,345,345)    (545,246)  (116,310)  (9,002,427) 
Decrease in net assets resulting from dividends and distributions             
   to Common Shareholders      (9,843,414)    (13,066,912)  (45,474,467)  (55,833,830) 
     Capital Share Transactions             
Reinvestment of common dividends    131,419      1,192,453   
     Net Assets Applicable to Common Shareholders             
Total increase (decrease) in net assets    19,618,448    (124,724,809)  86,160,687  (486,279,122) 
Beginning of year      76,429,860    201,154,669  323,132,242  809,411,364 
End of year      $ 96,048,308  $ 76,429,860  $ 409,292,929  $ 323,132,242 
Undistributed net investment income    $ 636,666  $ 1,283,192  $ 2,088,988  $ 7,207,075 
    BlackRock Credit Allocation  BlackRock Credit Allocation 
      Income Trust III (BPP)    Income Trust IV (BTZ) 
    Year  Period    Year     
    Ended  January 1, 2008    Ended  Year Ended 
Increase (Decrease) in Net Assets  October 31,  to October 31,    December 31,  October 31, 
Applicable to Common Shareholders:  2009  2008    2007  2009  2008 
     Operations               
Net investment income    $ 20,010,967  $ 27,233,861  $ 37,729,277  $ 51,505,911  $ 68,908,426 
Net realized loss    (116,393,404)  (47,985,932)    (24,690,221)  (247,029,147)  (113,133,432) 
Net change in unrealized appreciation/depreciation  160,906,851  (149,715,592)    (61,889,014)  378,816,964  (408,221,553) 
Dividends and distributions to Preferred Shareholders from:             
   Net investment income    (577,861)  (5,653,232)    (11,458,715)  (3,828,948)  (17,100,517) 
   Net realized gain          (87,490)     
Net increase (decrease) in net assets applicable to Common Shareholders             
   resulting from operations    63,946,553  (176,120,895)    (60,396,163)  179,464,780  (469,547,076) 
     Dividends and Distributions to Common Shareholders From             
Net investment income    (17,461,459)  (15,206,928)    (29,219,599)  (48,398,817)  (46,857,132) 
Net realized gain          (312,510)     
Tax return of capital    (4,250,036)  (5,480,035)    (2,820,986)  (24,678,883)  (43,518,226) 
Decrease in net assets resulting from dividends and distributions             
   to Common Shareholders    (21,711,495)  (20,686,963)    (32,353,095)  (73,077,700)  (90,375,358) 
     Capital Share Transactions             
Reinvestment of common dividends  587,363  101,702    770,755     
     Net Assets Applicable to Common Shareholders             
Total increase (decrease) in net assets  42,822,421  (196,706,156)    (91,978,503)  106,387,080  (559,922,434) 
Beginning of period    161,310,835  358,016,991    449,995,494  548,612,047  1,108,534,481 
End of period    $ 204,133,256  $ 161,310,835  $ 358,016,991  $ 654,999,127  $ 548,612,047 
Undistributed (distributions in excess of) net investment income  $ 952,028  $ 2,846,583  $ (2,571,328)  $ 1,348,832  $ 3,486,479 
See Notes to Financial Statements.             
38  ANNUAL REPORT    OCTOBER 31, 2009     


Statements of Changes in Net Assets (concluded)         
  BlackRock Enhanced Capital    BlackRock   
  and Income Fund, Inc. (CII)  Floating Rate Income Trust (BGT) 
  Year  Period January 1,  Year  Year  Period  Year 
  Ended  2008 to  Ended  Ended  January 1, 2008  Ended 
Increase (Decrease) in Net Assets     October 31,  October 31,  December 31,  October 31,  to October 31,  December 31, 
Applicable to Common Shareholders:  2009  2008  2007  2009  2008  2007 
     Operations             
Net investment income  $ 12,296,699  $ 2,834,944  $ 3,828,423  $ 23,060,864  $ 33,370,850  $ 47,903,772 
Net realized gain (loss)  (51,444,075)  5,942,502  24,442,607  (48,386,859)  (19,428,459)  (10,326,522) 
Net change in unrealized appreciation/depreciation  148,309,201  (83,432,417)  (17,410,396)  112,537,512  (136,762,427)  (22,345,656) 
Dividends to Preferred Shareholders from net             
   investment income        (971,243)  (5,542,312)  (12,723,631) 
Net increase (decrease) in net assets applicable to             
   Common Shareholders resulting from operations  109,161,825  (74,654,971)  10,860,634  86,240,274  (128,362,348)  2,507,963 
     Dividends and Distributions to Common Shareholders From             
Net investment income  (12,510,205)  (2,820,467)  (4,178,081)  (27,963,106)  (24,133,870)  (26,833,571) 
Net realized gain  (50,728,478)  (7,621,956)  (25,569,419)       
Tax return of capital  (19,660,314)  (7,292,188)    (9,994,857)    (8,473,282) 
Decrease in net assets resulting from dividends and             
   distributions to shareholders  (82,898,997)  (17,734,611)  (29,747,500)  (37,957,963)  (24,133,870)  (35,306,853) 
     Capital Share Transactions             
Value of shares resulting from reorganization  420,968,153           
Reinvestment of common dividends  3,234,875          820,433 
Net increase in net assets derived from             
   capital share transactions  424,203,028          820,433 
     Net Assets Applicable to Common Shareholders             
Total increase (decrease) in net assets  450,465,856  (92,389,582)  (18,886,866)  48,282,311  (152,496,218)  (31,978,457) 
Beginning of period  167,995,858  260,385,440  279,272,306  264,589,888  417,086,106  449,064,563 
End of period  $ 618,461,714  $ 167,995,858  $ 260,385,440  $ 312,872,199  $ 264,589,888  $ 417,086,106 
Undistributed (distributions in excess of)             
   net investment income    $ 205,627    $ (397,610)  $ 8,661,698  $ 219,332 
See Notes to Financial Statements.             
                                                         ANNUAL REPORT        OCTOBER 31, 2009  39 


Statement of Cash Flows     
           BlackRock 
      Floating Rate 
      Income 
Year Ended October 31, 2009       Trust (BGT) 
     Cash Provided by Operating Activities     
Net increase in net assets resulting from operations, excluding dividends to Preferred Shareholders    $ 87,211,517 
Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities:   
   Decrease in interest receivable    2,477,996 
   Decrease in commitment fees receivable    2,301 
   Increase in other assets      (37,618) 
   Increase in income receivable — affiliated    (341) 
   Increase in prepaid expenses    (74,683) 
   Decrease in swaps receivable    19,241 
   Decrease in swaps payable      (150,019) 
   Decrease in investment advisor payable    (37,245) 
   Decrease in interest expense payable    (86,768) 
   Decrease in other affiliates payable    (884) 
   Increase in accrued expenses payable    24,637 
   Increase in other liabilities      838,450 
   Increase in Officer’s and Directors’ payable    30,273 
   Net realized and unrealized gain    (67,171,527) 
   Amortization of premium and discount on investments    (2,498,618) 
   Paid-in-kind income      (890,200) 
   Increase in cash collateral on swaps    (600,000) 
   Net periodic and termination payments of swaps    (340,836) 
Proceeds from sales and paydowns of long-term investments    262,712,645 
Purchases of long-term investments    (131,639,514) 
Net purchases of short-term securities    (7,820,185) 
Cash provided by operating activities    141,968,622 
     Cash Used for Financing Activities     
Cash receipts from borrowings      163,209,375 
Cash payments from borrowings    (272,359,375) 
Cash dividends paid to Common Shareholders    (38,016,260) 
Cash dividends paid to Preferred Shareholders    (980,133) 
Cash used for financing activities    (148,146,393) 
     Cash Impact from Foreign Exchange Fluctuations     
Cash impact from foreign exchange fluctuations    146,028 
     Cash:       
Net decrease in cash      (6,031,743) 
Cash and foreign currency at beginning of year    15,549,045 
Cash and foreign currency at end of year    $ 9,517,302 
     Cash Flow Information:       
Cash paid during the year for interest    $ 1,227,174 
     A Statement of Cash Flows is presented when a Fund had a significant amount of borrowing during the year, based on the average borrowing outstanding   
     in relation to total assets.       
See Notes to Financial Statements.     
40  ANNUAL REPORT  OCTOBER 31, 2009   


Financial Highlights    BlackRock Credit Allocation Income Trust I, Inc. (PSW) 
    Year Ended October 31,       
  2009  2008  2007    2006    2005 
     Per Share Operating Performance               
Net asset value, beginning of year  $ 7.43  $ 19.54  $ 22.25  $ 22.36  $ 23.69 
Net investment income  0.861  1.701  2.011    2.141    2.16 
Net realized and unrealized gain (loss)  2.06  (12.06)  (2.41)    0.07    (1.09) 
Dividends to Preferred Shareholders from net investment income  (0.08)  (0.48)  (0.71)    (0.63)    (0.40) 
Net increase (decrease) from investment operations  2.84  (10.84)  (1.11)    1.58    0.67 
Dividends and distributions to Common Shareholders from:               
   Net investment income  (0.83)  (1.22)  (1.18)    (1.69)    (2.00) 
Tax return of capital  (0.13)  (0.05)  (0.42)         
Total dividends and distributions  (0.96)  (1.27)  (1.60)    (1.69)    (2.00) 
Net asset value, end of year  $ 9.31  $ 7.43  $ 19.54  $ 22.25  $ 22.36 
Market price, end of year  $ 8.24  $ 7.00  $ 17.29  $ 21.26  $ 21.03 
     Total Investment Return2               
Based on net asset value  46.46%  (58.09)%  (5.03)%    7.97%    3.25% 
Based on market price  37.59%  (55.38)%  (12.05)%    9.69%    0.73% 
     Ratios to Average Net Assets Applicable to Common Shareholders               
Total expenses3  1.61%  2.00%  1.32%    1.29%    1.26% 
Total expenses after fees waived and paid indirectly3  1.59%  2.00%  1.32%    1.29%    1.26% 
Total expenses after fees waived and paid indirectly and excluding               
interest expense3  1.44%  1.48%  1.29%    1.29%    1.26% 
Net investment income3  12.45%  10.79%  9.38%    9.70%    9.23% 
Dividends to Preferred Shareholders  1.09%  3.03%  3.29%    2.84%    1.71% 
Net investment income to Common Shareholders  11.36%  7.76%  6.09%    6.86%    7.52% 
     Supplemental Data               
Net assets applicable to Common Shareholders, end of year (000)  $ 96,048  $ 76,430  $ 201,155  $ 228,734  $ 229,850 
Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)  $ 40,250  $ 68,250  $ 136,500  $ 136,500  $ 136,500 
Borrowings outstanding, end of year (000)  $ 4,972  $ 4,024  $ 590         
Average borrowings outstanding, during the year (000)  $ 5,321  $ 25,692  $ 2,690         
Portfolio turnover  36%  119%  88%    19%    25% 
Asset coverage per Preferred Share at $25,000 liquidation preference, end of year  $ 84,663  $ 53,009  $ 61,846  $ 66,907  $ 67,115 
     1 Based on average shares outstanding.               
     2 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.   
         Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.         
     3 Do not reflect the effect of dividends to Preferred Shareholders.               
See Notes to Financial Statements.               
                                                         ANNUAL REPORT    OCTOBER 31, 2009      41 


Financial Highlights    BlackRock Credit Allocation Income Trust II, Inc. (PSY) 
      Year Ended October 31,       
    2009  2008  2007    2006    2005 
     Per Share Operating Performance               
Net asset value, beginning of year  $ 7.96  $ 19.93  $ 22.36  $ 22.26  $ 23.48 
Net investment income1    1.11  1.73  2.02    2.03    2.09 
Net realized and unrealized gain (loss)  2.17  (11.84)  (2.35)    0.32    (0.91) 
Dividends to Preferred Shareholders from net investment income  (0.09)  (0.49)  (0.73)    (0.65)    (0.40) 
Net increase (decrease) from investment operations  3.19  (10.60)  (1.06)    1.70    0.78 
Dividends and distributions to Common Shareholders from:               
   Net investment income    (1.12)  (1.15)  (1.16)    (1.51)    (2.00) 
Tax return of capital    2  (0.22)  (0.21)    (0.09)     
Total dividends and distributions  (1.12)  (1.37)  (1.37)    (1.60)    (2.00) 
Net asset value, end of year    $ 10.03  $ 7.96  $ 19.93  $ 22.36  $ 22.26 
Market price, end of year    $ 8.90  $ 8.10  $ 16.94  $ 20.12  $ 21.20 
     Total Investment Return3                 
Based on net asset value    48.36%  (55.71)%  (4.35)%    8.77%    3.73% 
Based on market price    29.37%  (46.97)%  (9.65)%    2.77%    1.43% 
     Ratios to Average Net Assets Applicable to Common Shareholders               
Total expenses4    1.41%  1.90%  1.27%    1.23%    1.20% 
Total expenses after fees waived and paid indirectly4  1.41%  1.90%  1.27%    1.23%    1.20% 
Total expenses after fees waived and paid indirectly and excluding               
interest expense4    1.33%  1.40%  1.23%    1.23%    1.20% 
Net investment income4    15.05%  10.71%  9.29%    9.26%    8.96% 
Dividends to Preferred Shareholders  1.19%  3.04%  3.34%    2.96%    1.73% 
Net investment income to Common Shareholders  13.86%  7.67%  5.95%    6.30%    7.23% 
     Supplemental Data                 
Net assets applicable to Common Shareholders, end of year (000)  $ 409,293  $ 323,132  $ 809,411  $ 907,897  $ 903,601 
Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)  $ 169,025  $ 275,000  $ 550,000  $ 550,000  $ 550,000 
Borrowings outstanding, end of year (000)  $ 9,511  $ 54,369           
Average borrowings outstanding, during the year (000)  $ 15,842  $ 94,908  $ 14,375         
Portfolio turnover    16%  120%  81%    18%    28% 
Asset coverage per Preferred Share at $25,000 liquidation preference, end of year  $ 85,547  $ 54,408  $ 61,817  $ 66,294  $ 66,077 
     1 Based on average shares outstanding.               
     2 Amount is less than $(0.01) per share.               
     3 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.   
         Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.         
     4 Do not reflect the effect of dividends to Preferred Shareholders.               
See Notes to Financial Statements.               
42  ANNUAL REPORT    OCTOBER 31, 2009         


Financial Highlights      BlackRock Credit Allocation Income Trust III (BPP) 
    Period             
  Year  January 1,             
  Ended  2008 to             
  October 31,  October 31,    Year Ended December 31,     
  2009  2008  2007  2006    2005    2004 
     Per Share Operating Performance                 
Net asset value, beginning of period  $ 8.77  $ 19.47  $ 24.52  $ 24.43  $ 25.88  $ 25.58 
Net investment income  1.091  1.481  2.05  2.05    2.11    2.22 
Net realized and unrealized gain (loss)  2.40  (10.74)  (4.72)  0.62    (0.82)    0.33 
Dividends and distributions to Preferred Shareholders from:                 
   Net investment income  (0.03)  (0.31)  (0.62)  (0.46)    (0.26)    (0.16) 
   Net realized gain        (0.12)    (0.13)    (0.02) 
Net increase (decrease) from investment operations  3.46  (9.57)  (3.29)  2.09    0.90    2.37 
Dividends and distributions to Common Shareholders from:                 
   Net investment income  (0.95)  (0.83)  (1.59)  (1.58)    (1.74)    (2.00) 
   Net realized gain      (0.02)  (0.42)    (0.61)    (0.07) 
   Tax return of capital  (0.23)  (0.30)  (0.15)           
Total dividends and distributions  (1.18)  (1.13)  (1.76)  (2.00)    (2.35)    (2.07) 
Net asset value, end of period  $ 11.05  $ 8.77  $ 19.47  $ 24.52  $ 24.43  $ 25.88 
Market price, end of period  $ 9.94  $ 8.51  $ 17.31  $ 26.31  $ 24.20  $ 25.39 
     Total Investment Return2                 
Based on net asset value  47.16%  (51.22)%3  (13.86)%  8.89%    3.81%    10.15% 
Based on market price  36.42%  (46.76)%3  (28.62)%  17.98%    4.83%    11.01% 
     Ratios to Average Net Assets Applicable to Common Shareholders                 
Total expenses4  1.66%  1.96%5  1.46%  1.62%    1.51%    1.44% 
Total expenses after fees waived and paid indirectly4  1.64%  1.96%5  1.45%  1.62%    1.51%    1.44% 
Total expenses after fees waived and paid indirectly and excluding                 
   interest expense4  1.39%  1.39%5  1.24%  1.25%    1.22%    1.19% 
Net investment income4  13.08%  10.53%5  8.90%  8.46%    8.37%    8.66% 
Dividends paid to Preferred Shareholders  0.38%  2.19%5  2.70%  1.89%    1.27%    0.62% 
Net investment income to Common Shareholders  12.70%  8.34%5  6.20%  6.58%    7.10%    8.04% 
     Supplemental Data                 
Net assets applicable to Common Shareholders, end of period (000)  $ 204,133  $ 161,311  $ 358,017  $ 449,995  $ 447,190  $ 473,809 
Preferred Shares outstanding at $25,000 liquidation preference,                 
   end of period (000)  $ 70,425  $ 110,400  $ 220,800  $ 220,800  $ 220,800  $ 220,800 
Borrowings outstanding, end of period (000)  $ 13,235  $ 44,281             
Average borrowings outstanding, during the period (000)  $ 16,330  $ 51,995  $ 903  $ 1,303  $ 2,904  $ 782 
Portfolio turnover  16%  121%  97%  91%    77%    88% 
Asset coverage per Preferred Share at $25,000 liquidation preference,                 
   end of period  $ 97,465  $ 61,540  $ 65,554  $ 75,965  $ 75,642  $ 78,650 
     1 Based on average shares outstanding.                 
     2 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.   
         Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.         
     3 Aggregate total investment return.                 
     4 Do not reflect the effect of dividends to Preferred Shareholders.                 
     5 Annualized.                 
See Notes to Financial Statements.                 
                                                         ANNUAL REPORT      OCTOBER 31, 2009      43 


Financial Highlights  BlackRock Credit Allocation Income Trust IV (BTZ) 
        Period 
        December 27, 
        20061 to 
    Year Ended October 31,  October 31, 
                                 2009           2008           2007 
     Per Share Operating Performance       
Net asset value, beginning of period  $ 10.59  $ 21.39  $ 23.882 
Net investment income    0.993  1.333  1.25 
Net realized and unrealized gain (loss)  2.54  (10.06)  (1.86) 
Dividends to Preferred Shareholders from net investment income  (0.07)  (0.33)  (0.31) 
Net increase (decrease) from investment operations  3.46  (9.06)  (0.92) 
Dividends and distributions to Common Shareholders from:       
   Net investment income    (0.93)  (0.90)  (0.93) 
   Tax return of capital    (0.48)  (0.84)  (0.47) 
Total dividends and distributions  (1.41)  (1.74)  (1.40) 
Capital charge with respect to issuance of:       
   Common Shares        (0.04) 
   Preferred Shares        (0.13) 
Total capital charges        (0.17) 
Net asset value, end of period    $ 12.64  $ 10.59  $ 21.39 
Market price, end of period    $ 10.96  $ 9.36  $ 18.65 
     Total Investment Return4         
Based on net asset value    41.06%  (44.27)%  (4.42)%5 
Based on market price    38.38%  (43.51)%  (20.34)%5 
     Ratios to Average Net Assets Applicable to Common Shareholders       
Total expenses6    1.60%  1.65%  1.90%7 
Total expenses after fees waived and paid indirectly6  1.58%  1.65%  1.88%7 
Total expenses after fees waived and paid indirectly and excluding interest expense6  1.24%  1.21%  1.04%7 
Net investment income6    9.93%  7.63%  6.50%7 
Dividends to Preferred Shareholders  0.74%  1.89%  1.64%7 
Net investment income to Common Shareholders  9.19%  5.74%  4.86%7 
     Supplemental Data         
Net assets applicable to Common Shareholders, end of period (000)  $ 654,999  $ 548,612  $ 1,108,534 
Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)  $ 231,000  $ 231,000  $ 462,000 
Borrowings outstanding, end of period (000)  $ 61,576  $ 223,512  $ 88,291 
Average borrowings outstanding, during the period (000)  $ 76,521  $ 107,377  $ 96,468 
Portfolio turnover    30%  126%  35% 
Asset coverage per Preferred Share at $25,000 liquidation preference, end of period  $ 95,892  $ 84,384  $ 89,737 
     1 Commencement of operations. This information includes the initial investment by BlackRock Funding, Inc.       
     2 Net asset value, beginning of period, reflects a deduction of $1.12 per share sales charge from initial offering price of $25.00 per share.     
     3 Based on average shares outstanding.       
     4 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.   
         Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.     
     5 Aggregate total investment return.       
     6 Do not reflect the effect of dividends to Preferred Shareholders.       
     7 Annualized.         
See Notes to Financial Statements.       
44  ANNUAL REPORT  OCTOBER 31, 2009     


Financial Highlights    BlackRock Enhanced Capital and Income Fund, Inc. (CII) 
    Period            Period 
  Year  January 1,            April 30, 
  Ended  2008 to            20041 to 
      Year Ended December 31,       
  October 31,  October 31,          December 31, 
  2009  2008  2007  2006    2005    2004 
     Per Share Operating Performance                 
Net asset value, beginning of period  $ 13.78  $ 21.36  $ 22.91  $ 20.31  $ 20.76  $ 19.102 
Net investment income  0.293  0.233  0.313  0.373    0.463    0.46 
Net realized and unrealized gain (loss)  2.27  (6.36)  0.58  3.69    0.29    1.84 
Net increase (decrease) from investment operations  2.56  (6.13)  0.89  4.06    0.75    2.30 
Dividends and distributions from:                 
   Net investment income  (0.29)  (0.23)  (0.34)  (0.33)    (0.47)    (0.48) 
   Net realized gain  (1.19)  (0.62)  (2.10)  (1.13)    (0.73)    (0.11) 
   Tax return of capital  (0.46)  (0.60)            (0.01) 
Total dividends and distributions  (1.94)  (1.45)  (2.44)  (1.46)    (1.20)    (0.60) 
Capital charges with respect to the issuance of shares                (0.04) 
Net asset value, end of period  $ 14.40  $ 13.78  $ 21.36  $ 22.91  $ 20.31  $ 20.76 
Market price, end of period  $ 13.76  $ 12.37  $ 20.06  $ 20.41  $ 17.21  $ 18.32 
     Total Investment Return4                 
Based on net asset value  22.01%  (29.46)%5  4.79%  21.70%    4.69%    12.30%5 
Based on market price  29.88%  (32.58)%5  10.47%  27.95%    0.52%    (5.36)%5 
     Ratios to Average Net Assets                 
Total expenses  0.95%  1.10%6  1.96%  3.54%    2.96%    2.19%6 
Total expenses after fees waived and paid indirectly  0.95%  1.10%6  1.96%  3.54%    2.96%    1.96%6 
Total expenses after fees waived and paid indirectly                 
   and excluding interest expense  0.95%  1.01%6  1.19%  1.42%    1.47%    1.20%6 
Net investment income  2.16%  1.46%6  1.36%  1.75%    2.28%    3.52%6 
     Supplemental Data                 
Net assets, end of period (000)  $ 618,462  $ 167,996  $ 260,385  $ 279,272  $ 260,638  $ 266,345 
Borrowings outstanding, end of period (000)        $ 100,000  $ 109,000  $ 109,000 
Average borrowings outstanding, during the period (000)      $ 38,788  $ 107,504  $ 109,000  $ 98,750 
Portfolio turnover  138%  45%  63%  38%    61%    20% 
Asset coverage, end of period per $1,000        $ 3,793  $ 3,391  $ 3,444 
     1 Commencement of operations. This information includes the initial investment by BlackRock Investment Managers, LLC.           
     2 Net asset value, beginning of period, reflects a deduction of $0.90 per share sales charge from initial offering price of $20.00 per share.         
     3 Based on average shares outstanding.                 
     4 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.   
         Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.         
     5 Aggregate total investment return.                 
     6 Annualized.                 
See Notes to Financial Statements.                 
                                                         ANNUAL REPORT      OCTOBER 31, 2009      45 


Financial Highlights      BlackRock Floating Rate Income Trust (BGT) 
      Period            Period 
    Year  January 1,          August 30, 
    Ended  2008 to            20041 to 
        Year Ended December 31,       
    October 31,  October 31,          December 31, 
    2009  2008  2007  2006    2005    2004 
     Per Share Operating Performance                 
Net asset value, beginning of period  $ 11.24  $ 17.71  $ 19.11  $ 19.13  $ 19.21  $ 19.102 
Net investment income    0.983  1.423  2.03  1.99    1.64    0.33 
Net realized and unrealized gain (loss)  2.72  (6.62)  (1.39)  (0.06)    (0.17)    0.35 
Dividends and distributions to Preferred Shareholders from:                 
   Net investment income    (0.04)  (0.24)  (0.54)  (0.48)    (0.33)    (0.04) 
   Net realized gain          (0.01)    (0.00)4     
Net increase (decrease) from investment operations  3.66  (5.44)  0.10  1.44    1.14    0.64 
Dividends and distributions to Common Shareholders from:                 
   Net investment income    (1.19)  (1.03)  (1.14)  (1.44)    (1.22)    (0.37) 
   Net realized gain          (0.02)    (0.00)4     
   Tax return of capital    (0.42)    (0.36)           
Total dividends and distributions  (1.61)  (1.03)  (1.50)  (1.46)    (1.22)    (0.37) 
Capital charges with respect to issuance of:                 
   Common Shares                  (0.04) 
   Preferred Shares                  (0.12) 
Total capital charges                  (0.16) 
Net asset value, end of period    $ 13.29  $ 11.24  $ 17.71  $ 19.11  $ 19.13  $ 19.21 
Market price, end of period    $ 12.58  $ 9.63  $ 15.78  $ 19.27  $ 17.16  $ 18.63 
     Total Investment Return5                   
Based on net asset value    39.51%  (31.62)%6  0.98%  7.93%    6.63%    2.57%6 
Based on market price    54.14%  (34.24)%6  (10.92)%  21.31%    (1.34)%    (5.00)%6 
     Ratios to Average Net Assets Applicable to Common Shareholders                 
Total expenses7    1.96%  2.22%8  1.67%  1.75%    1.56%    1.26%8 
Total expenses after fees waived and paid indirectly7  1.68%  1.89%8  1.33%  1.43%    1.23%    0.97%8 
Total expenses after fees waived and paid indirectly and excluding                 
   interest expense7    1.24%  1.21%8  1.16%  1.19%    1.15%    0.97%8 
Net investment income7    8.92%  10.56%8  10.83%  10.38%    8.52%    5.04%8 
Dividends to Preferred Shareholders  0.38%  1.75%8  2.88%  2.51%    1.71%    0.62%8 
Net investment income to Common Shareholders  8.54%  8.81%8  7.95%  7.87%    6.81%    4.42%8 
     Supplemental Data                   
Net assets applicable to Common Shareholders, end of period (000)  $ 312,872  $ 264,590  $ 417,086  $ 449,065  $ 449,219  $ 451,126 
Preferred Shares outstanding at $25,000 liquidation preference,                 
   end of period (000)    $ 58,800  $ 58,800  $ 243,450  $ 243,450  $ 243,450  $ 243,450 
Borrowings outstanding, end of period (000)  $ 14,000  $ 123,150    $ 26,108         
Average borrowings outstanding during the period (000)  $ 53,156  $ 71,780  $ 10,524  $ 19,562  $ 10,722  $ 114 
Portfolio turnover    42%  25%  41%  50%    46%    11% 
Asset coverage per Preferred Share at $25,000 liquidation preference,                 
   end of period    $ 158,029  $ 137,505  $ 67,849  $ 73,810  $ 71,139  $ 71,330 
     1 Commencement of operations. This information includes the initial investment by BlackRock Funding, Inc.             
     2 Net asset value, beginning of period, reflects a deduction of $0.90 per share sales charge from initial offering price of $20.00 per share.         
     3 Based on average shares outstanding.                 
     4 Amount is less than $(0.01) per share.                 
     5 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.   
         Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.         
     6 Aggregate total investment return.                 
     7 Do not reflect the effect of dividends to Preferred Shareholders.                 
     8 Annualized.                   
See Notes to Financial Statements.                 
46  ANNUAL REPORT      OCTOBER 31, 2009         


Notes to Financial Statements

1. Organization and Significant Accounting Policies:

BlackRock Credit Allocation Income Trust I, Inc. (formerly BlackRock
Preferred and Corporate Income Strategies Fund, Inc.) (“PSW”), BlackRock
Credit Allocation Income Trust II, Inc. (formerly BlackRock Preferred Income
Strategies Fund, Inc.) (“PSY”) and BlackRock Enhanced Capital and
Income Fund, Inc. (“CII”) are registered as diversified, closed-end manage-
ment investment companies under the Investment Company Act of 1940,
as amended (the “1940 Act”). BlackRock Credit Allocation Income Trust III
(formerly BlackRock Preferred Opportunity Trust) (“BPP”), BlackRock Credit
Allocation Income Trust IV (formerly BlackRock Preferred and Equity
Advantage Trust) (“BTZ”) and BlackRock Floating Rate Income Trust (for-
merly BlackRock Global Floating Rate Income Trust) (“BGT”) are registered
as non-diversified, closed-end management investment companies under
the 1940 Act. PSW, PSY and CII are organized as Maryland corporations.
BPP, BTZ and BGT are organized as Delaware statutory trusts. PSW, PSY,
BPP, BTZ, CII and BGT are collectively referred to as the “Funds” or individu-
ally as the “Fund.” The Funds’ financial statements are prepared in con-
formity with accounting principles generally accepted in the United States
of America, which may require the use of management accruals and esti-
mates. Actual results may differ from these estimates. The Board of Directors
and Board of Trustees of the Funds, as applicable, are referred to throughout
this report as the “Board of Directors” or the “Board.” The Funds determine
and make available for publication the net asset value of their Common
Shares on a daily basis.

CII Reorganization: The Board and the shareholders of each of BlackRock
Enhanced Equity Yield Fund, Inc. (“EEF”), BlackRock Enhanced Equity Yield
and Premium Fund, Inc. (“ECV”) (the “Target Funds”) and CII approved the
reorganization of each Target Fund into CII (the “Reorganizations”). The Reor-
ganizations were tax-free events and were effective as of the opening for
business of the New York Stock Exchange (“NYSE”) on November 3, 2008.

Target Funds        Acquiring Fund 
EEF        CII 
ECV        CII 
Under the agreement and plan of reorganization between each Target 
Fund and CII, the shares of each Target Fund (“Target Fund Shares”) were 
exchanged for CII shares. The conversion ratios for Target Fund Shares 
were as follows:         
EEF/CII        0.80653563 
ECV/CII        0.81144752 
The net assets of CII before and after the Reorganizations and CII shares 
issued and Target Fund Shares redeemed in connection with the Reorgani- 
zations were as follows:       
  Net Assets  Net Assets    Target Funds 
Acquiring  After the  Prior to the    Shares 
Fund  Reorganizations  Reorganizations  Shares Issued  Redeemed 
CII  $591,399,963  $170,431,810  30,542,706  37,766,622 

Included in the net assets acquired by CII were the following components: 
Target  Paid-In  Realized  Net Unrealized   
Funds  Capital  Loss  Depreciation  Net Assets 
EEF  $329,483,362  $(16,478,636)  $(80,066,510)  $232,938,216 
ECV  $270,207,354  $(15,306,983)  $(66,870,434)  $188,029,937 
The following is a summary of significant accounting policies followed by 
the Funds:         

Valuation: The Funds value their bond investments on the basis of last avail-
able bid prices or current market quotations provided by dealers or pricing
services selected under the supervision of each Fund’s Board. Floating rate
loan interests are valued at the mean of the bid prices from one or more
brokers or dealers as obtained from a pricing service. In determining the
value of a particular investment, pricing services may use certain informa-
tion with respect to transactions in such investments, quotations from deal-
ers, pricing matrixes, market transactions in comparable investments, various
relationships observed in the market between investments and calculated
yield measures based on valuation technology commonly employed in the
market for such investments. Swap agreements are valued utilizing quotes
received daily by the Funds’ pricing service or through brokers, which are
derived using daily swap curves and trades of underlying securities. Invest-
ments in open-end investment companies are valued at net asset value
each business day. Short-term securities with maturities less than 60 days
may be valued at amortized cost, which approximates fair value. The Funds
value their investments in the Cash Sweep Series of BlackRock Liquidity
Series, LLC at fair value, which is ordinarily based upon their pro rata own-
ership in the net assets of the underlying fund.

Securities and other assets and liabilities denominated in foreign curren-
cies are translated into U.S. dollars using exchange rates determined as
of the close of business on the NYSE. Foreign currency exchange contracts
are valued at the mid between the bid and ask prices and are determined
as of the close of business on the NYSE. Interpolated values are derived
when the settlement date of the contract is an interim date for which quo-
tations are not available.

Equity investments traded on a recognized securities exchange or the
NASDAQ Global Market System are valued at the last reported sale price
that day or the NASDAQ official closing price, if applicable. For equity
investments traded on more than one exchange, the last reported sale
price on the exchange where the stock is primarily traded is used. Equity
investments traded on a recognized exchange for which there were no
sales on that day are valued at the last available bid (long positions) or
ask (short positions) price. If no bid or ask price is available, the prior day’s
price will be used, unless it is determined that such prior day’s price no
longer reflects the fair value of the security.

Exchange-traded options are valued at the mean between the last bid and
ask prices at the close of the options market in which the options trade. An
exchange-traded option for which there is no mean price is valued at the
last bid (long positions) or ask (short positions) price. If no bid or ask price
is available, the prior day’s price will be used, unless it is determined that
such prior day’s price no longer reflects the fair value of the option. Over-
the-counter (“OTC”) options are valued by an independent pricing service
or through brokers using a mathematical model which incorporates a

ANNUAL REPORT OCTOBER 31, 2009 47


Notes to Financial Statements (continued)

number of market data factors, such as the trades and prices of the
underlying instruments.

In the event that application of these methods of valuation results in a
price for an investment which is deemed not to be representative of the
market value of such investment or is not available, the investment will be
valued by a method approved by the Board as reflecting fair value (“Fair
Value Assets”). When determining the price for Fair Value Assets, the invest-
ment advisor and/or sub-advisor seeks to determine the price that each
Fund might reasonably expect to receive from the current sale of that asset
in an arm’s-length transaction. Fair value determinations shall be based
upon all available factors that the investment advisor and/or sub-advisor
deems relevant. The pricing of all Fair Value Assets is subsequently reported
to the Board or a committee thereof.

Generally, trading in foreign instruments is substantially completed each
day at various times prior to the close of business on the NYSE. The values
of such instruments used in computing the net assets of each Fund are
determined as of such times. Occasionally, events affecting the values of
such instruments may occur between the times at which they are deter-
mined and the close of business on the NYSE that may not be reflected in
the computation of each Fund’s net assets. If events (for example, a com-
pany announcement, market volatility or a natural disaster) occur during
such periods that are expected to materially affect the value of such instru-
ments, those instruments may be Fair Value Assets and be valued at their
fair value as determined in good faith by the Board or by the investment
advisor using a pricing service and/or procedures approved by the Board.

Foreign Currency Transactions: Foreign currency amounts are translated
into United States dollars on the following basis: (i) market value of invest-
ment securities, assets and liabilities at the current rate of exchange; and
(ii) purchases and sales of investment securities, income and expenses at
the rates of exchange prevailing on the respective dates of such transactions.

The Funds report foreign currency related transactions as components of
realized gain (loss) for financial reporting purposes, whereas such compo-
nents are treated as ordinary income for federal income tax purposes.

Capital Trusts and Trust Preferreds: These securities are typically issued by
corporations, generally in the form of interest-bearing notes with preferred
securities characteristics, or by an affiliated business trust of a corporation,
generally in the form of beneficial interests in subordinated debentures or
similarly structured securities. The securities can be structured as either
fixed or adjustable coupon securities that can have either a perpetual or
stated maturity date. Dividends can be deferred without creating an event
of default or acceleration, although maturity cannot take place unless all
cumulative payment obligations have been met. The deferral of payments
does not affect the purchase or sale of these securities in the open market.
Payments on these securities are treated as interest rather than dividends
for Federal income tax purposes. These securities can have a rating that is
slightly below that of the issuing company’s senior debt securities.

Preferred Stock: Certain Funds may invest in preferred stocks. Preferred
stock has a preference over common stock in liquidation (and generally

in receiving dividends as well) but is subordinated to the liabilities of the
issuer in all respects. As a general rule, the market value of preferred stock
with a fixed dividend rate and no conversion element varies inversely with
interest rates and perceived credit risk, while the market price of convert-
ible preferred stock generally also reflects some element of conversion
value. Because preferred stock is junior to debt securities and other obli-
gations of the issuer, deterioration in the credit quality of the issuer will
cause greater changes in the value of a preferred stock than in a more
senior debt security with similar stated yield characteristics. Unlike interest
payments on debt securities, preferred stock dividends are payable only if
declared by the issuer’s board of directors. Preferred stock also may be
subject to optional or mandatory redemption provisions.

Floating Rate Loan Interests: Certain Funds may invest in floating rate
loans, which are generally non-investment grade, made by banks, other
financial institutions, and privately and publicly offered corporations.
Floating rate loans are senior in the debt structure of a corporation.
Floating rate loans generally pay interest at rates that are periodically
determined by reference to a base lending rate plus a premium. The
base lending rates are generally (i) the lending rate offered by one or
more European banks, such as LIBOR (London InterBank Offered Rate),
(ii) the prime rate offered by one or more US banks or (iii) the certificate
of deposit rate. The Funds consider these investments to be investments
in debt securities for purposes of their investment policies.

The Funds earn and/or pay facility and other fees on floating rate loans.
Other fees earned/paid include commitment, amendment, consent and
prepayment penalty fees. Facility, commitment and amendment fees are
typically amortized over the term of the loan. Consent fees and various
other fees are recorded as income. Prepayment penalty fees are recorded
as realized gains. When a Fund buys a floating rate loan it may receive a
facility fee and when it sells a floating rate loan it may pay a facility fee. On
an ongoing basis, the Funds may receive a commitment fee based on the
undrawn portion of the underlying line of credit portion of a floating rate
loan. In certain circumstances, the Funds may receive a prepayment
penalty fee upon the prepayment of a floating rate loan by a borrower.
Other fees received by the Funds may include covenant waiver fees and
covenant modification fees.

The Funds may invest in multiple series or tranches of a loan. A different
series or tranche may have varying terms and carry different associated risks.

Floating rate loans are usually freely callable at the issuer’s option. The
Funds may invest in such loans in the form of participations in loans
(“Participations”) and assignments of all or a portion of loans from third
parties. Participations typically will result in the Funds having a contractual
relationship only with the lender, not with the borrower. The Funds will have
the right to receive payments of principal, interest and any fees to which it
is entitled only from the lender selling the Participation and only upon
receipt by the lender of the payments from the borrower.

In connection with purchasing Participations, the Funds generally will have
no right to enforce compliance by the borrower with the terms of the loan

48 ANNUAL REPORT OCTOBER 31, 2009


Notes to Financial Statements (continued)

agreement relating to the loans, nor any rights of offset against the borrower,
and the Funds may not benefit directly from any collateral supporting the
loan in which it has purchased the Participation.

As a result, the Funds will assume the credit risk of both the borrower and
the lender that is selling the Participation. The Funds’ investments in loan
participation interests involve the risk of insolvency of the financial interme-
diaries who are parties to the transactions. In the event of the insolvency of
the lender selling the Participation, the Funds may be treated as a general
creditor of the lender and may not benefit from any offset between the
lender and the borrower.

Reverse Repurchase Agreements: Certain Funds may enter into reverse
repurchase agreements with qualified third party broker-dealers. In a
reverse repurchase agreement, the Funds sell securities to a bank or bro-
ker-dealer and agree to repurchase the securities at a mutually agreed
upon date and price. Interest on the value of the reverse repurchase agree-
ments issued and outstanding is based upon competitive market rates
determined at the time of issuance. The Funds may utilize reverse repur-
chase agreements when it is anticipated that the interest income to be
earned from the investment of the proceeds of the transaction is greater
than the interest expense of the transaction. Reverse repurchase agree-
ments involve leverage risk and also the risk that the market value of
the securities that the Funds are obligated to repurchase under the agree-
ment may decline below the repurchase price. In the event the buyer of
securities under a reverse repurchase agreement files for bankruptcy or
becomes insolvent, the Funds’ use of the proceeds from the agreement
may be restricted while the other party, or its trustee or receiver, determines
whether or not to enforce the Funds’ obligation to repurchase the securities.

Defensive Positions: Each of PSW, PSY, BPP and BTZ may vary its invest-
ment policies for temporary defensive purposes during periods in which
the investment advisor believes that conditions in the securities markets or
other economic, financial or political conditions warrant. Under such condi-
tions, the Funds for temporary defensive purposes may invest up to 100%
of its total assets in, as applicable and described in each Fund’s prospec-
tus, U.S. government securities, certificates of deposit, repurchase agree-
ments that involve purchases of debt securities, bankers’ acceptances and
other bank obligations, commercial paper, money market funds and/or
other debt securities deemed by the investment advisor to be consistent
with a defensive posture, or may hold its assets in cash.

Zero-Coupon Bonds: Certain Funds may invest in zero-coupon bonds, which
are normally issued at a significant discount from face value and do not
provide for periodic interest payments. Zero-coupon bonds may experience
greater volatility in market value than similar maturity debt obligations
which provide for regular interest payments.

Segregation and Collateralization: In cases in which the 1940 Act and
the interpretive positions of the Securities and Exchange Commission
(“SEC”) require that a Fund either deliver collateral or segregate assets in
connection with certain investments (e.g., written options, foreign currency
exchange contracts, financial futures contracts and swaps), or certain bor-
rowings (e.g., reverse repurchase agreements and loan payable) each Fund

will, consistent with SEC rules and/or certain interpretive letters issued by
the SEC, segregate collateral or designate on its books and records cash or
other liquid securities having a market value at least equal to the amount
that would otherwise be required to be physically segregated. Furthermore,
based on requirements and agreements with certain exchanges and third
party broker-dealers, each party has requirements to deliver/deposit secu-
rities as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting
purposes, investment transactions are recorded on the dates the trans-
actions are entered into (the trade dates). Realized gains and losses on
investment transactions are determined on the identified cost basis. Divi-
dend income is recorded on the ex-dividend dates. Dividends from foreign
securities where the ex-dividend date may have passed are subsequently
recorded when the Funds have determined the ex-dividend date. Interest
income is recognized on the accrual basis. The Funds amortize all premiums
and discounts on debt securities. Upon notification from issuers, some of
the dividend income received from a real estate investment trust may
be redesignated as a reduction of cost of the related investment and/or
realized gain. Consent fees are compensation for agreeing to changes in
the terms of debt instruments and are included in interest income in the
Statements of Operations.

Dividends and Distributions: Dividends from net investment income are
declared and paid monthly (quarterly for CII). Distributions of capital gains
are recorded on the ex-dividend dates. If the total dividends and distribu-
tions made in any tax year exceeds net investment income and accumu-
lated realized capital gains, a portion of the total distribution may be
treated as a tax return of capital.

Income Taxes: It is each Fund’s policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies
and to distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Under the applicable
foreign tax laws, a withholding tax may be imposed on interest, dividends
and capital gains at various rates.

Each Fund files US federal and various state and local tax returns. No
income tax returns are currently under examination. The statute of limitations
on PSW’s and PSY’s US federal tax returns remains open for the four years
ended October 31, 2009. The statute of limitations on BPP’s, CII’s and BGT’s
US federal tax returns remains open for the two years ended December 31,
2007, the period ended October 31, 2008 and year ended October 31,
2009. The statute of limitations on BTZ’s US Federal tax returns remains
open for the two years ended October 31, 2009 and the period ended
October 31, 2007. The statutes of limitations on the Funds’ state and
local tax returns may remain open for an additional year depending upon
the jurisdiction.

Recent Accounting Standards: In June 2009, amended guidance was
issued by the Financial Accounting Standards Board for transfers of finan-
cial assets. This guidance is intended to improve the relevance, representa-
tional faithfulness and comparability of the information that a reporting

ANNUAL REPORT OCTOBER 31, 2009 49


Notes to Financial Statements (continued)

entity provides in its financial statements about a transfer of financial
assets; the effects of a transfer on its financial position, financial perform-
ance, and cash flows; and a transferor’s continuing involvement, if any, in
transferred financial assets. The amended guidance is effective for financial
statements for fiscal years and interim periods beginning after November 15,
2009. Earlier application is prohibited. The recognition and measurement
provisions of this guidance must be applied to transfers occurring on or
after the effective date. Additionally, the enhanced disclosure provisions of
the amended guidance should be applied to transfers that occurred both
before and after the effective date of this guidance. The impact of this
guidance on the Funds’ financial statements and disclosures, if any, is
currently being assessed.

Deferred Compensation and BlackRock Closed-End Share Equivalent
Investment Plan: Under the deferred compensation plan approved by
each Fund’s Board, non-interested Directors or Trustees (“Independent
Directors or Trustees”) may defer a portion of their annual complex-wide
compensation. Deferred amounts earn an approximate return as though
equivalent dollar amounts had been invested in common shares of other
certain BlackRock Closed-End Funds selected by the Independent Directors
or Trustees. This has approximately the same economic effect for the
Independent Directors or Trustees as if the Independent Directors or
Trustees had invested the deferred amounts directly in other certain
BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations there-
under represent general unsecured claims against the general assets of
each Fund. Each Fund may, however, elect to invest in common shares of
other certain BlackRock Closed-End Funds selected by the Independent
Directors or Trustees in order to match its deferred compensation obliga-
tions. Investments to cover each Fund’s deferred compensation liability,
if any, are included in other assets in the Statements of Assets and
Liabilities. Dividends and distributions from the BlackRock Closed-End
Fund investments under the plan are included in income-affiliated in
the Statements of Operations.

Other: Expenses directly related to a Fund are charged to that Fund. Other
operating expenses shared by several funds are pro rated among those
funds on the basis of relative net assets or other appropriate methods.
Pursuant to the terms of the custody agreement, custodian fees may be
reduced by amounts calculated on uninvested cash balances, which are
shown in the Statements of Operations as fees paid indirectly.

2. Derivative Financial Instruments:

The Funds may engage in various portfolio investment strategies both to
increase the returns of the Funds and to economically hedge, or protect,
their exposure to certain risks such as credit risk, equity risk, interest rate
risk and foreign currency exchange rate risk. Losses may arise if the value
of the contract decreases due to an unfavorable change in the price of
the underlying security or if the counterparty does not perform under the
contract. The Funds may mitigate counterparty risk through master net-
ting agreements included within an International Swaps and Derivatives
Association, Inc. (“ISDA”) Master Agreement between a Fund and each
of its counterparties. The ISDA Master Agreement allows each Fund to
offset with its counterparty certain derivative financial instruments’ pay-
ables and/or receivables with collateral held with each counterparty. The

amount of collateral moved to/from applicable counterparties is based
upon minimum transfer amounts of up to $500,000. To the extent amounts
due to the Funds from their counterparties are not fully collateralized con-
tractually or otherwise, the Funds bear the risk of loss from counterparty
non-performance. See Note 1 “Segregation and Collateralization” for addi-
tional information with respect to collateral practices.

The Funds’ maximum risk of loss from counterparty credit risk on over-
the-counter derivatives is generally the aggregate unrealized gain in excess
of any collateral pledged by the counterparty to the Funds. For over-the-
counter purchased options, the Funds bear the risk of loss in the amount
of the premiums paid and change in market value of the options should
the counterparty not perform under the contracts. Options written by the
Funds do not give rise to counterparty credit risk, as written options obli-
gate the Funds to perform and not the counterparty. Certain ISDA Master
Agreements allow counterparties to over-the-counter derivatives to termi-
nate derivative contracts prior to maturity in the event a Fund’s net assets
decline by a stated percentage or a Fund fails to meet the terms of its
ISDA Master Agreements, which would cause the Fund to accelerate pay-
ment of any net liability owed to the counterparty. Counterparty risk related
to exchange-traded financial futures contracts and options is minimal
because of the protection against defaults provided by the exchange on
which they trade.

Financial Futures Contracts: Certain Funds may purchase or sell financial
futures contracts and options on financial futures contracts to gain expo-
sure to, or economically hedge against, changes in the value of interest
rates (interest rate risk) or foreign currencies (foreign currency exchange
rate risk). Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield. Pursuant
to the contract, the Funds agree to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as margin variation and are recognized by
the Funds as unrealized gains or losses. When the contract is closed, the
Funds record a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time
it was closed. The use of financial futures contracts involves the risk of an
imperfect correlation in the movements in the price of financial futures
contracts, interest rates and the underlying assets.

Foreign Currency Exchange Contracts: Certain Funds may enter into foreign
currency exchange contracts as an economic hedge against either specific
transactions or portfolio positions (foreign currency exchange rate risk). A
foreign currency exchange contract is an agreement between two parties
to buy and sell a currency at a set exchange rate on a future date. Foreign
currency exchange contracts, when used by a Fund, help to manage the
overall exposure to the currency backing some of the investments held by
a Fund. The contract is marked-to-market daily and the change in market
value is recorded by a Fund as an unrealized gain or loss. When the con-
tract is closed, a Fund records a realized gain or loss equal to the differ-
ence between the value at the time it was opened and the value at the
time it was closed. The use of foreign currency exchange contracts involves
the risk that counterparties may not meet the terms of the agreement or
unfavorable movements in the value of a foreign currency relative to the
US dollar.

50 ANNUAL REPORT OCTOBER 31, 2009


Notes to Financial Statements (continued)

Options: Certain Funds may purchase and write call and put options to
increase or decrease their exposure to underlying instruments. A call option
gives the purchaser of the option the right (but not the obligation) to buy,
and obligates the seller to sell (when the option is exercised), the underly-
ing instrument at the exercise price at any time or at a specified time dur-
ing the option period. A put option gives the holder the right to sell and
obligates the writer to buy the underlying instrument at the exercise price
at any time or at a specified time during the option period. When a Fund
purchases (writes) an option, an amount equal to the premium paid
(received) by a Fund is reflected as an asset (liability). The amount of the
asset (liability) is subsequently marked-to-market to reflect the current
market value of the option purchased (written). When an instrument is
purchased or sold through an exercise of an option, the related premium
paid (or received) is added to (or deducted from) the basis of the instru-
ment acquired or deducted from (or added to) the proceeds of the instru-
ment sold. When an option expires (or a Fund enters into a closing
transaction), a Fund realizes a gain or loss on the option to the extent of
the premiums received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium received or paid). When a Fund
writes a call option, such option is “covered,” meaning that a Fund holds
the underlying instrument subject to being called by the option counter-
party, or cash in an amount sufficient to cover the obligation. When a Fund
writes a put option, such option is covered by cash in an amount sufficient
to cover the obligation.

In purchasing and writing options, a Fund bears the risk of an unfavorable
change in the value of the underlying instrument or the risk that a Fund
may not be able to enter into a closing transaction due to an illiquid mar-
ket. Exercise of a written option could result in a Fund purchasing or selling
a security at a price different from the current market value. The Funds may
execute transactions in both listed and OTC options.

Swaps: Certain Funds may enter into swap agreements, in which a Fund
and a counterparty agree to make periodic net payments on a specified
notional amount. These periodic payments received or made by the Funds
are recorded in the Statements of Operations as realized gains or losses,
respectively. Swaps are marked-to-market daily and changes in value are
recorded as unrealized appreciation (depreciation). When the swap is ter-
minated, the Fund will record a realized gain or loss equal to the difference
between the proceeds from (or cost of) the closing transaction and the
Fund’s basis in the contract, if any. Swap transactions involve, to varying
degrees, elements of interest rate, credit and market risk in excess of the
amounts recognized in the Statements of Assets and Liabilities. Such risks
involve the possibility that there will be no liquid market for these agree-
ments, that the counterparty to the agreements may default on its

obligation to perform or disagree as to the meaning of the contractual
terms in the agreements, and that there may be unfavorable changes in
interest rates and/or market values associated with these transactions.

Credit default swaps — Certain Funds may enter into credit default
swaps to manage its exposure to the market or certain sectors of the
market, to reduce their risk exposure to defaults of corporate and/or
sovereign issuers or to create exposure to corporate and/or sovereign
issuers to which they are not otherwise exposed (credit risk). The Funds
enter into credit default agreements to provide a measure of protection
against the default of an issuer (as buyer of protection) and/or gain
credit exposure to an issuer to which it is not otherwise exposed (as
seller of protection). The Funds may either buy or sell (write) credit
default swaps on single-name issuers (corporate or sovereign) or
traded indexes. Credit default swaps on single-name issuers are agree-
ments in which the buyer pays fixed periodic payments to the seller in
consideration for a guarantee from the seller to make a specific pay-
ment should a negative credit event take place (e.g., bankruptcy, failure
to pay, obligation accelerators, repudiation, moratorium or restructur-
ing). Credit default swaps on traded indexes are agreements in which
the buyer pays fixed periodic payments to the seller in consideration
for a guarantee from the seller to make a specific payment should a
write-down, principal or interest shortfall or default of all or individual
underlying securities included in the index occurs. As a buyer, if an
underlying credit event occurs, the Funds will either receive from the
seller an amount equal to the notional amount of the swap and deliver
the referenced security or underlying securities comprising of an index
or receive a net settlement of cash equal to the notional amount of
the swap less the recovery value of the security or underlying securi-
ties comprising of an index. As a seller (writer), if an underlying credit
event occurs the Funds will either pay the buyer an amount equal to the
notional amount of the swap and take delivery of the referenced secu-
rity or underlying securities comprising of an index or pay a net settle-
ment of cash equal to the notional amount of the swap less the recovery
value of the security or underlying securities comprising of an index.

Interest rate swaps — Certain Funds may enter into interest rate swaps
to manage duration, the yield curve or interest rate risk by economically
hedging the value of the fixed rate bonds which may decrease when
interest rates rise (interest rate risk). Interest rate swaps are agreements
in which one party pays a floating rate of interest on a notional princi-
pal amount and receives a fixed rate of interest on the same notional
principal amount for a specified period of time. In more complex swaps,
the notional principal amount may decline (or amortize) over time.

Derivatives Categorized by Risk Exposure:               
Values of Derivative Instruments as of October 31, 2009*

Asset Derivatives

  Statements of Assets             
  and Liabilities Location  PSW    PSY  BPP  BTZ  BGT 
Interest rate contracts**  Net unrealized appreciation/depreciation  $ 94,972  $ 34,845  $ 19,513  $ 982,873   
Credit contracts  Unrealized appreciation on swaps            $ 4,930 
Equity contracts  Investments at value — unaffiliated            6,110 
Total    $ 94,972  $ 34,845  $ 19,513  $ 982,873  $ 11,040 

ANNUAL REPORT OCTOBER 31, 2009 51


Notes to Financial Statements (continued)                 
Derivatives Categorized by Risk Exposure (concluded):                     
Liability Derivatives

    Statements of Assets                     
    and Liabilities Location      PSW    PSY    BPP  BTZ  CII  BGT 
Foreign currency exchange contracts  Unrealized depreciation on foreign                     
    currency exchange contracts                    $ 650,963 
Credit contracts  Unrealized depreciation on swaps    $ 168,952    $ 337,904  $ 168,952  $ 675,809    453,976 
Equity contracts**  Net unrealized appreciation/depreciation/                   
    Options written — at value                311,644  $6,377,146   
Total        $ 168,952    $ 337,904  $ 168,952  $ 987,453  $6,377,146  $1,104,939 
*  For open derivative instruments as of October 31, 2009, see the Schedules of Investments, which is also indicative of activity for the year ended October 31, 2009. 
   **  Includes cumulative appreciation/depreciation of the financial futures contracts as reported in Schedules of Investments. Only current day’s margin variation is reported within the 
  Statements of Assets and Liabilities.                       
The Effect of Derivative Instruments on the Statements of Operations
Year Ended October 31, 2009

Net Realized Gain (Loss) From

          PSW    PSY    BPP  BTZ  CII  BGT 
Interest rate contracts:                       
   Financial futures contracts    $ (3,986,014) $(23,855,057) $(11,138,251) $(22,441,107)     
   Swaps        1,958,406    13,723,072    6,758,008  17,501,084     
Foreign currency exchange contracts:                       
   Foreign currency exchange contracts        4,366    34,450    1,348  9,785    $ (2,429,013) 
Credit contracts:                       
   Swaps        246,932    1,208,482    464,385  1,004,951    (1,014,281) 
Equity contracts:                       
   Financial futures contracts                  1,193,721  $ (617,742)   
   Options***                  3,769,225  52,938,361   
Total      $ (1,776,310) $ (8,889,053) $ (3,914,510)  $ 1,037,659  $52,320,619  $ (3,443,294) 
Net Change in Unrealized Appreciation/Depreciation on

          PSW    PSY    BPP  BTZ  CII  BGT 
Interest rate contracts:                       
   Financial futures contracts    $ 584,149  $ 3,572,427  $ 1,716,894  $ 7,820,983     
   Swaps        248,398    (911,039)    (503,217)  (1,216,856)     
Foreign currency exchange contracts:                       
   Foreign currency exchange contracts        (4,287)    (32,964)    (1,062)  (7,689)    $ (6,893,115) 
Credit contracts:                       
   Swaps        (305,030)    (1,014,054)    (307,150)  (1,086,163)    371,495 
Equity contracts:                       
   Financial futures contracts                  (875,340)     
   Options***                  2,230,493  $ 5,758,405  (37,700) 
Total      $ 523,230  $ 1,614,370  $ 905,465  $ 6,865,428  $ 5,758,405  $ (6,559,320) 
 ***  Options purchased are included in the net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.   

3. Investment Advisory Agreement and Other Transactions
with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”) and Bank of America
Corporation (“BAC”) are the largest stockholders of BlackRock, Inc.
(“BlackRock”). BAC became a stockholder of BlackRock following its
acquisition of Merrill Lynch & Co., Inc. (“Merrill Lynch”) on January 1,
2009. Prior to that date, both PNC and Merrill Lynch were considered
affiliates of the Funds under the 1940 Act. Subsequent to the acquisition,
PNC remains an affiliate, but due to the restructuring of Merrill Lynch’s
ownership interest of BlackRock, BAC is not deemed to be an affiliate
under the 1940 Act.

Each Fund entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the “Manager”), the Funds’ investment advisor, an indirect,
wholly owned subsidiary of BlackRock, to provide investment advisory and
administration services.

The Manager is responsible for the management of each Fund’s portfolio
and provides the necessary personnel, facilities, equipment and certain

other services necessary to the operations of the Funds. For such services,
each Fund pays the Manager a monthly fee at the following annual rates of
each Fund’s average daily (weekly for BPP, BTZ and BGT) net assets (includ-
ing any assets attributable to borrowings or the proceeds from the issuance
of Preferred Shares) minus the sum of liabilities (other than borrowings
representing financial leverage) as follows:

PSW  0.60% 
PSY  0.60% 
BPP  0.65% 
BTZ  0.65% 
CII  0.85% 
BGT  0.75% 

The Manager has voluntarily agreed to waive a portion of the investment
advisory fees or other expenses on BGT as a percentage of its average weekly
net assets as follows: 0.20% for the first six years of the Fund’s operations
(through August 30, 2010), 0.10% in year seven (through August 30, 2011)
and 0.05% in year eight (through August 30, 2012). For the year ended
October 31, 2009, the Manager waived $706,594, which is included in
fees waived by advisor in the Statements of Operations.

52 ANNUAL REPORT OCTOBER 31, 2009


Notes to Financial Statements (continued) 
The Manager has voluntarily agreed to waive its advisory fees by the amount 
of investment advisory fees each Fund pays to the Manager indirectly through 
its investment in affiliated money market funds. These amounts are included 
in fees waived by advisor in the Statements of Operations as follows: 
PSW    $14,003 
PSY    $14,491 
BPP    $21,506 
BTZ    $95,646 
CII    $ 7,172 
BGT    $ 2,448 
The Manager has entered into a separate sub-advisory agreement with 
BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Manager, 
with respect to PSW, PSY, BPP, BTZ and BGT. BFM and BlackRock Invest- 
ment Management, LLC (“BIM”), an affiliate of the Manager, serve as sub- 
advisors for CII. The Manager pays the sub-advisors for services they pro- 
vide, a monthly fee that is a percentage of the investment advisory fees 
paid by each Fund to the Manager.     
For the year ended October 31, 2009, the Funds reimbursed the Manager for 
certain accounting services, which are included in accounting services in 
the Statements of Operations. The reimbursements were as follows: 
    Accounting 
    Services 
PSW    $ 1,913 
PSY    $ 8,364 
BPP    $ 4,214 
BTZ    $14,113 
CII    $11,054 
BGT    $ 6,510 
Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a wholly 
owned subsidiary of Merrill Lynch, for the period November 1, 2008 to 
December 31, 2008 (after which time Merrill Lynch was no longer consid- 
ered an affiliate), earned commissions on transactions of securities 
as follows:     
BTZ    $ 5,223 
CII    $ 31,748 
Certain officers and/or directors or trustees of the Funds are officers 
and/or directors of BlackRock or its affiliates. The Funds reimburse the 
Manager for compensation paid to the Funds’ Chief Compliance Officer. 
4. Investments:     
Purchases and sales of investments, including paydowns, excluding short- 
term securities and US government securities, for the year ended October 31, 
2009 were as follows:     
  Purchases  Sales 
PSW  $ 32,909,061  $ 103,719,933 
PSY  $ 73,975,856  $ 375,248,172 
BPP  $ 34,574,885  $ 194,230,481 
BTZ  $ 186,459,982  $ 541,219,389 
CII  $ 747,473,597  $ 737,185,021 
BGT  $ 157,239,797  $ 250,200,520 
For the year ended October 31, 2009, purchases and sales of US govern- 
ment securities were as follows:     

    Purchases    Sales 
BTZ    $ 494,173  $ 482,813 
Transactions in options written for the year ended October 31, 2009 for 
BTZ and CII were as follows:           
                   BTZ    CII 
         Premiums      Premiums 
Call Options Written  Contracts  Received Contracts    Received 
Outstanding options written,           
   beginning of year  1,150  $ 4,556,037  1,225 $ 3,449,258 
Options written  14,750  32,565,145  696,648    122,618,221 
Options exercised      (247,949)    (19,106,119) 
Options expired  (1,905)  (4,347,543) (182,483)    (21,102,291) 
Options closed  (13,595)  (31,945,600) (150,354)    (76,665,610) 
Outstanding options written,           
end of year  400  $828,039  117,087    $9,193,459 
        CII 
          Premiums 
Put Options Written      Contracts    Received 
Outstanding options written, beginning of year         
Options written           1,350 $  80,744 
Options exercised      (1,350)    (80,744) 
Outstanding options written, end of year         
5. Commitments:           
BGT invests in floating rate loans. In connection with these investments, 
the Fund may, with its Manager, also enter into unfunded corporate loans 
(“commitments”). Commitments may obligate the Fund to furnish temporary 
financing to a borrower until permanent financing can be arranged. In con- 
nection with these commitments, the Fund earns a commitment fee, typi- 
cally set as a percentage of the commitment amount. Such fee income, 
which is classified in the Statements of Operations as facility and other 
fees, is recognized ratably over the commitment period. As of October 31, 
2009, the Fund had the following unfunded loan commitments: 
          Value of 
    Underlying    Underlying 
    Commitment    Loan 
    (000)    (000) 
Delphi Acquisition Holding IBV    $368    $306 
NVT Networks LLC Exit Term Loan    $ 50    $ 51 
Smurfit-Stone Container Enterprises, Inc.,         
   U.S. Term Loan Debtor in Possession  $910    $900 
6. Concentration, Market and Credit Risk:       
PSY, BPP and BTZ invest a significant portion of their assets in securities 
in the financials sector and BGT invests a significant portion of its assets 
in securities in the media sector. Please see the Schedules of Investments 
for these securities. Changes in economic conditions affecting the finan- 
cials and media sectors would have a greater impact on the respective 
Funds and could affect the value, income and/or liquidity of positions in 
such securities.           
In the normal course of business, the Funds invest in securities and enter 
into transactions where risks exist due to fluctuations in the market (market 
risk) or failure of the issuer of a security to meet all its obligations (credit 
risk). The value of securities held by the Funds may decline in response to 

ANNUAL REPORT OCTOBER 31, 2009 53


Notes to Financial Statements (continued)

certain events, including those directly involving the issuers whose securi-
ties are owned by the Funds; conditions affecting the general economy;
overall market changes; local, regional or global political, social or eco-
nomic instability; and currency and interest rate and price fluctuations.
Similar to credit risk, the Funds may be exposed to counterparty risk, or
the risk that an entity with which the Funds have unsettled or open trans-
actions may default. Financial assets, which potentially expose the Funds
to credit and counterparty risks, consist principally of investments and cash
due from counterparties. The extent of the Funds’ exposure to credit and
counterparty risks with respect to those financial assets is approximated by
their value recorded in the Funds’ Statements of Assets and Liabilities, less
any collateral held by the Funds.

7. Capital Share Transactions:

PSW, PSY and CII are authorized to issue 200 million of $0.10 par value
shares, all of which initially were classified as Common Shares. The Boards
of PSW and PSY are authorized to classify and reclassify any unissued
shares. In this regard, the Boards of PSW and PSY have reclassified 5,460
and 22,000 shares, respectively, of unissued shares as Preferred Shares.
There are an unlimited number of $0.001 par value shares authorized for
BPP, BTZ and BGT.

Common Shares       
At October 31, 2009, the shares owned by an affiliate of the Manager of 
the Funds were as follows:       
      Shares 
PSW      7,656 
PSY      7,927 
BTZ      4,817 
CII      23,362 
BGT      8,239 
Shares issued and outstanding during the years ended October 31, 2009 
and October 31, 2008 for PSW and PSY and the year ended October 31, 
2009, the period January 1, 2008 to October 31, 2008 and the year ended 
December 31, 2007 for BPP, CII and BGT increased by the following 
amounts as a result of dividend reinvestment:     
  October 31,  October 31,  December 31, 
  2009  2008  2007 
PSW  20,060    N/A 
PSY  200,878    N/A 
BPP  76,154  5,794  30,981 
CII  221,870     
BGT      42,574 
Shares issued and outstanding remained constant for BTZ for the years 
ended October 31, 2009 and October 31, 2008.     

For the year ended October 31, 2009, shares issued and outstanding for
CII increased 30,542,706 as a result of a reorganization as discussed in
Note 1 “CII Reorganization”.

Preferred Shares

The Preferred Shares are redeemable at the option of each Fund, in whole
or in part, on any dividend payment date at $25,000 per share plus any
accumulated or unpaid dividends whether or not declared. The Preferred
Shares are also subject to mandatory redemption at their liquidation pref-

erence plus any accumulated or unpaid dividends, whether or not declared,
if certain requirements relating to the composition of the assets and liabili-
ties of the Fund, as set forth in the Fund’s Statement of Preferences/Articles
Supplementary (“Governing Instrument”), as applicable, are not satisfied.

From time to time in the future, the Funds that have issued Preferred
Shares may effect repurchases of such shares at prices below their liquida-
tion preferences as agreed upon by the Funds and seller. The Funds also
may redeem such shares from time to time as provided in the applicable
Governing Instrument. The Funds intend to effect such redemptions and/or
repurchases to the extent necessary to maintain applicable asset coverage
requirements or for such other reasons as the Board may determine.

The holders of Preferred Shares have voting rights equal to the holders of
Common Shares (one vote per share) and will vote together with holders
of Common Shares (one vote per share) as a single class. However, holders
of Preferred Shares, voting as a separate class, are also entitled to elect
two Directors/Trustees for each Fund. In addition, the 1940 Act requires
that along with approval by shareholders that might otherwise be required,
the approval of the holders of a majority of any outstanding Preferred
Shares, voting separately as a class would be required to (a) adopt any
plan of reorganization that would adversely affect the Preferred Shares,
(b) change a Fund’s subclassification as a closed-end investment com-
pany or change its fundamental investment restrictions or (c) change its
business so as to cease to be an investment company.

PSW, PSY, BPP, BTZ and BGT had the following series of Preferred Shares 
outstanding, effective yields and reset frequency as of October 31, 2009: 
        Reset 
    Preferred  Effective  Frequency 
  Series  Shares       Yield  Days 
PSW  M7  805       1.48%  7 
  T7  805       1.48%  7 
PSY  M7  861       1.48%  7 
  T7  861       1.48%  7 
  W7  861       1.47%  7 
  TH7  861       1.47%  7 
  F7  861       1.48%  7 
  W28  1,228       1.49%  28 
  TH28  1,228       1.49%  28 
BPP  T7  939       0.24%  7 
  W7  939       0.24%  7 
  R7  939       0.26%  7 
BTZ  T7  2,310       1.48%  7 
  W7  2,310       1.47%  7 
  R7  2,310       1.47%  7 
  F7  2,310       1.48%  7 
BGT  T7  784       1.48%  7 
  W7  784       1.47%  7 
  R7  784       1.47%  7 

Dividends on seven-day and 28-day Preferred Shares are cumulative at a
rate that is reset every seven or 28 days, respectively, based on the results
of an auction. If the Preferred Shares fail to clear the auction on an auction
date, the affected Fund is required to pay the maximum applicable rate on
the Preferred Shares to holders of such shares for successive dividend
periods until such time as the shares are successfully auctioned. The maxi-
mum applicable rate on Preferred Shares are as follows: for PSW, PSY and
BGT, the higher of 125% times or 1.25% plus the Telerate/BBA LIBOR rate;
for BPP 150% of the interest equivalent of the 30-day commercial paper
rate and for BTZ, the higher of 150% times or 1.25% plus the Telerate/BBA

54 ANNUAL REPORT OCTOBER 31, 2009


Notes to Financial Statements (continued) 
LIBOR rate. The low, high and average dividend rates for the year ended 
October 31, 2009, were as follows:       
  Series  Low  High  Average 
PSW  M7  1.48%  3.39%  1.62% 
  T7  1.48%  3.34%  1.63% 
PSY  M7  1.48%  3.39%  1.63% 
  T7  1.48%  3.34%  1.63% 
  W7  1.47%  3.27%  1.63% 
  TH7  1.47%  2.89%  1.62% 
  F7  1.48%  2.57%  1.62% 
  W28  1.49%  4.53%  1.70% 
  TH28  1.49%  5.76%  1.84% 
BPP  T7  0.23%  4.21%  0.64% 
  W7  0.24%  4.07%  0.60% 
  R7  0.20%  4.09%  0.59% 
BTZ  T7  1.48%  3.34%  1.63% 
  W7  1.47%  3.27%  1.66% 
  R7  1.47%  2.89%  1.65% 
  F7  1.48%  2.57%  1.64% 
BGT  T7  1.48%  3.34%  1.62% 
  W7  1.47%  3.27%  1.66% 
  R7  1.47%  2.89%  1.64% 

Since February 13, 2008, the Preferred Shares of the Funds failed to clear
any of their auctions. As a result, the Preferred Shares dividend rates were
reset to the maximum applicable rate, which ranged from 0.20% to 5.76%.
A failed auction is not an event of default for the Funds but it has a nega-
tive impact on the liquidity of Preferred Shares. A failed auction occurs
when there are more sellers of a fund’s auction rate preferred shares than
buyers. It is impossible to predict how long this imbalance will last. A suc-
cessful auction for the Funds’ Preferred Shares may not occur for some time,
if ever, and even if liquidity does resume, Preferred Shareholders may not
have the ability to sell the Preferred Shares at their liquidation preference.

The Funds may not declare dividends or make other distributions on
Common Shares or purchase any such shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to the
outstanding Preferred Shares is less than 200%.

Prior to December 22, 2008, the Funds paid commissions to certain
broker-dealers at the end of each auction at an annual rate of 0.25%,
calculated on the aggregate principal amount. On December 22, 2008,
commissions paid to broker-dealers on Preferred Shares that experience a
failed auction were reduced to 0.15% on the aggregate principal amount.
Subsequently, certain broker-dealers have individually agreed to further
reduce commissions for failed auctions. The Funds will continue to pay
commissions of 0.25% on the aggregate principal amount of all shares
that successfully clear their auctions. MLPF&S earned commissions for the
period November 1, 2008 to December 31, 2008 (after which time Merrill
Lynch was no longer considered an affiliate) as follows:

  Commissions 
PSW  $14,200 
PSY  $42,997 
BPP  $13,434 
BTZ  $41,221 
BGT  $ 683 
During the year ended October 31, 2009 the Funds announced the follow- 
ing redemptions, as of the date indicated, of Preferred Shares at a price of 
$25,000 per share plus any accrued and unpaid dividends through the 
redemption dates:   

March 26, 2009         
    Redemption  Shares  Aggregate 
  Series  Date  Redeemed  Principal 
PSY  M7  4/14/09  107  $2,675,000 
  T7  4/15/09  107  $2,675,000 
  W7  4/16/09  107  $2,675,000 
  TH7  4/13/09  107  $2,675,000 
  F7  4/13/09  107  $2,675,000 
  W28  5/07/09  153  $3,825,000 
  TH28  4/24/09  153  $3,825,000 
BPP  T7  4/15/09  267  $6,675,000 
  W7  4/16/09  267  $6,675,000 
  R7  4/17/09  267  $6,675,000 
February 24, 2009         
    Redemption  Shares  Aggregate 
  Series  Date  Redeemed  Principal 
PSW  M7  3/17/09  160  $ 4,000,000 
  T7  3/18/09  160  $ 4,000,000 
PSY  M7  3/17/09  203  $ 5,075,000 
  T7  3/18/09  203  $ 5,075,000 
  W7  3/19/09  203  $ 5,075,000 
  TH7  3/13/09  203  $ 5,075,000 
  F7  3/16/09  203  $ 5,075,000 
  W28  4/09/09  292  $ 7,300,000 
  TH28  3/27/09  292  $ 7,300,000 
November 25, 2008         
    Redemption  Shares  Aggregate 
  Series  Date  Redeemed  Principal 
PSW  M7  12/16/08  400  $10,000,000 
  T7  12/17/08  400  $10,000,000 
PSY  M7  12/16/08  229  $ 5,725,000 
  T7  12/17/08  229  $ 5,725,000 
  W7  12/18/08  229  $ 5,725,000 
  TH7  12/12/08  229  $ 5,725,000 
  F7  12/15/08  229  $ 5,725,000 
  W28  12/18/08  327  $ 8,175,000 
  TH28  1/02/09  327  $ 8,175,000 
BPP  T7  12/17/08  266  $ 6,650,000 
  W7  12/18/08  266  $ 6,650,000 
  R7  12/19/08  266  $ 6,650,000 
During the period ended October 31, 2008, the Funds announced the fol- 
lowing redemptions as of May 19, 2008 of Preferred Shares at a price of 
$25,000 per share plus any accrued and unpaid dividends through the 
redemption date:         
    Redemption  Shares  Aggregate 
  Series  Date  Redeemed  Principal 
PSW  M7  6/10/2008  1,365  $34,125,000 
  T7  6/11/2008  1,365  $34,125,000 
PSY  M7  6/10/2008  1,400  $35,000,000 
  T7  6/11/2008  1,400  $35,000,000 
  W7  6/05/2008  1,400  $35,000,000 
  TH7  6/06/2008  1,400  $35,000,000 
  F7  6/09/2008  1,400  $35,000,000 
  W28  6/05/2008  2,000  $50,000,000 
  TH28  6/20/2008  2,000  $50,000,000 
BPP  T7  6/11/2008  1,472  $36,800,000 
  W7  6/12/2008  1,472  $36,800,000 
  R7  6/13/2008  1,472  $36,800,000 
BTZ  T7  6/11/2008  2,310  $57,750,000 
  W7  6/12/2008  2,310  $57,750,000 
  R7  6/13/2008  2,310  $57,750,000 
  F7  6/09/2008  2,310  $57,750,000 
BGT  T7  6/11/2008  2,462  $61,550,000 
  W7  6/12/2008  2,462  $61,550,000 
  R7  6/13/2008  2,462  $61,550,000 

ANNUAL REPORT OCTOBER 31, 2009 55


Notes to Financial Statements (continued)

All of the Funds, except BGT, financed the Preferred Share redemptions
with cash received from reverse repurchase agreements. BGT financed the
Preferred Share redemptions with cash received from a loan.

Preferred Shares issued and outstanding for the year ended December 31,
2007 for BGT and BPP remained constant.

8. Borrowings:

On May 16, 2008, BGT renewed its revolving credit and security Agreement
(“Citicorp Agreement”) pursuant to a commercial paper asset securitization
program with Citicorp North America, Inc. (“Citicorp”), as Agent, certain sec
ondary backstop lenders and certain asset securitization conduits, as
lenders (the “Lenders”). The agreement was renewed for one year and at
the time of renewal had a maximum limit of $190 million.

Under the Citicorp Agreement, the conduits funded advances to the Fund
through the issuance of highly rated commercial paper. The Fund had
granted a security interest in substantially all of its assets to, and in favor
of, the Lenders as security for its obligations to the Lenders. The interest
rate on the Fund’s borrowings was based on the interest rate carried by
commercial paper plus a program fee. Effective December 5, 2008, the
Fund renegotiated certain terms of the Citicorp Agreement and reduced
the commitment amount to $134 million.

On March 5, 2009, BGT terminated its revolving credit agreement with
Citicorp and entered into a senior committed secured, 364-day revolving

line of credit and a separate security agreement with State Street Bank
and Trust Company (“SSB”). The SSB line of credit provides the Fund with
a maximum commitment of $134 million. The Fund has granted a security
interest in substantially all of its assets to SSB.

Advances are made by SSB to BGT at BGT’s option at either (a) the higher
of 1.00% above the Fed Effective Rate or 1.00% above the Overnight LIBOR
Rate and (b) 1.00% above 7-day, 30-day, or 60-day LIBOR Rate. In addi-
tion, BGT pays a facility fee and a commitment fee based upon SSB’s total
commitment to BGT. The fees associated with each of the agreements are
included in the Statements of Operations as borrowing costs. Advances to
BGT as of October 31, 2009 are shown in the Statements of Assets and
Liabilities as loan payable. For the year ended October 31, 2009, the daily
weighted average interest rate was 2.15%.

Under the Investment Company Act of 1940, BGT may not declare divi-
dends or make other distributions on Common Shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to the
outstanding indebtedness is less than 300%.

For the year ended October 31, 2009, the daily weighted average interest
rates for Funds with reverse repurchase agreements were as follows:

PSW  1.93% 
PSY  1.45% 
BPP  2.38% 
BTZ  2.33% 

9. Income Tax Information:

Reclassifications: Accounting principles generally accepted in the United States of America require that certain components of net assets be adjusted to
reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The
following permanent differences as of October 31, 2009 attributable to accounting for swap agreements, the classification of investments, foreign currency
transactions and non-deductible expenses were reclassified to the following accounts:

    PSW  PSY  BPP  BTZ  CII  BGT 
Paid-in capital      $ (3,858)      $ (7,879)   
Undistributed (distributions in excess of) net investment income  $ (254,371)  $ (1,436,139)  $ (3,866,202)  $ (1,415,793)  $ 7,879  $ (3,185,823) 
Accumulated net realized loss    $ 254,371  $ 1,439,997  $ 3,866,202  $ 1,415,793    $ 3,185,823 
The tax character of distributions paid during the periods ended October 31, 2009 and 2008 for all Funds and December 31, 2007 for BPP, CII and BGT 
were as follows:               
    PSW  PSY  BPP  BTZ  CII  BGT 
Ordinary income               
10/31/2009    $ 9,272,893  $ 48,928,499  $ 18,039,320  $ 52,227,765  $ 52,962,484  $ 28,934,349 
10/31/2008    $ 17,443,001  $ 66,768,898  $ 20,860,160  $ 63,957,649  $ 7,846,070  $ 29,676,182 
12/31/2007        $ 40,678,314    $ 5,911,539  $ 39,557,202 
Long-term capital gains               
10/31/2009            $ 10,276,199   
10/31/2008            $ 2,596,353   
12/31/2007        $ 400,000    $ 23,835,961   
Tax return of capital               
10/31/2009    $ 1,345,345  $ 116,310  $ 4,250,036  $ 24,678,883  $ 19,660,314  $ 9,994,857 
10/31/2008    $ 545,246  $ 9,002,427  $ 5,480,035  $ 43,518,226  $ 7,292,188   
12/31/2007        $ 2,820,986      $ 8,473,282 
Total distributions               
10/31/2009    $ 10,618,238  $ 49,044,809  $ 22,289,356  $ 76,906,648  $ 82,898,997  $ 38,929,206 
10/31/2008    $ 17,988,247  $ 75,771,325  $ 26,340,195  $ 107,475,875  $ 17,734,611  $ 29,676,182 
12/31/2007        $ 43,899,300    $ 29,747,500  $ 48,030,484 
56  ANNUAL REPORT      OCTOBER 31, 2009     


Notes to Financial Statements (concluded)           
As of October 31, 2009, the tax components of accumulated net losses were as follows:         
    PSW  PSY  BPP  BTZ  CII  BGT 
Capital loss carryforwards    $(127,842,748)  $(447,757,170)  $(185,378,942)  $(387,036,152)  $(106,212,859)  $ (73,270,778) 
Net unrealized losses*    (13,773,056)  (85,650,823)  (34,137,626)  (95,975,896)  (83,448,589)  (41,417,420) 
Total    $(141,615,804)  $(533,407,993)  $(219,516,568)  $(483,012,048)  $(189,661,448)  $(114,688,198) 
* The differences between book-basis and tax-basis net unrealized losses were attributable primarily to the tax deferral of losses on wash sales, the amortization methods for premi- 
       ums and discounts on fixed income securities, the accrual of income on securities in default, the realization for tax purposes of unrealized gains/(losses) on certain futures and 
foreign currency contracts, the timing and recognition of partnership income, the accounting for swap agreements, the deferral of compensation to trustees and directors, the classi- 
       fication of investments and other temporary differences.             
As of October 31, 2009, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates: 
Expires October 31,    PSW  PSY  BPP  BTZ  CII  BGT 
2011    $ 1,276,621           
2012    10,243,141  $ 62,733,648         
2013    5,058,900  17,911,331         
2014    8,481,628  12,145,117         
2015    6,724,694  19,582,978  $ 18,184,893  $ 49,741,712    $ 3,268,804 
2016    40,232,230  140,413,242  58,197,929  113,355,213  $ 26,706,998  24,616,531 
2017    55,825,534  194,970,854  108,996,120  223,939,227  79,505,861  45,385,443 
Total    $ 127,842,748  $ 447,757,170  $ 185,378,942  $ 387,036,152  $ 106,212,859  $ 73,270,778 
10. Subsequent Events:               
Management’s evaluation of the impact of all subsequent events on the           
Funds’ financial statements was completed through December 28, 2009,           
the date the financial statements were issued.               
The Funds paid net investment income dividends on November 30, 2009           
to shareholders of record on November 13, 2009 as follows:             
    Common           
    Dividend           
    Per Share           
PSW    $0.0600           
PSY    $0.0750           
BPP    $0.0725           
BTZ    $0.1000           
BGT    $0.0675           
The dividends declared on Preferred Shares for the period November 1,           
2009 through November 30, 2009 were as follows:             
    Dividends           
  Series  Declared           
PSW  M7  $23,880           
  T7  $23,790           
PSY  M7  $25,541           
  T7  $25,445           
  W7  $25,452           
  TH7  $25,446           
  F7  $25,573           
  W28  $36,859           
  TH28  $36,888           
BPP  T7  $ 4,435           
  W7  $ 4,317           
  R7  $ 4,431           
BTZ  T7  $68,268           
  W7  $68,285           
  R7  $68,497           
  F7  $68,228           
BGT  T7  $23,175           
  W7  $23,172           
  R7  $23,175           
ANNUAL REPORT        OCTOBER 31, 2009  57 


Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees/Directors of:
BlackRock Credit Allocation Income Trust I, Inc.
BlackRock Credit Allocation Income Trust II, Inc.
BlackRock Credit Allocation Income Trust III
BlackRock Credit Allocation Income Trust IV
Blackrock Enhanced Capital and Income Fund, Inc., and
BlackRock Floating Rate Income Trust
(Collectively the “Trusts”):

We have audited the accompanying statements of assets and liabilities
of BlackRock Credit Allocation Income Trust I, Inc. (formerly BlackRock
Preferred and Corporate Income Strategies Fund, Inc.) and BlackRock
Credit Allocation Income Trust II, Inc. (formerly BlackRock Preferred Income
Strategies Fund, Inc.), including the schedules of investments, as of
October 31, 2009, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of
the four years in the period then ended. We have also audited the accom-
panying statement of assets and liabilities of BlackRock Credit Allocation
Income Trust III (formerly BlackRock Preferred Opportunity Trust), including
the schedule of investments, as of October 31, 2009, and the related
statement of operations for the year then ended, the statements of
changes in net assets for the year then ended, for the period January 1,
2008 to October 31, 2008, and for the year ended December 31, 2007,
and the financial highlights for the year ended October 31, 2009, for the
period January 1, 2008 to October 31, 2008, and for each of the four
years in the period ended December 31, 2007. We have also audited the
accompanying statement of assets and liabilities of BlackRock Credit
Allocation Income Trust IV (formerly BlackRock Preferred and Equity
Advantage Trust), including the schedule of investments, as of October 31,
2009, and the related statements of operations for the year then ended,
the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the two years
in the period ended October 31, 2009, and for the period December 27,
2006 (commencement of operations) to October 31, 2007. We have also
audited the accompanying statement of assets and liabilities of BlackRock
Enhanced Capital and Income Fund, Inc., including the schedule of invest-
ments, as of October 31, 2009, and the related statement of operations
for the year then ended, the statements of changes in net assets for the
year then ended, for the period January 1, 2008 to October 31, 2008, and
for the year ended December 31, 2007, and the financial highlights for the
year ended October 31, 2009, for the period January 1, 2008 to October
31, 2008, for each of the three years in the period ended December 31,
2007, and for the period April 30, 2004 (commencement of operations) to
December 31, 2004. We have also audited the accompanying statements
of assets and liabilities of BlackRock Floating Rate Income Trust (formerly
BlackRock Global Floating Rate Income Trust), including the schedule of
investments, as of October 31, 2009, and the related statement of opera-
tions and cash flows for the year then ended, the statements of changes
in net assets for the year then ended, for the period January 1, 2008 to
October 31, 2008, and for the year ended December 31, 2007, and the
financial highlights for the year ended October 31, 2009, for the period
January 1, 2008 to October 31, 2008, for each of the three years in the

period ended December 31, 2007, and for the period August 30, 2004
(commencement of operations) to December 31, 2004. These financial
statements and financial highlights are the responsibility of the Trusts’ man-
agement. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial high-
lights of BlackRock Credit Allocation Income Trust I, Inc. and BlackRock
Credit Allocation Income Trust II, Inc., for the year ended October 31, 2005
were audited by other auditors whose report, dated December 9, 2005,
expressed an unqualified opinion on those financial highlights.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial highlights are free of
material misstatement. The Trusts are not required to have, nor were we
engaged to perform an audit of their internal control over financial report-
ing. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Trusts’ internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and signifi-
cant estimates made by management, as well as evaluating the overall
financial statement presentation. Our procedures include confirmation of
the securities owned as of October 31, 2009, by correspondence with the
custodian and financial intermediaries; where replies were not received
from financial intermediaries, we performed other auditing procedures. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
BlackRock Credit Allocation Income Trust I, Inc. and BlackRock Credit
Allocation Income Trust II, Inc., the results of their operations for the year
then ended, the changes in their net assets for each of the two years in
the period then ended, and the financial highlights for each of the four
years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America. Additionally, in our
opinion, the financial statements and financial highlights referred to above
present fairly, in all material respects, the financial position of BlackRock
Credit Allocation Income Trust III, the results of its operations for the year
then ended, the changes in its net assets for the year then ended,
for the period January 1, 2008 to October 31, 2008, and for the year
ended December 31, 2007, and the financial highlights for the year ended
October 31, 2009, for the period January 1, 2008 to October 31, 2008,
and for each of the four years in the period ended December 31, 2007,
in conformity with accounting principles generally accepted in the United
States of America. Additionally, in our opinion, the financial statements and
financial highlights referred to above present fairly, in all material respects,
the financial position of BlackRock Credit Allocation Income Trust IV, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial high-
lights for each of the two years in the period then ended, and for the period

58 ANNUAL REPORT OCTOBER 31, 2009


Report of Independent Registered Public Accounting Firm (concluded)

December 27, 2006 (commencement of operations) to October 31, 2007,
in conformity with accounting principles generally accepted in the United
States of America. Additionally, in our opinion, the financial statements and
financial highlights referred to above present fairly, in all material respects,
the financial position of BlackRock Enhanced Capital and Income Fund,
Inc., the results of its operations for the year then ended, the changes in
its net assets for the year then ended, for the period January 1, 2008 to
October 31, 2008, and for the year ended December 31, 2007, and the
financial highlights for the year ended October 31, 2009, for the period
January 1, 2008 to October 31, 2008, for each of the three years in the
period ended December 31, 2007, and for the period April 30, 2004
(commencement of operations) to December 31, 2004, in conformity with
accounting principles generally accepted in the United States of America.
Additionally, in our opinion, the financial statements and financial highlights

referred to above present fairly, in all material respects, the financial position
of BlackRock Floating Rate Income Trust, the results of its operations and
its cash flows for the year then ended, the changes in its net assets for the
year then ended, for the period January 1, 2008 to October 31, 2008, and
for the year ended December 31, 2007, and the financial highlights for the
year ended October 31, 2009, for the period January 1, 2008 to October
31, 2008, for each of the three years in the period ended December 31,
2007, and for the period August 30, 2004 (commencement of operations)
to December 31, 2004, in conformity with accounting principles generally
accepted in the United States of America.

Deloitte & Touche LLP
Princeton, New Jersey
December 28, 2009

     Important Tax Information (Unaudited)               
The following information is provided with respect to the ordinary income distributions paid by the Funds for the taxable year ended     
October 31, 2009:               
  PSW  PSY  BPP  BTZ  CII  BGT   
Qualified Dividend Income for Individuals*               
Months Paid:               
November – December 2008†  28.71%  32.86%  43.81%  38.14%  27.56%     
January – October 2009  28.16%  23.53%  55.05%  63.22%  33.97%     
Dividends Received Deductions for Corporations*               
Months Paid:               
November – December 2008†  14.15%  17.08%  13.42%  2.49%  26.00%     
January – October 2009  9.43%  11.78%  17.49%  37.17%  31.13%     
Interest-Related Dividends and Qualified Short-Term Capital Gains               
for Non-U.S. Residents**               
Months Paid:               
November – December 2008†  51.30%  55.03%  41.66%  29.12%    46.19%   
January – October 2009  61.37%  63.14%  53.10%  54.52%  100%  100%   
   * The Funds hereby designate the percentage indicated above or the maximum amount allowable by law.           
 ** Represents the portion of taxable ordinary income dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.     
   † Includes dividend paid on January 9, 2009 to PSW, PSY, BPP, BTZ, and BGT Common Shareholders.           
Additionally, of the CII distributions paid between March and September 2009, 16.53% represented long-term capital gains.       
                                                         ANNUAL REPORT        OCTOBER 31, 2009      59 


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

The Board of Directors or the Board of Trustees, as the case may be, (each,
a “Board” and, collectively, the “Boards,” and the members of which are
referred to as “Board Members”) of each of BlackRock Credit Allocation
Income Trust I, Inc. (formerly BlackRock Preferred and Corporate Income
Strategies Fund, Inc.) (“PSW”), BlackRock Credit Allocation Income Trust
II, Inc. (formerly BlackRock Preferred Income Strategies Fund, Inc.) (“PSY”),
BlackRock Credit Allocation Income Trust III (formerly BlackRock Preferred
Opportunity Trust) (“BPP”), BlackRock Credit Allocation Income Trust IV (for-
merly BlackRock Preferred and Equity Advantage Trust) (“BTZ”), BlackRock
Enhanced Capital and Income Fund, Inc. (“CII”) and BlackRock Floating
Rate Income Trust (“BGT,” and together with PSW, PSY, BPP, BTZ, and CII,
each a “Fund” and, collectively, the “Funds”) met on April 14, 2009,
May 28 – 29, 2009 and August 25 – 26, 2009 to consider the approval
of its respective Fund’s investment advisory agreement (each, an “Advisory
Agreement”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s
investment advisor. The Board of each of PSW, PSY, BPP, BTZ, CII and BGT
also considered the approval of a sub-advisory agreement (each, a “Sub-
Advisory Agreement”) among its respective Fund, the Manager and one
or both of the following sub-advisors, as the case may be: BlackRock
Financial Management, Inc.; and BlackRock Investment Management, LLC
(each, a “Sub-Advisor”). The Manager and the Sub-Advisors are referred
to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory
Agreements are referred to herein as the “Agreements.” Unless otherwise
indicated, references to actions taken by the “Board” or the “Boards” shall
mean each Board acting independently with respect to its Fund.

Activities and Composition of the Boards

Each Board consists of twelve individuals, ten of whom are not “interested
persons” of the Funds as defined in the Investment Company Act of 1940,
as amended (the “1940 Act”) (the “Independent Board Members”). The
Board Members of each Fund are responsible for the oversight of the oper-
ations of such Fund and perform the various duties imposed on the direc-
tors of investment companies by the 1940 Act. The Independent Board
Members have retained independent legal counsel to assist them in con-
nection with their duties. The Chairman of each Board is an Independent
Board Member. Each Board has established five standing committees: an
Audit Committee, a Governance and Nominating Committee, a Compliance
Committee, a Performance Oversight Committee and an Executive
Committee, each of which is composed of Independent Board Members
(except for the Executive Committee, which has one interested Board
Member) and is chaired by an Independent Board Member. In addition,
the Boards of certain of the Funds have established an Ad Hoc Committee
on Auction Market Preferred Shares.

The Agreements

Pursuant to the 1940 Act, each Board is required to consider the continuation
of the Agreements on an annual basis. In connection with this process, each
Board assessed, among other things, the nature, scope and quality of the
services provided to its respective Fund by the personnel of BlackRock and its
affiliates, including investment management, administrative and shareholder
services, oversight of fund accounting and custody, marketing services and
assistance in meeting applicable legal and regulatory requirements.

Throughout the year, the Boards, acting directly and through their commit-
tees, consider at each of their meetings factors that are relevant to their
annual consideration of the renewal of the Agreements, including the
services and support provided by BlackRock to the Funds and their share-
holders. Among the matters the Boards considered were: (a) investment
performance for one-, three- and five-year periods, as applicable, against
peer funds, and applicable benchmarks, if any, as well as senior manage-
ment and portfolio managers’ analysis of the reasons for any out perform-
ance or underperformance against its peers; (b) fees, including advisory
and other amounts paid to BlackRock and its affiliates by the Funds for
services such as call center and fund accounting; (c) the Funds’ operating
expenses; (d) the resources devoted to, and compliance reports relating to,
the Funds’ investment objectives, policies and restrictions; (e) the Funds’
compliance with their Code of Ethics and compliance policies and proce-
dures; (f) the nature, cost and character of non-investment management
services provided by BlackRock and its affiliates; (g) BlackRock’s and other
service providers’ internal controls; (h) BlackRock’s implementation of the
proxy voting policies approved by the Board; (i) execution quality of port-
folio transactions and, as applicable, the use of brokerage commissions;
(j) BlackRock’s implementation of the Funds’ valuation and liquidity proce-
dures; and (k) periodic updates on BlackRock’s business.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 14, 2009 meeting, each Board
requested and received materials specifically relating to the Agreements.
Each Board is engaged in an ongoing process with BlackRock to continu-
ously review the nature and scope of the information provided to better
assist their deliberations. The materials provided in connection with the
April meeting included (a) information independently compiled and pre-
pared by Lipper, Inc. (“Lipper”) on Fund fees and expenses, and the invest-
ment performance of each Fund as compared with a peer group of funds
as determined by Lipper and, where applicable, a customized peer group
selected by BlackRock (collectively, “Peers”); (b) information on the profit-
ability of the Agreements to BlackRock and a discussion of fall-out benefits
to BlackRock and its affiliates and significant shareholders; (c) a general
analysis provided by BlackRock concerning investment advisory fees charged
to other clients, such as institutional clients and open-end funds, under
similar investment mandates, as well as the performance of such other
clients; (d) the impact of economies of scale; (e) a summary of aggregate
amounts paid by each Fund to BlackRock; and (f) an internal comparison
of management fees classified by Lipper, if applicable.

At an in-person meeting held on April 14, 2009, each Board reviewed
materials relating to its consideration of the Agreements. As a result of the
discussions that occurred during the April 14, 2009 meeting, the Boards
presented BlackRock with questions and requests for additional informa-
tion and BlackRock responded to these requests with additional written
information in advance of the May 28 – 29, 2009 Board meeting.

At an in-person meeting held on May 28 – 29, 2009, the Boards of each
of BGT, BPP, BTZ and CII, including the Independent Board Members, unani-
mously approved the continuation of the Advisory Agreement between the

60 ANNUAL REPORT OCTOBER 31, 2009


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

Manager and such Fund and the Sub-Advisory Agreement among such
Fund, the Manager and the Sub-Advisor(s), as applicable, each for a one-
year term ending June 30, 2010. The Boards considered all factors they
believed relevant with respect to the Funds, including, among other factors:
(a) the nature, extent and quality of the services provided by BlackRock;
(b) the investment performance of the Fund and BlackRock portfolio man-
agement; (c) the advisory fee and the cost of the services and profits to
be realized by BlackRock and certain affiliates from their relationship with
the Fund; (d) economies of scale; and (e) other factors.

Each Board also considered other matters it deemed important to the
approval process, such as services related to the valuation and pricing
of its respective Fund’s portfolio holdings, direct and indirect benefits to
BlackRock and its affiliates and significant shareholders from their relation
ship with such Fund and advice from independent legal counsel with
respect to the review process and materials submitted for the Board’s
review. The Boards noted the willingness of BlackRock personnel to engage
in open, candid discussions with the Boards. The Boards did not identify
any particular information as controlling, and each Board Member may
have attributed different weights to the various items considered.

At the in-person meeting held on May 28 – 29, 2009, the Boards of each
of PSY and PSW held extended discussions of the long- and short-term
performance of PSY and PSW and the future prospects for the investment
policies of such Funds with respect to investing in primarily preferred
stocks. At such meeting, the Boards of each of PSY and PSW approved
the continuation of the Advisory Agreement between the Manager and
each such Fund and the Sub-Advisory Agreement among such Fund, the
Manager and the Sub-Advisor(s) on an interim basis for a three-month
period ended September 30, 2009. In taking such action, the Boards of
each of PSY and PSW noted that the interim approval of the Agreements
was intended to allow and encourage BlackRock to explore various alter-
natives for the future management of PSY and PSW, and to report back to
the Boards with recommendations at the Boards’ next regularly scheduled
in-person meetings.

At an in-person meeting of the Boards of each of PSY and PSW on
August 25 – 26, 2009, BlackRock recommended changing certain
investment policies of PSY and PSW by removing their non-fundamental
investment policies requiring that they invest at least 80% of their respec-
tive assets in preferred securities and adopting a new non-fundamental
policy requiring that PSY and PSW invest at least 80% of their respective
total assets in credit-related securities, including, but not limited to,
investment grade corporate bonds, high yield bonds, bank loans, preferred
securities or convertible bonds or derivatives with economic characteristics
similar to these credit-related securities. As a result of these investment
policy amendments, PSY and PSW were proposed to be renamed
BlackRock Credit Allocation Income Trust I, Inc. and BlackRock Credit
Allocation Income Trust II, Inc., respectively, to reflect their new
portfolio characteristics.

After considering BlackRock’s proposed changes for PSY and PSW and
recalling their deliberations with respect to PSY and PSW at the April
and May Board meetings, the Board of each such Fund, including the

Independent Board Members, unanimously approved the continuation of
the Advisory Agreement between the Manager and such Fund and the Sub-
Advisory Agreement among such Fund, the Manager and the Sub-Advisor(s),
each for a nine-month term ending June 30, 2010.

A. Nature, Extent and Quality of the Services: Each Board, including its
Independent Board Members, reviewed the nature, extent and quality of
services provided by BlackRock, including the investment advisory services
and the resulting performance of its respective Fund. Throughout the year,
each Board compared its respective Fund’s performance to the perform-
ance of a comparable group of closed-end funds, and the performance of
a relevant benchmark, if any. The Boards met with BlackRock’s senior man-
agement personnel responsible for investment operations, including the
senior investment officers. Each Board also reviewed the materials provided
by its respective Fund’s portfolio management team discussing such Fund’s
performance and such Fund’s investment objective, strategies and outlook.

Each Board considered, among other factors, the number, education and
experience of BlackRock’s investment personnel generally and its respective
Fund’s portfolio management team, investments by portfolio managers in the
funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s
use of technology, BlackRock’s commitment to compliance and BlackRock’s
approach to training and retaining portfolio managers and other research,
advisory and management personnel. Each Board also reviewed a general
description of BlackRock’s compensation structure with respect to its
respective Fund’s portfolio management team and BlackRock’s ability
to attract and retain high-quality talent.

In addition to advisory services, each Board considered the quality of the
administrative and non-investment advisory services provided to its respec-
tive Fund. BlackRock and its affiliates and significant shareholders provide
the Funds with certain administrative and other services (in addition to any
such services provided to the Funds by third parties) and officers and other
personnel as are necessary for the operations of the Funds. In addition to
investment advisory services, BlackRock and its affiliates provide the Funds
with other services, including (i) preparing disclosure documents, such as
the prospectus and the statement of additional information in connection
with the initial public offering and periodic shareholder reports; (ii) prepar-
ing communications with analysts to support secondary market trading of
the Funds; (iii) assisting with daily accounting and pricing; (iv) preparing
periodic filings with regulators and stock exchanges; (v) overseeing and
coordinating the activities of other service providers; (vi) organizing Board
meetings and preparing the materials for such Board meetings; (vii) pro-
viding legal and compliance support; and (viii) performing other adminis-
trative functions necessary for the operation of the Funds, such as tax
reporting, fulfilling regulatory filing requirements, and call center services.
The Boards reviewed the structure and duties of BlackRock’s fund adminis-
tration, accounting, legal and compliance departments and considered
BlackRock’s policies and procedures for assuring compliance with applica-
ble laws and regulations.

B. The Investment Performance of the Funds and BlackRock: Each Board,
including its Independent Board Members, also reviewed and considered
the performance history of its respective Fund. In preparation for the April 14,

ANNUAL REPORT OCTOBER 31, 2009 61


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

2009 meeting, the Boards were provided with reports, independently pre-
pared by Lipper, which included a comprehensive analysis of each Fund’s
performance. The Boards also reviewed a narrative and statistical analysis
of the Lipper data that was prepared by BlackRock, which analyzed various
factors that affect Lipper’s rankings. In connection with its review, each
Board received and reviewed information regarding the investment per-
formance of its respective Fund as compared to a representative group
of similar funds as determined by Lipper and to all funds in such Fund’s
applicable Lipper category and, where applicable, a customized peer group
selected by BlackRock. Each Board was provided with a description of the
methodology used by Lipper to select peer funds. Each Board regularly
reviews the performance of its respective Fund throughout the year.

The Board of BTZ noted that, in general, BTZ performed better than its Peers
in that the performance of BTZ was at or above the median of its customized
Lipper peer group in both the one-year and since inception periods reported.

The Board of CII noted that, in general, CII performed better than its Peers
in that the performance of CII was at or above the median of its Lipper
Performance Universe in two of the one-year, three-year and since incep-
tion periods reported.

The Board of BGT noted that, in general, BGT performed better than its
Peers in that the performance of BGT was at or above the median of its
Lipper Performance Universe in each of the one-year, three-year and since
inception periods reported.

The Board of each of PSW, PSY, and BPP noted that PSW, PSY, and BPP
performed below the median of their respective customized Lipper peer
group in the one-, three- and five-year periods reported. The Board of
each of PSW, PSY, and BPP, and BlackRock reviewed the reasons for PSW’s,
PSY’s, and BPP’s underperformance during these periods compared with
their respective Peers. Each Board was informed that, among other things,
PSW’s, PSY’s, and BPP’s respective underweight position to retail preferreds
negatively impacted each such Fund.

For PSW, PSY and BPP, the Board of each respective Fund and BlackRock
discussed BlackRock’s commitment to providing the resources necessary
to assist the portfolio managers and to improve each such Fund’s per-
formance, including the changes to PSW’s and PSY’s non-fundamental
investment policies.

C. Consideration of the Advisory Fees and the Cost of the Services
and Profits to be Realized by BlackRock and its Affiliates from their
Relationship with the Funds: Each Board, including its Independent
Board Members, reviewed its respective Fund’s contractual advisory fee
rates compared with the other funds in its respective Lipper category.
Each Board also compared its respective Fund’s total expenses, as well
as actual management fees, to those of other comparable funds. Each
Board considered the services provided and the fees charged by
BlackRock to other types of clients with similar investment mandates,
including separately managed institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s
financial condition and profitability with respect to the services it provided
the Funds. The Boards were also provided with a profitability analysis that

detailed the revenues earned and the expenses incurred by BlackRock for
services provided to the Funds. The Boards reviewed BlackRock’s profitabil-
ity with respect to the Funds and other funds the Boards currently oversee
for the year ended December 31, 2008 compared to available aggregate
profitability data provided for the year ended December 31, 2007. The
Boards reviewed BlackRock’s profitability with respect to other fund com-
plexes managed by the Manager and/or its affiliates. The Boards reviewed
BlackRock’s assumptions and methodology of allocating expenses in the
profitability analysis, noting the inherent limitations in allocating costs among
various advisory products. The Boards recognized that profitability may be
affected by numerous factors including, among other things, fee waivers by
the Manager, the types of funds managed, expense allocations and busi-
ness mix, and therefore comparability of profitability is somewhat limited.

The Boards noted that, in general, individual fund or product line profitability
of other advisors is not publicly available. Nevertheless, to the extent such
information is available, the Boards considered BlackRock’s overall operat-
ing margin, in general, compared to the operating margin for leading invest-
ment management firms whose operations include advising closed-end
funds, among other product types. The comparison indicated that operating
margins for BlackRock with respect to its registered funds are generally
consistent with margins earned by similarly situated publicly traded com-
petitors. In addition, the Boards considered, among other things, certain
third-party data comparing BlackRock’s operating margin with that of other
publicly-traded asset management firms, which concluded that larger asset
bases do not, in themselves, translate to higher profit margins.

In addition, the Boards considered the cost of the services provided to the
Funds by BlackRock, and BlackRock’s and its affiliates’ profits relating to the
management and distribution of the Funds and the other funds advised by
BlackRock and its affiliates. As part of their analysis, the Boards reviewed
BlackRock’s methodology in allocating its costs to the management of the
Funds. The Boards also considered whether BlackRock has the financial
resources necessary to attract and retain high quality investment manage-
ment personnel to perform its obligations under the Agreements and to con-
tinue to provide the high quality of services that is expected by the Boards.

The Boards of each of BGT, BPP, BTZ, CII, PSY and PSW noted that its
respective Fund paid contractual management fees, which do not take into
account any expense reimbursement or fee waivers, lower than or equal to
the median contractual management fees paid by such Fund’s Peers.

D. Economies of Scale: Each Board, including its Independent Board
Members, considered the extent to which economies of scale might be
realized as the assets of its respective Fund increase and whether there
should be changes in the advisory fee rate or structure in order to enable
such Fund to participate in these economies of scale, for example through
the use of breakpoints in the advisory fee based upon the assets of such
Fund. The Boards considered that the funds in the BlackRock fund complex
share some common resources and, as a result, an increase in the overall
size of the complex could permit each fund to incur lower expenses than
it would otherwise as a stand-alone entity. The Boards also considered
BlackRock’s overall operations and its efforts to expand the scale of, and
improve the quality of, its operations.

62 ANNUAL REPORT OCTOBER 31, 2009


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)

The Boards noted that most closed-end fund complexes do not have fund
level breakpoints because closed-end funds generally do not experience
substantial growth after the initial public offering and each fund is man-
aged independently, consistent with its own investment objectives. The
Boards noted that only one closed-end fund in the Fund Complex has
breakpoints in its fee structure. Information provided by Lipper also
revealed that only one closed-end fund complex used a complex-level
breakpoint structure.

E. Other Factors: The Boards also took into account other ancillary or “fall-
out” benefits that BlackRock or its affiliates and significant shareholders
may derive from their relationship with the Funds, both tangible and intan-
gible, such as BlackRock’s ability to leverage its investment professionals
who manage other portfolios, an increase in BlackRock’s profile in the
investment advisory community, and the engagement of BlackRock’s affili-
ates and significant shareholders as service providers to the Funds, includ-
ing for administrative and distribution services. The Boards also noted that
BlackRock may use third-party research obtained by soft dollars generated
by certain mutual fund transactions to assist itself in managing all or a
number of its other client accounts.

In connection with their consideration of the Agreements, the Boards also
received information regarding BlackRock’s brokerage and soft dollar prac-
tices. The Boards received reports from BlackRock, which included informa-
tion on brokerage commissions and trade execution practices throughout
the year.

Conclusion

Each Board, including its Independent Board Members, unanimously
approved the continuation of the Advisory Agreement between its respec-
tive Fund and the Manager for a one-year term ending June 30, 2010, in
the case of BGT, BPP, BTZ and CII, and for a three-month interim period
followed by a nine-month term ending June 30, 2010 for each of PSW
and PSY, and, where applicable, the Sub-Advisory Agreement among such
Fund, the Manager and such Fund’s Sub-Advisor(s) for a one-year term
ending June 30, 2010, in the case of BGT, BPP, BTZ and CII, and for a
three-month interim period followed by a nine-month term ending June 30,
2010 for each of PSW and PSY. Based upon its evaluation of all these fac-
tors in their totality, each Board, including its Independent Board Members,
was satisfied that the terms of the Agreements were fair and reasonable
and in the best interest of its respective Fund and its shareholders. In
arriving at a decision to approve the Agreements, each Board did not
identify any single factor or group of factors as all-important or controlling,
but considered all factors together, and different Board Members may
have attributed different weights to the various factors considered. The
Independent Board Members were also assisted by the advice of inde-
pendent legal counsel in making this determination. The contractual fee
arrangements for each Fund reflects the results of several years of review
by such Fund’s Board Members and predecessor Board Members, and
discussions between such Board Members (and predecessor Board
Members) and BlackRock. Certain aspects of the arrangements may be
the subject of more attention in some years than in others, and the Board
Members’ conclusions may be based in part on their consideration of these
arrangements in prior years.

ANNUAL REPORT OCTOBER 31, 2009 63


Automatic Dividend Reinvestment Plans

For PSW, PSY and CII

PSW, PSY and CII offer a Dividend Reinvestment Plan (the “Plan”) under
which income and capital gains dividends paid by a Fund are automati-
cally reinvested in additional Common Shares of the Fund. The Plan is
administered on behalf of the shareholders by BNY Mellon Shareowner
Services for CII and Computershare Trust Company, N.A. for PSW and PSY
(individually, the “Plan Agent” or together, the “Plan Agents”). Under the Plan,
whenever a Fund declares a dividend, participants in the Plan will receive
the equivalent in Common Shares of the Fund. The Plan Agents will acquire
the shares for the participant’s account either (i) through receipt of addi-
tional unissued but authorized shares of the Funds (“newly issued shares”)
or (ii) by purchase of outstanding Common Shares on the open market on
the New York Stock Exchange, as applicable, or elsewhere. If, on the divi-
dend payment date, the Fund’s net asset value per share is equal to or less
than the market price per share plus estimated brokerage commissions
(a condition often referred to as a “market premium”), the Plan Agents will
invest the dividend amount in newly issued shares. If the Fund’s net asset
value per share is greater than the market price per share (a condition often
referred to as a “market discount”), the Plan Agents will invest the dividend
amount by purchasing on the open market additional shares. If the Plan
Agents are unable to invest the full dividend amount in open market pur-
chases, or if the market discount shifts to a market premium during the
purchase period, the Plan Agents will invest any uninvested portion in
newly issued shares. The shares acquired are credited to each shareholder’s
account. The amount credited is determined by dividing the dollar amount
of the dividend by either (i) when the shares are newly issued, the net
asset value per share on the date the shares are issued or (ii) when shares
are purchased in the open market, the average purchase price per share.

Participation in the Plan is automatic, that is, a shareholder is automati-
cally enrolled in the Plan when he or she purchases shares of Common
Shares of the Funds unless the shareholder specifically elects not to partici-
pate in the Plan. Shareholders who elect not to participate will receive all
dividend distributions in cash. Shareholders who do not wish to participate
in the Plan must advise their Plan Agent in writing (at the address set forth
below) that they elect not to participate in the Plan. Participation in the
Plan is completely voluntary and may be terminated or resumed at any
time without penalty by writing to the Plan Agent.

The Plan provides an easy, convenient way for shareholders to make addi-
tional, regular investments in the Funds. The Plan promotes a long-term
strategy of investing at a lower cost. All shares acquired pursuant to the
Plan receive voting rights. In addition, if the market price plus commissions
of a Fund’s shares is above the net asset value, participants in the Plan will
receive shares of the Funds for less than they could otherwise purchase
them and with a cash value greater than the value of any cash distribution
they would have received. However, there may not be enough shares avail-
able in the market to make distributions in shares at prices below the net
asset value. Also, since the Funds do not redeem shares, the price on
resale may be more or less than the net asset value.

There are no enrollment fees or brokerage fees for participating in the
Plan. The Plan Agents’ service fees for handling the reinvestment of distri-
butions are paid for by the Funds. However, brokerage commissions may be
incurred when the Funds purchase shares on the open market and share-
holders will pay a pro rata share of any such commissions.

The automatic reinvestment of dividends and distributions will not relieve
participants of any federal, state or local income tax that may be payable
(or required to be withheld) on such dividends. Therefore, income and
capital gains may still be realized even though shareholders do not receive
cash. If, when the Funds’ shares are trading at a market premium, the
Funds issue shares pursuant to the Plan that have a greater fair market
value than the amount of cash reinvested, it is possible that all or a portion
of the discount from the market value (which may not exceed 5% of the
fair market value of the Funds’ shares) could be viewed as a taxable distri-
bution. If the discount is viewed as a taxable distribution, it is also possible
that the taxable character of this discount would be allocable to all the
shareholders, including shareholders who do not participate in the Plan.
Thus, shareholders who do not participate in the Plan might be required to
report as ordinary income a portion of their distributions equal to their allo-
cable share of the discount.

All correspondence concerning the Plan, including any questions about
the Plan, should be directed to the Plan Agent at the following addresses:
Shareholders of CII should contact BNY Mellon Shareowner Services, P.O.
Box 385035, Pittsburgh, PA 15252-8035 Telephone: (866) 216-0242
and shareholders of PSW and PSY should contact Computershare Trust
Company, N.A., P.O. Box 43078, Providence, RI 02940-3078 Telephone:
(800) 699-1BFM or overnight correspondence should be directed to the
Plan Agent at 250 Royall Street, Canton, MA 02021.

For BPP, BTZ and BGT

Pursuant to the Plan of BPP, BTZ and BGT (the “Funds”), shareholders are
automatically enrolled to have all distributions of dividends and capital
gains reinvested by Computershare Trust Company, N.A. (the “Plan Agent”)
in the respective Fund’s shares pursuant to the Plan. Shareholders who
do not participate in the Plan will receive all distributions in cash paid by
check and mailed directly to the shareholders of record (or if the shares
are held in street or other nominee name, then to the nominee) by the
Plan Agent, which serves as agent for the shareholders in administering
the Plan.

After the Funds declare a dividend or determine to make a capital gain
distribution, the Plan Agent will acquire shares for the participants’ account,
depending upon the circumstances described below, either (i) through
receipt of unissued but authorized shares from the Funds (“newly issued
shares”) or (ii) by open market purchases. If, on the dividend payment
date, the net asset value per share NAV is equal to or less than the market
price per share plus estimated brokerage commissions (such condition
being referred to herein as “market premium”), the Plan Agent will invest
the dividend amount in newly issued shares on behalf of the participants.
The number of newly issued shares to be credited to each participant’s

64 ANNUAL REPORT OCTOBER 31, 2009


Automatic Dividend Reinvestment Plans (concluded)

account will be determined by dividing the dollar amount of the dividend
by the NAV on the date the shares are issued. However, if the NAV is less
than 95% of the market price on the payment date, the dollar amount of
the dividend will be divided by 95% of the market price on the payment
date. If, on the dividend payment date, the NAV is greater than the market
value per share plus estimated brokerage commissions (such condition
being referred to herein as “market discount”), the Plan Agent will invest
the dividend amount in shares acquired on behalf of the participants in
open-market purchases.

The Plan Agent’s fees for the handling of the reinvestment of dividends and
distributions will be paid by each Fund. However, each participant will pay
a pro rata share of brokerage commissions incurred with respect to the
Plan Agent’s open market purchases in connection with the reinvestment

of dividends and distributions. The automatic reinvestment of dividends
and distributions will not relieve participants of any Federal income tax
that may be payable on such dividends or distributions.

Each Fund reserves the right to amend or terminate the Plan. There is
no direct service charge to participants in the Plan; however each Fund
reserves the right to amend the Plan to include a service charge payable
by the participants. Participants who request a sale of shares through the
Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold
brokerage commission. All correspondence concerning the Plan should be
directed to the Plan Agent at P.O. Box 43078, Providence, RI 02940-3078
or by calling (800) 699-1BFM. All overnight correspondence should be
directed to the Plan Agent at 250 Royall Street, Canton, MA 02021.

ANNUAL REPORT OCTOBER 31, 2009 65


Officers and Directors         
        Number of BlackRock-   
        Advised Registered   
    Length    Investment Companies   
  Position(s)  of Time    (“RICs”) Consisting of   
Name, Address  Held with  Served as    Investment Portfolios  Public 
and Year of Birth  Funds  a Director2  Principal Occupation(s) During Past 5 Years  (“Portfolios”) Overseen  Directorships 
     Non-Interested Directors1         
Richard E. Cavanagh  Chairman  Since  Trustee, Aircraft Finance Trust since 1999; Director, The Guardian  102 RICS consisting of  Arch Chemical 
40 East 52nd Street  of the Board  2007  Life Insurance Company of America since 1998; Trustee, Educational  100 Portfolios  (chemical and allied 
New York, NY 10022  and Director    Testing Service from 1997 to 2009 and Chairman from 2005 to 2009    products) 
1946      Senior Advisor, The Fremont Group since 2008 and Director thereof     
      since 1996; Adjunct Lecturer, Harvard University since 2007; President     
and Chief Executive Officer of The Conference Board, Inc. (global
      business research organization) from 1995 to 2007.     
Karen P. Robards  Vice Chair  Since  Partner of Robards & Company, LLC (financial advisory firm) since  102 RICs consisting of  AtriCure, Inc. 
40 East 52nd Street  of the Board,  2007  1987; Co-founder and Director of the Cooke Center for Learning and  100 Portfolios  (medical devices); 
New York, NY 10022  Chair of    Development, (a not-for-profit organization) since 1987; Director of    Care Investment 
1950  the Audit    Enable Medical Corp. from 1996 to 2005.    Trust, Inc. (health 
  Committee        care real estate 
  and Director        investment trust) 
G. Nicholas Beckwith, III  Director  Since  Chairman and Chief Executive Officer, Arch Street Management, LLC  102 RICs consisting of  None 
40 East 52nd Street    2007  (Beckwith Family Foundation) and various Beckwith property companies  100 Portfolios   
New York, NY 10022      since 2005; Chairman of the Board of Directors, University of Pittsburgh     
1945      Medical Center since 2002; Board of Directors, Shady Side Hospital     
Foundation since 1977; Board of Directors, Beckwith Institute for
      Innovation In Patient Care since 1991; Member, Advisory Council on     
      Biology and Medicine, Brown University since 2002; Trustee, Claude     
      Worthington Benedum Foundation (charitable foundation) since 1989;     
      Board of Trustees, Chatham University since 1981; Board of Trustees,     
University of Pittsburgh since 2002; Emeritus Trustee, Shady Side
      Academy since 1977; Chairman and Manager, Penn West Industrial     
      Trucks LLC (sales, rental and servicing of material handling equipment)     
      from 2005 to 2007; Chairman, President and Chief Executive Officer,     
      Beckwith Machinery Company (sales, rental and servicing of construction   
      and equipment) from 1985 to 2005; Member of the Board of Directors,     
      National Retail Properties (REIT) from 2006 to 2007.     
Kent Dixon  Director  Since  Consultant/Investor since 1988.  102 RICs consisting of  None 
40 East 52nd Street  and Member  2007    100 Portfolios   
New York, NY 10022  of the Audit         
1937  Committee         
Frank J. Fabozzi  Director  Since  Consultant/Editor of The Journal of Portfolio Management since 2006;  102 RICs consisting of  None 
40 East 52nd Street  and Member  2007  Professor in the Practice of Finance and Becton Fellow, Yale University,  100 Portfolios   
New York, NY 10022  of the Audit    School of Management, since 2006; Adjunct Professor of Finance     
1948  Committee    and Becton Fellow, Yale University from 1994 to 2006.     
Kathleen F. Feldstein  Director  Since  President of Economics Studies, Inc. (private economic consulting  102 RICs consisting of  The McClatchy 
40 East 52nd Street    2007  firm) since 1987; Chair, Board of Trustees, McLean Hospital from  100 Portfolios  Company 
New York, NY 10022      2000 to 2008 and Trustee Emeritus thereof since 2008; Member of    (publishing) 
1941      the Board of Partners Community Healthcare, Inc. since 2005;     
Member of the Corporation of Partners HealthCare since 1995;
      Trustee, Museum of Fine Arts, Boston since 1992; Member of the     
      Visiting Committee to the Harvard University Art Museum since 2003.     
James T. Flynn  Director  Since  Chief Financial Officer of JP Morgan & Co., Inc. from 1990 to 1995.  102 RICs consisting of  None 
40 East 52nd Street  and Member  2007    100 Portfolios   
New York, NY 10022  of the Audit         
1939  Committee         
Jerrold B. Harris  Director  Since  Trustee, Ursinus College since 2000; Director, Troemner LLC  102 RICs consisting of  BlackRock Kelso 
40 East 52nd Street    2007  (scientific equipment)since 2000.  100 Portfolios  Capital Corp. 
New York, NY 10022           
1942           
66           ANNUAL REPORT                                                                                                       OCTOBER 31, 2009   


Officers and Directors (continued)       
        Number of BlackRock-   
        Advised Registered   
    Length    Investment Companies   
  Position(s)  of Time    (“RICs”) Consisting of   
Name, Address  Held with  Served as    Investment Portfolios   Public 
and Year of Birth  Funds  a Director2   Principal Occupation(s) During Past 5 Years  (“Portfolios”) Overseen   Directorships 
     Non-Interested Directors1 (concluded)           
R. Glenn Hubbard  Director  Since   Dean, Columbia Business School since 2004; Columbia faculty  102 RICs consisting of  ADP (data and 
40 East 52nd Street    2007   member since 1988; Co-Director, Columbia Business School’s  100 Portfolios  information services), 
New York, NY 10022       Entrepreneurship Program from 1997 to 2004; Visiting Professor,      KKR Financial 
1958       John F. Kennedy School of Government at Harvard University and the      Corporation (finance), 
       Harvard Business School since 1985 and at the University of Chicago      Metropolitan Life 
       since 1994; Chairman, U.S. Council of Economic Advisers under the      Insurance Company 
       President of the United States from 2001 to 2003.      (insurance) 
W. Carl Kester  Director  Since   George Fisher Baker Jr. Professor of Business Administration, Harvard  102 RICs consisting of  None 
40 East 52nd Street  and Member  2007   Business School; Deputy Dean for Academic Affairs, since 2006; Unit  100 Portfolios   
New York, NY 10022  of the Audit     Head, Finance, Harvard Business School, from 2005 to 2006; Senior       
1951  Committee     Associate Dean and Chairman of the MBA Program of Harvard Business       
       School, from 1999 to 2005; Member of the faculty of Harvard Business       
       School since 1981; Independent Consultant since 1978.       
  1 Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.     
  2 Date shown is the earliest date a person has served as a director for the Funds covered by this annual report. Following the combination of Merrill Lynch 
   Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock Fund boards 
   were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows directors as joining the Funds’ board in 2007, 
   each director first became a member of the board of other legacy MLIM or legacy BlackRock Funds as follows: G. Nicholas Beckwith, III, 1999; Richard E. 
   Cavanagh, 1994; Kent Dixon, 1988; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 
   2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.       
     Interested Directors3             
Richard S. Davis  President  Since  Managing Director, BlackRock, Inc. since 2005; Chief Executive Officer, State Street  171 RICs  None 
40 East 52nd Street  and  2007  Research & Management Company from 2000 to 2005; Chairman of the Board  consisting of   
New York, NY 10022  Director    of Trustees, State Street Research Mutual Funds from 2000 to 2005; Chairman,  282 Portfolios   
1945      SSR Realty from 2000 to 2004.       
Henry Gabbay  Director  Since  Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock,  171 RICs  None 
40 East 52nd Street    2007  Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC  consisting of   
New York, NY 10022      from 1998 to 2007; President of BlackRock Funds and BlackRock Bond    282 Portfolios   
1947      Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end     
      funds in the BlackRock fund complex from 1989 to 2006.       
  3 Mr. Davis is an “interested person,” as defined in the Investment Company Act of 1940, of the Funds based on his position with BlackRock, Inc. and its 
   affiliates. Mr. Gabbay is an “interested person” of the Funds based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership 
   of BlackRock, Inc. and PNC securities. Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. 
           ANNUAL REPORT  OCTOBER 31, 2009                                     67 


Officers and Directors (concluded)       
  Position(s)           
Name, Address  Held with  Length of         
and Year of Birth  Funds  Time Served Principal Occupation(s) During Past 5 Years     
Funds Officers1             
Anne F. Ackerley  President  Since         Managing Director of BlackRock, Inc. since 2000; Vice President of the BlackRock-advised funds from 2007 to 2009; 
40 East 52nd Street  and Chief  2009         Chief Operating Officer of BlackRock’s Global Client Group (GCG) since 2009; Chief Operating Officer of BlackRock’s 
New York, NY 10022  Executive           U.S. Retail Group from 2006 to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006. 
1962  Officer           
Brendan Kyne  Vice  Since         Director of BlackRock, Inc. since 2008; Head of Product Development and Management for BlackRock’s U.S. Retail 
40 East 52nd Street  President  2009         Group since 2009, co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008; 
New York, NY 10022             Associate of BlackRock, Inc. from 2002 to 2004.     
1977             
Neal J. Andrews  Chief  Since         Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund 
40 East 52nd Street  Financial  2007         Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006. 
New York, NY 10022  Officer           
1966             
Jay M. Fife  Treasurer  Since         Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Assistant Treasurer of the Merrill Lynch 
40 East 52nd Street    2007         Investment Managers, L.P. (“MLIM”) and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of 
New York, NY 10022             MLIM Fund Services Group from 2001 to 2006.     
1970             
Brian P. Kindelan  Chief  Since         Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel 
40 East 52nd Street  Compliance  2007         of BlackRock, Inc. since 2005; Director and Senior Counsel of BlackRock Advisors, LLC from 2001 to 2004. 
New York, NY 10022  Officer           
1959             
Howard B. Surloff  Secretary  Since         Managing Director and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; General Counsel (U.S.) 
40 East 52nd Street    2007         of Goldman Sachs Asset Management, L.P. from 1993 to 2006.     
New York, NY 10022             
1965             
  1 Officers of the Funds serve at the pleasure of the Board.       
Investment Advisor     Custodians    Transfer Agent  Accounting Agent  Independent  Legal Counsel 
BlackRock Advisors, LLC     State Street Bank  Common Shares  State Street Bank  Registered Public  Skadden, Arps, Slate, 
Wilmington, DE 19809     and Trust Company1  Computershare Trust Company, N.A.1  and Trust Company  Accounting Firm  Meagher & Flom LLP 
     Boston, MA 02111  Canton, MA 02021  Princeton, NJ 08540  Deloitte & Touche LLP  New York, NY 10036 
Sub-Advisor             
          Princeton, NJ 08540   
BlackRock Financial     Brown Brothers,  BNY Mellon Shareowner Services2      Address of the Funds 
Management, Inc.2,3     Harriman & Co.2  Jersey City, NJ 07310      100 Bellevue Parkway 
New York, NY 10022     Boston, MA 02109        Wilmington, DE 19809 
      Auction Agent       
BlackRock Investment      Preferred Shares       
Management, LLC2      BNY Mellon Shareowner Services1       
Plainsboro, NJ 08536      Jersey City, NJ 07310       
1 For all Funds except CII.             
2 For CII.             
3 For PSW, PSY, BPP, BTZ and BGT.           

Effective July 31, 2009, Donald C. Burke, President and Chief Executive Officer of the Funds retired. The Funds’ Board
wishes Mr. Burke well in his retirement.

Effective August 1, 2009, Anne F. Ackerley became President and Chief Executive Officer of the Funds, and Brendan Kyne
became Vice President of the Funds.

68 ANNUAL REPORT OCTOBER 31, 2009


Additional Information               
     Proxy Results                 
The Annual Meeting of Shareholders was held on August 26, 2009 for shareholders of record on June 29, 2009 to elect director nominees of each Fund: 
Approved the Class II Directors as follows:               
  Richard S. Davis  Frank J. Fabozzi             James T. Flynn  Karen P. Robards 
     Votes    Votes    Votes    Votes 
  Votes For  Withheld  Votes For  Withheld   Votes For  Withheld  Votes For  Withheld 
BGT1  19,304,993  695,969  1,5362  412   19,358,516  642,446  19,407,966  592,996 
BTZ1  45,476,492  1,268,611  5,6002  1082   45,358,705   1,386,398  45,337,245  1,407,858 
BPP1  16,044,548  543,383  1,5222  302   16,044,548  543,383  16,037,584  550,347 
Approved the Directors as follows:               
      G. Nicholas Beckwith, III  Richard E. Cavanagh  Richard S. Davis 
        Votes    Votes    Votes 
      Votes For  Withheld   Votes For  Withheld  Votes For  Withheld 
CII      37,172,227  1,688,817   37,233,458  1,627,586  37,337,729  1,523,315 
PSW      8,451,844  322,043     8,430,797  343,090  8,450,828  323,059 
PSY      34,209,217  1,432,504   34,213,593  1,428,128  34,247,323  1,394,398 
      Kent Dixon             Frank J. Fabozzi  Kathleen F. Feldstein 
        Votes    Votes    Votes 
      Votes For  Withheld   Votes For  Withheld  Votes For  Withheld 
CII      37,174,585  1,686,459  37,288,696  1,572,348  37,194,912  1,666,132 
PSW      8,433,142  340,745           1,2792  122  8,454,805  319,082 
PSY      34,097,941  1,543,780           3,7312  722  34,195,383  1,446,338 
      James T. Flynn             Henry Gabbay  Jerrold B. Harris 
        Votes    Votes    Votes 
      Votes For  Withheld   Votes For  Withheld  Votes For  Withheld 
CII      37,181,395  1,679,649  37,303,898  1,557,146  37,281,759  1,579,285 
PSW      8,438,377  335,510   8,450,828   323,059  8,447,635  326,252 
PSY      34,166,913  1,474,808  34,240,405  1,401,316  34,247,106  1,394,615 
      R. Glenn Hubbard             W. Carl Kester  Karen P. Robards 
        Votes    Votes    Votes 
      Votes For  Withheld   Votes For  Withheld  Votes For  Withheld 
CII      37,209,180  1,651,864   37,313,817  1,547,227  37,310,060  1,550,984 
PSW      8,436,816  337,071             1,2792  122  8,437,967  335,920 
PSY      34,258,257  1,383,464             3,7312  722  34,257,723  1,383,998 
1 The Board is organized into three classes, one class of which is elected annually. Each Director serves a three-year term concurrent with the class into which he or she is elected. 
 2 Voted on by holders of Preferred Shares only               
     Fund Certification                 
Certain Funds are listed for trading on the New York Stock Exchange  Funds filed with the SEC the certification of its chief executive officer and 
(“NYSE”) and have filed with the NYSE their annual chief executive officer  chief financial officer required by section 302 of the Sarbanes-Oxley Act. 
certification regarding compliance with the NYSE’s listing standards. The           
  ANNUAL REPORT        OCTOBER 31, 2009    69 


Additional Information (continued)

Dividend Policy

Each Fund’s, except CII’s, dividend policy is to distribute all or a portion of
its net investment income to its shareholders on a monthly (quarterly for
CII) basis. In order to provide shareholders with a more stable level of
dividend distributions, the Funds may at times pay out less than the entire
amount of net investment income earned in any particular month/quarter
and may at times in any particular month/quarter pay out such accumu-
lated but undistributed income in addition to net investment income

earned in that month/quarter. As a result, the dividends paid by the Funds
for any particular month/quarter may be more or less than the amount
of net investment income earned by the Funds during such month/quarter.
The Funds’ current accumulated but undistributed net investment income,
if any, is disclosed in the Statements of Assets and Liabilities, which com-
prises part of the financial information included in this report.

General Information

The Funds do not make available copies of their Statements of Additional
Information because the Funds’ shares are not continuously offered, which
means that the Statement of Additional Information of each Fund has not
been updated after completion of the respective Fund’s offerings and the
information contained in each Fund’s Statement of Additional Information
may have become outdated.

CII

During the period, the Board of Directors (the “Board”) of CII approved a
change to the Fund’s option writing policy. The Fund has the authority to
write (i.e., sell) put options on the types of securities or instruments that
may be held by the Fund, provided that such put options are covered,
meaning that such options are secured by segregated, liquid instruments
or cash. Under the original policy, the Fund was limited from selling puts if,
as a result, more than 50% of the Fund’s assets would be required to cover
its potential obligations under its hedging and other investment transac-
tions. The Board approved the elimination of this 50% requirement. When
the Fund writes covered put options, it bears the risk of loss if the value of
the underlying stock declines below the exercise price minus the put pre-
mium. If the option is exercised, the Fund could incur a loss if it is required
to purchase the stock underlying the put option at a price greater than the
market price of the stock at the time of exercise plus the put premium the
Fund received when it wrote the option. While the Fund’s potential gain in
writing a covered put option is limited to distributions earned on the liquid
assets securing the put option plus the premium received from the pur-
chaser of the put option, the Fund risks a loss equal to the entire exercise
price of the option minus the put premium.

PSW, PSY, BPP and BTZ

On August 26, 2009, the Board of PSW, PSY, BPP and BTZ (the “Funds”)
approved a change to certain investment policies of the Funds. As a result
of these policy changes, PSY and BPP will no longer focus their investments
primarily on preferred securities and PSW will no longer focus its invest-
ments primarily on preferred securities and corporate bonds. In addition,
BTZ will no longer focus its investments primarily on preferred and equity
securities, nor will it employ an option-writing strategy in the future.
Instead, the Funds will transition to a portfolio investing in a broader
spectrum of securities across the capital structure. In addition, the
Board approved name changes for the Funds as follows:

Prior Name New Name
BlackRock Preferred and Corporate BlackRock Credit Allocation Income
Income Strategies Fund, Inc. Trust I, Inc.
BlackRock Preferred Income Strategies BlackRock Credit Allocation Income
Fund, Inc. Trust II, Inc.
BlackRock Preferred Opportunity Trust BlackRock Credit Allocation Income Trust III
BlackRock Preferred and Equity BlackRock Credit Allocation Income Trust IV
Advantage Trust

PSY and BPP each previously employed a non-fundamental investment pol-
icy of investing, under normal market conditions, at least 80% of its total
assets in preferred securities. PSW previously employed a non-fundamental
investment policy of investing, under normal market conditions, at least
80% of its total assets in a portfolio of preferred securities and corporate
debt securities. In addition, PSW employed a policy of investing, under
normal market conditions, at least 65% of its total assets in preferred
securities and up to 35% of its total assets in debt securities. BTZ previ-
ously employed a non-fundamental investment policy of investing, under
normal market conditions, at least 80% of its total assets in preferred and
equity securities and derivatives with economic characteristics similar to
individual or groups of equity securities. For each Fund, its non-fundamen-
tal policy has been revised to allow the Fund to invest, under normal mar-
ket conditions, at least 80% of its total assets in credit-related securities,
including, but not limited to, investment grade corporate bonds, high yield
bonds, bank loans, preferred securities or convertible bonds or derivatives
with economic characteristics similar to these credit-related securities.

The Board has taken these actions in response to the current and prospec-
tive market environment for preferred securities. BlackRock and the Board
believe the amended policies will better position each Fund to achieve its
investment objective and are in the best interests of the Funds’ sharehold-
ers. The approved changes will not alter the Funds’ investment objectives
and each Fund will continue to be managed in accordance with its invest-
ment objective of primarily providing shareholders with current income and
secondarily providing shareholders with capital appreciation.

In addition to the foregoing, the Board also approved changes to each
Fund’s restriction on credit quality of eligible investments. Previously, each
Fund was restricted to investing, under normal market conditions, no more
than 20% of its total assets in securities rated below investment grade at
the time of purchase. The amended policy allows each Fund to invest,
under normal market conditions, without limitation in securities rated below
investment grade at the time of purchase. While this policy affords each
Fund additional flexibility to invest in securities rated below investment
grade at the time of purchase, it is anticipated, under current market con-
ditions, that the Fund will maintain an average credit quality of at least
investment grade.

BlackRock anticipates that it will gradually reposition each Fund’s portfolio
over time and that during such period the Fund may continue to hold a
substantial portion of its assets in preferred securities, corporate bonds
and/or equity securities, as applicable. At this time, it is uncertain how long
the repositioning may take, and the Fund may continue to be subject to

70 ANNUAL REPORT OCTOBER 31, 2009


Additional Information (continued)

General Information (continued)

risks associated with investing a substantial portion of its assets in pre-
ferred securities until the repositioning is complete.

The Fund’s Investments

Following the transition, each Fund will invest at least 80% of its total
assets in credit-related securities, including, but not limited to, the follow-
ing types of investments:

Corporate Bonds — The Funds may invest in corporate bonds. The invest-
ment return of corporate bonds reflects interest on the security and
changes in the market value of the security. The market value of a
corporate bond generally may be expected to rise and fall inversely with
interest rates. The market value of a corporate bond also may be affected
by the credit rating of the corporation, the corporation’s performance and
perceptions of the corporation in the market place. There is a risk that
the issuers of the securities may not be able to meet their obligations on
interest or principal payments at the time called for by an instrument.

Below Investment Grade Securities — Though the Funds’ portfolios are
expected to maintain an average credit quality of at least investment grade
quality, the Fund may have a portion of its assets invested in securities
rated below investment grade, such as those rated Ba or lower by Moody’s
and BB or lower by S&P or Fitch or securities comparably rated by other
rating agencies, or in unrated securities determined by BlackRock Advisors,
LLC (the “Manager”) to be of comparable quality. Securities rated Ba by
Moody’s are judged to have speculative elements, their future cannot be
considered as well assured and often the protection of interest and princi-
pal payments may be very moderate. Securities rated BB by S&P or Fitch
are regarded as having predominantly speculative characteristics and, while
such obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.
Securities rated C are regarded as having extremely poor prospects of ever
attaining any real investment standing. Securities rated D are in default
and the payment of interest and/or repayment of principal is in arrears.
When the Manager believes it to be in the best interests of the Funds’ share-
holders, the Funds will reduce their investment in lower grade securities.

Bank Loans — The Fund may invest in bank loans denominated in US and
foreign currencies that are originated, negotiated and structured by a syn-
dicate of lenders (“Co-Lenders”) consisting of commercial banks, thrift
institutions, insurance companies, financial companies or other financial
institutions one or more of which administers the security on behalf of the
syndicate (the “Agent Bank”). Co-Lenders may sell such securities to third
parties called “Participants.” The Fund may invest in such securities either
by participating as a Co-Lender at origination or by acquiring an interest
in the security from a Co-Lender or a Participant (collectively, “Participation
Interests”). Co-Lenders and Participants interposed between the Fund and
the corporate borrower (the “Borrower”), together with Agent Banks, are
referred herein as “Intermediate Participants.” The Fund also may purchase a
participation interest in a portion of the rights of an Intermediate Participant,
which would not establish any direct relationship between the Fund and
the Borrower. In such cases, the Fund would be required to rely on the

Intermediate Participant that sold the participation interest not only for
the enforcement of the Fund’s rights against the Borrower but also for the
receipt and processing of payments due to the Fund under the security.
Because it may be necessary to assert through an Intermediate Participant
such rights as may exist against the Borrower, in the event the Borrower
fails to pay principal and interest when due, the Fund may be subject to
delays, expenses and risks that are greater than those that would be
involved if the Fund could enforce its rights directly against the Borrower.
Moreover, under the terms of a Participation Interest, the Fund may be
regarded as a creditor of the Intermediate Participant (rather than of the
Borrower), so that the Fund may also be subject to the risk that the Inter-
mediate Participant may become insolvent. Similar risks may arise with
respect to the Agent Bank if, for example, assets held by the Agent Bank
for the benefit of the Fund were determined by the appropriate regulatory
authority or court to be subject to the claims of the Agent Bank’s creditors.
In such case, the Fund might incur certain costs and delays in realizing
payment in connection with the Participation Interest or suffer a loss of
principal and/or interest. Further, in the event of the bankruptcy or insol-
vency of the Borrower, the obligation of the Borrower to repay the loan may
be subject to certain defenses that can be asserted by such Borrower as a
result of improper conduct by the Agent Bank or Intermediate Participant.

Convertible Bonds — The Fund may invest in convertible bonds. A convertible
bond is a bond that may be converted into or exchanged for a prescribed
amount of common stock or other equity security of the same or a different
issuer within a particular period of time at a specified price or formula. A
convertible bond entitles the holder to receive interest paid or accrued on
debt until the convertible bond matures or is redeemed, converted or
exchanged. Before conversion, convertible bonds have characteristics simi-
lar to nonconvertible income securities in that they ordinarily provide a sta-
ble stream of income with generally higher yields than those of common
stocks of the same or similar issuers, but lower yields than comparable
nonconvertible bonds. The value of a convertible bond is influenced by
changes in interest rates, with investment value declining as interest rates
increase and increasing as interest rates decline. The credit standing of the
issuer and other factors also may have an effect on the convertible bond’s
investment value. Convertible bonds rank senior to common stock in a cor-
poration’s capital structure but are usually subordinated to comparable
nonconvertible bonds. Convertible bonds may be subject to redemption at
the option of the issuer at a price established in the convertible bond’s
governing instrument.

Credit Derivatives — The Fund may engage in credit derivative transactions.
There are two broad categories of credit derivatives: default price risk
derivatives and market spread derivatives. Default price risk derivatives are
linked to the price of reference securities or loans after a default by the
issuer or borrower, respectively. Market spread derivatives are based on the
risk that changes in market factors, such as credit spreads, can cause a
decline in the value of a security, loan or index. There are three basic trans-
actional forms for credit derivatives: swaps, options and structured instru-
ments. The Fund may use credit default swaps. A credit default swap is an
agreement between two counterparties that allows one counterparty (the
“seller”) to purchase or be “long” a third party’s credit risk and the other
party (the “buyer”) to sell or be “short” the credit risk. Typically, the seller

ANNUAL REPORT OCTOBER 31, 2009 71


Additional Information (continued)

General Information (continued)

agrees to make regular fixed payments to the buyer with the same fre-
quency as the underlying reference bond. In exchange, the seller typically
has the right upon default of the underlying bond to put the bond to the
buyer in exchange for the bond’s par value plus interest. Credit default
swaps can be used as a substitute for purchasing or selling a credit secu-
rity and sometimes are preferable to actually purchasing the security. The
Fund does not intend to leverage its investments through the use of credit
default swaps. A purchaser of a credit default swap is subject to counter-
party risk. The Fund will monitor any such swaps or derivatives with a view
towards ensuring that the Fund remains in compliance with all applicable
regulatory, investment policy and tax requirements.

Risks

As a result of the Fund’s portfolio restructuring and revisions to certain of
its non-fundamental investment policies, your investment in the Fund will
be subject to the following additional risks following the transition:

Credit Risk — Credit risk is the risk that one or more debt securities in the
Fund’s portfolio will decline in price or fail to pay interest or principal when
due because the issuer of the security experiences a decline in its financial
status. If the recent adverse conditions in the credit markets adversely
affect the broader economy, the credit quality of issuers of credit securities
in which the Fund may invest would be more likely to decline, all other
things being equal. While a senior position in the capital structure of a bor-
rower may provide some protection with respect to the Fund’s investments
in senior secured floating rate and fixed rate loans or debt, losses may still
occur. To the extent the Fund invests in below investment grade securities, it
will be exposed to a greater amount of credit risk than a Fund which invests
in investment grade securities. The prices of lower grade securities are more
sensitive to negative developments, such as a decline in the issuer’s rev-
enues or a general economic downturn, than are the prices of higher grade
securities. Securities of below investment grade quality are predominantly
speculative with respect to the issuer’s capacity to pay interest and repay
principal when due and therefore involve a greater risk of default. In addi-
tion, the Fund’s use of credit derivatives will expose it to additional risk in
the event that the bonds underlying the derivatives default.

Interest Rate Risk — The value of certain debt securities in the Fund’s port-
folio could be affected by interest rate fluctuations. When interest rates
decline, the value of fixed rate securities can be expected to rise. Con-
versely, when interest rates rise, the value of fixed rate securities can be
expected to decline. Recent adverse conditions in the credit markets may
cause interest rates to rise. Although changes in prevailing interest rates
can be expected to cause some fluctuations in the value of floating rate
securities (due to the fact that rates only reset periodically), the values of
these securities are substantially less sensitive to changes in market inter-
est rates than fixed rate instruments. Fluctuations in the value of the Fund’s
securities will not affect interest income on existing securities, but will be
reflected in the Fund’s net asset value. The Fund may utilize certain strate-
gies, including taking positions in futures or interest rate swaps, for the pur-
pose of reducing the interest rate sensitivity of the portfolio and decreasing
the Fund’s exposure to interest rate risk, although there is no assurance
that it will do so or that such strategies will be successful.

Prepayment Risk — During periods of declining interest rates, borrowers
may exercise their option to prepay principal earlier than scheduled. For
fixed rate securities, such payments often occur during periods of declin-
ing interest rates, forcing the Fund to reinvest in lower yielding securities,
resulting in a possible decline in the Fund’s income and distributions to
shareholders. This is known as prepayment or “call” risk. Below investment
grade securities frequently have call features that allow the issuer to redeem
the security at dates prior to its stated maturity at a specified price (typi-
cally greater than par) only if certain prescribed conditions are met (“call
protection”). An issuer may redeem a below investment grade security if,
for example, the issuer can refinance the debt at a lower cost due to declin-
ing interest rates or an improvement in the credit standing of the issuer.
Certain of the Fund’s investments will not have call protection. For premium
bonds (bonds acquired at prices that exceed their par or principal value)
purchased by the Fund, prepayment risk may be enhanced.

Below Investment Grade Risk — The Fund may invest a substantial portion
of its assets in fixed income securities that are rated below investment
grade, which are commonly referred to as “junk bonds” and are regarded
as predominately speculative with respect to the issuer’s capacity to pay
interest and repay principal.

Lower grade securities may be particularly susceptible to economic down-
turns. It is likely that a prolonging of the current economic recession or a
future economic recession could disrupt severely the market for such secu-
rities and may have an adverse impact on the value of such securities. In
addition, it is likely that any such continuing or future economic downturn
could adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.

Lower grade securities, though high yielding, are characterized by high risk.
They may be subject to certain risks with respect to the issuing entity and
to greater market fluctuations than certain lower yielding, higher rated
securities. The retail secondary market for lower grade securities may be
less liquid than that for higher rated securities. Adverse conditions could
make it difficult at times for the Fund to sell certain securities or could
result in lower prices than those used in calculating the Fund’s net asset
value. Because of the substantial risks associated with investments in lower
grade securities, you could lose money on your investment in common
shares of the Fund, both in the short-term and the long-term.

Bank Loan Risk — As in the case of junk bonds, bank loans may be rated
in lower grade rating categories, or may be unrated but of lower grade qual-
ity. As in the case of junk bonds, bank loans can provide higher yields than
higher grade income securities, but are subject to greater credit and other
risks. Although bank loan obligations often are secured by pledges of
assets by the borrower and have other structural aspects intended to pro-
vide greater protection to the holders of bank loans than the holders of
unsecured and subordinated securities, there are also additional risks in
holding bank loans. In particular, the secondary trading market for bank
loans is not well developed, and therefore, bank loans present increased
market risk relating to liquidity and pricing concerns. In addition, there is

72 ANNUAL REPORT OCTOBER 31, 2009


Additional Information (continued)

General Information (concluded)

no assurance that the liquidation of the collateral would satisfy the claims
of the borrower’s obligations in the event of the nonpayment of scheduled
interest or principal, or that the collateral could be readily liquidated. As
a result, the Fund might not receive payments to which it is entitled and
thereby may experience a decline in the value of its investment and its
net asset value.

Convertible Bonds Risk — Although to a lesser extent than with fixed-income
securities, the market value of convertible bonds tends to decline as inter-
est rates increase and, conversely, tends to increase as interest rates
decline. In addition, because of the conversion feature, the market value
of convertible bonds tends to vary with fluctuations in the market value of
the underlying common stock. A unique feature of convertible bonds is that
as the market price of the underlying common stock declines, convertible
bonds tend to trade increasingly on a yield basis, and so may not experi-
ence market value declines to the same extent as the underlying common
stock. When the market price of the underlying common stock increases,
the prices of the convertible bonds tend to rise as a reflection of the value
of the underlying common stock. While no securities investments are with-
out risk, investments in convertible bonds generally entail less risk than
investments in common stock of the same issuer.

Credit Derivatives Risk — The use of credit derivatives is a highly specialized
activity which involves strategies and risks different from those associated
with ordinary portfolio security transactions. If the Manager is incorrect in its
forecasts of default risks, market spreads or other applicable factors, the
investment performance of the Fund would diminish compared with what it
would have been if these techniques were not used. Moreover, even if the
Manager is correct in its forecasts, there is a risk that a credit derivative posi-
tion may correlate imperfectly with the price of the asset or liability being
protected. The Fund’s risk of loss in a credit derivative transaction varies with
the form of the transaction. For example, if the Fund purchases a default
option on a security, and if no default occurs with respect to the security, the
Fund’s loss is limited to the premium it paid for the default option. In con-
trast, if there is a default by the grantor of a default option, the Fund’s loss
will include both the premium that it paid for the option and the decline in
value of the underlying security that the default option protected.

Other than the revisions discussed above, there were no material changes
in the Funds’ investment objectives or policies or to the Funds’ charters or
by-laws that were not approved by the shareholders or in the principal risk
factors associated with investment in the Funds. There have been no
changes in the persons who are primarily responsible for the day-to-day
management of the Funds’ portfolios.

BGT

During the period, the Board of BGT approved a change to the Fund’s name
from “BlackRock Global Floating Rate Income Trust” to “BlackRock Floating
Rate Income Trust.”

Quarterly performance, semi-annual and annual reports and other informa-
tion regarding the Funds may be found on BlackRock’s website, which can
be accessed at http://www.blackrock.com. This reference to BlackRock’s
website is intended to allow investors public access to information regard-
ing the Funds and does not, and is not intended to, incorporate BlackRock’s
website into this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ web-
sites or shareholders can sign up for e-mail notifications of quarterly state-
ments, annual and semi-annual reports by enrolling in the Funds’ electronic
delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks
or Brokerages:

Please contact your financial advisor to enroll. Please note that not all
investment advisors, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, including
annual and semi-annual reports and proxy statements, to shareholders
with multiple accounts at the same address. This practice is commonly
called “householding” and it is intended to reduce expenses and eliminate
duplicate mailings of shareholder documents. Mailings of your shareholder
documents may be householded indefinitely unless you instruct us other-
wise. If you do not want the mailing of these documents to be combined
with those for other members of your household, please contact the Funds
at (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (“SEC”) for the first and third quar-
ters of each fiscal year on Form N-Q. Each Fund’s Forms N-Q are available
on the SEC’s website at http://www.sec.gov and may also be reviewed and
copied at the SEC’s Public Reference Room in Washington, DC. Information
on the operation of the Public Reference Room may be obtained by calling
(202) 551-8090. Each Fund’s Forms N-Q may also be obtained upon
request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to deter-
mine how to vote proxies relating to portfolio securities is available (1) with-
out charge, upon request, by calling toll-free (800) 441-7762; (2) at
www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how each Fund voted proxies relating to securities
held in each Fund’s portfolio during the most recent 12-month period
ended June 30 is available upon request and without charge (1) at
www.blackrock.com or by calling (800) 441-7762 and (2) on the
SEC’s website at http://www.sec.gov.

ANNUAL REPORT OCTOBER 31, 2009 73


Additional Information (concluded)               
     Section 19(a) Notices                 
These reported amounts and sources of distributions are estimates and are not being provided for tax reporting purposes. The actual amounts and sources 
for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regula- 
tions. Each Fund will provide a Form 1099-DIV each calendar year that will explain the character of these dividends and distributions for federal income 
tax purposes.                 
October 31, 2009                 
    Total Cumulative Distributions    % Breakdown of the Total Cumulative 
    for the Fiscal Year      Distributions for the Fiscal Year   
  Net  Net Realized    Total Per  Net  Net Realized    Total Per 
  Investment  Capital  Return of  Common  Investment  Capital  Return of  Common 
  Income  Gains  Capital  Share  Income  Gains  Capital  Share 
PSW  $0.814362  $ —  $0.141238  $0.955600  85%  0%  15%  100% 
PSY  $1.033169  $ —  $0.083912  $1.117081  92%  0%  8%  100% 
BPP  $1.075354  $ —  $0.102146  $1.177500  91%  0%  9%  100% 
BTZ.  $0.934658  $ —  $0.475342  $1.410000  66%  0%  34%  100% 
CII  $0.329222  $ —  $1.610778  $1.940000  17%  0%  83%  100% 
BGT  $1.379018  $ —  $0.233111  $1.612129  86%  0%  14%  100% 
Each Fund estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be 
a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in a Fund is returned to the shareholder. 
A return of capital does not necessarily reflect a Fund’s investment performance and should not be confused with ‘yield’ or ‘income.     

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former
fund investors and individual clients (collectively, “Clients”) and to safe-
guarding their non-public personal information. The following information is
provided to help you understand what personal information BlackRock col-
lects, how we protect that information and why in certain cases we share
such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and
about you from different sources, including the following: (i) information we
receive from you or, if applicable, your financial intermediary, on applica-
tions, forms or other documents; (ii) information about your transactions
with us, our affiliates, or others; (iii) information we receive from a consumer
reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-
public personal information about its Clients, except as permitted by law
or as is necessary to respond to regulatory requests or to service Client
accounts. These non-affiliated third parties are required to protect the
confidentiality and security of this information and to use it only for its
intended purpose.

We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services
that may be of interest to you. In addition, BlackRock restricts access
to non-public personal information about its Clients to those BlackRock
employees with a legitimate business need for the information. BlackRock
maintains physical, electronic and procedural safeguards that are designed
to protect the non-public personal information of its Clients, including pro-
cedures relating to the proper storage and disposal of such information.

74 ANNUAL REPORT OCTOBER 31, 2009



This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation
of future performance. PSW, PSY, BPP, BTZ and BGT leverage their Common Shares, which creates risk for Common Shareholders, including the likelihood of
greater volatility of net asset value and market price of Common Shares, and the risk that fluctuations in short-term interest rates may reduce the Common
Shares’ yield. Statements and other information herein are as dated and are subject to change.



Item 2 – Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end
of the period covered by this report, applicable to the registrant’s principal executive officer,
principal financial officer and principal accounting officer, or persons performing similar
functions. During the period covered by this report, there have been no amendments to or
waivers granted under the code of ethics. A copy of the code of ethics is available without
charge at www.blackrock.com.

Item 3 – Audit Committee Financial Expert – The registrant’s board of directors or trustees, as
applicable (the “board of directors”) has determined that (i) the registrant has the following
audit committee financial experts serving on its audit committee and (ii) each audit
committee financial expert is independent:
Kent Dixon
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards
qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

Prof. Kester has a thorough understanding of generally accepted accounting principles,
financial statements and internal control over financial reporting as well as audit committee
functions. Prof. Kester has been involved in providing valuation and other financial
consulting services to corporate clients since 1978. Prof. Kester’s financial consulting
services present a breadth and level of complexity of accounting issues that are generally
comparable to the breadth and complexity of issues that can reasonably be expected to be
raised by the registrant’s financial statements.

Ms. Robards has a thorough understanding of generally accepted accounting principles,
financial statements and internal control over financial reporting as well as audit committee
functions. Ms. Robards has been President of Robards & Company, a financial advisory
firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years
where she was responsible for evaluating and assessing the performance of companies based
on their financial results. Ms. Robards has over 30 years of experience analyzing financial
statements. She also is a member of the audit committee of one publicly held company and
a non-profit organization.

Under applicable securities laws, a person determined to be an audit committee financial
expert will not be deemed an “expert” for any purpose, including without limitation for the
purposes of Section 11 of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation or identification as an
audit committee financial expert does not impose on such person any duties, obligations, or
liabilities greater than the duties, obligations, and liabilities imposed on such person as a
member of the audit committee and board of directors in the absence of such designation or
identification.


Item 4 – Principal Accountant Fees and Services           
           (a) Audit Fees   (b) Audit-Related Fees1             (c) Tax Fees2       (d) All Other Fees3 
  Current  Previous  Current  Previous  Current  Previous  Current  Previous 
  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year 
Entity Name  End  End  End  End  End  End  End  End 
BlackRock Floating                 
Rate Income Trust  $52,300  $49,300  $3,500  $3,500  $6,100  $6,100  $1,028  $1,049 

1 The nature of the services include assurance and related services reasonably related to the performance of the audit of
financial statements not included in Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax planning.
3 The nature of the services include a review of compliance procedures and attestation thereto.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant’s audit committee (the “Committee”) has adopted policies and
procedures with regard to the pre-approval of services. Audit, audit-related and tax
compliance services provided to the registrant on an annual basis require specific pre-
approval by the Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the registrant’s affiliated
service providers that relate directly to the operations and the financial reporting of the
registrant. Certain of these non-audit services that the Committee believes are a) consistent
with the SEC’s auditor independence rules and b) routine and recurring services that will
not impair the independence of the independent accountants may be approved by the
Committee without consideration on a specific case-by-case basis (“general pre-approval”).
The term of any general pre-approval is 12 months from the date of the pre-approval, unless
the Committee provides for a different period. Tax or other non-audit services provided to
the registrant which have a direct impact on the operation or financial reporting of the
registrant will only be deemed pre-approved provided that any individual project does not
exceed $10,000 attributable to the registrant or $50,000 for all of the registrants the
Committee oversees. For this purpose, multiple projects will be aggregated to determine if
they exceed the previously mentioned cost levels.
Any proposed services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject to general pre-
approval (e.g., unanticipated but permissible services). The Committee is informed of each
service approved subject to general pre-approval at the next regularly scheduled in-person
board meeting. At this meeting, an analysis of such services is presented to the Committee
for ratification. The Committee may delegate to one or more of its members the authority to
approve the provision of and fees for any specific engagement of permitted non-audit
services, including services exceeding pre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by
the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) Affiliates’ Aggregate Non-Audit Fees:

  Current Fiscal Year  Previous Fiscal Year 
               Entity Name  End  End 
BlackRock Floating Rate  $418,128  $415,649 
Income Trust     

(h) The registrant’s audit committee has considered and determined that the provision of


non-audit services that were rendered to the registrant’s investment adviser (not including
any non-affiliated sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant’s investment adviser), and any entity
controlling, controlled by, or under common control with the investment adviser that
provides ongoing services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant’s independence.

Regulation S-X Rule 2-01(c)(7)(ii) – $407,500, 0%

Item 5 – Audit Committee of Listed Registrants – The following individuals are members of the
registrant’s separately-designated standing audit committee established in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

Kent Dixon
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)

Item 6 – Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to
Stockholders filed under Item 1 of this form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since
the previous Form N-CSR filing.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies – The board of directors has delegated the voting of proxies for the
Fund securities to the Fund’s investment adviser (“Investment Adviser”) pursuant to the
Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment
Adviser will vote proxies related to Fund securities in the best interests of the Fund and its
stockholders. From time to time, a vote may present a conflict between the interests of the
Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated
person of the Fund or the Investment Adviser, on the other. In such event, provided that the
Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee
thereof (the “Oversight Committee”) is aware of the real or potential conflict or material
non-routine matter and if the Oversight Committee does not reasonably believe it is able to
follow its general voting guidelines (or if the particular proxy matter is not addressed in the
guidelines) and vote impartially, the Oversight Committee may retain an independent
fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the
Investment Adviser’s clients. If the Investment Adviser determines not to retain an
independent fiduciary, or does not desire to follow the advice of such independent fiduciary,
the Oversight Committee shall determine how to vote the proxy after consulting with the
Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal
and Compliance Department and concluding that the vote cast is in its client’s best interest
notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are
attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30 is available
without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at
http://www.sec.gov.


Item 8 – Portfolio Managers of Closed-End Management Investment Companies – as of October 31,
2009.

(a)(1) The registrant (or “Fund”) is managed by a team of investment professionals
comprised of Leland T. Hart, Managing Director at BlackRock, James E. Keenan,
Managing Director at BlackRock and C. Adrian Marshall, Director at BlackRock.
Messrs. Hart, Keenan and Marshall are the Fund’s co-portfolio managers and are
responsible for the day-to-day management of the Fund’s portfolio and the selection
of its investments. Mr. Keenan has been a member of the Fund’s management team
since 2007. Messrs. Hart and Marshall have been members of the Fund’s

management team since 2009.         
             Portfolio Manager  Biography         
             Leland T. Hart    Managing Director of BlackRock, Inc. since 2009; Partner of R3 Capital 
    Partners ("R3") in 2009; Managing Director of R3 from 2008 - 2009; 
    Managing Director of Lehman Brothers from 2006 - 2008; Executive 
    Director of Lehman Brothers from 2003 - 2006.     
             James E. Keenan    Managing Director of BlackRock, Inc. since 2008; Director of BlackRock, 
    Inc. from 2004 - 2008; Head of the Leveraged Finance Portfolio team; 
    senior high yield trader at Columbia Management from 2003 to 2004. 
             C. Adrian Marshall  Director of BlackRock, Inc. since 2007; Vice President of BlackRock, Inc. 
    from 2004 - 2007.         
             (a)(2) As of October 31, 2009:         
  (ii) Number of Other Accounts Managed  (iii) Number of Other Accounts and 
  and Assets by Account Type  Assets for Which Advisory Fee is 
          Performance-Based   
  Other  Other Pooled    Other  Other Pooled   
(i) Name of  Registered  Investment  Other  Registered  Investment  Other 
Portfolio Manager  Investment  Vehicles  Accounts  Investment  Vehicles  Accounts 
  Companies      Companies     
Leland T. Hart  8  0  0  0  0  0 
  $1.84 Billion  $0  $0  $0  $0  $0 
James E. Keenan  22  21  47  0  10  6 
  $8.27 Billion  $6.26 Billion  $5.18 Billion  $0  $4.14 Billion  $653 Million 
C. Adrian Marshall  8  14  5  0  9  0 
  $2.26 Billion  $4.85 Billion  $667.5 Million  $0  $4.1 Billion  $0 
             (iv) Potential Material Conflicts of Interest       

BlackRock and its affiliates (collectively, herein “BlackRock”) has built a professional
working environment, firm-wide compliance culture and compliance procedures and
systems designed to protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address the allocation of
investment opportunities, execution of portfolio transactions, personal trading by employees
and other potential conflicts of interest that are designed to ensure that all client accounts are
treated equitably over time. Nevertheless, BlackRock furnishes investment management and
advisory services to numerous clients in addition to the Fund, and BlackRock may,
consistent with applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have performance or higher fees
paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of


such fees), which may be the same as or different from those made to the Fund. In addition,
BlackRock, its affiliates and significant shareholders and any officer, director, stockholder
or employee may or may not have an interest in the securities whose purchase and sale
BlackRock recommends to the Fund. BlackRock, or any of its affiliates or significant
shareholders, or any officer, director, stockholder, employee or any member of their
families may take different actions than those recommended to the Fund by BlackRock with
respect to the same securities. Moreover, BlackRock may refrain from rendering any advice
or services concerning securities of companies of which any of BlackRock’s (or its
affiliates’ or significant shareholders’) officers, directors or employees are directors or
officers, or companies as to which BlackRock or any of its affiliates or significant
shareholders or the officers, directors and employees of any of them has any substantial
economic interest or possesses material non-public information. Each portfolio manager
also may manage accounts whose investment strategies may at times be opposed to the
strategy utilized for a fund. In this connection, it should be noted that Messrs. Keenan and
Marshall currently manage certain accounts that are subject to performance fees. In
addition, Mr. Keenan assists in managing certain hedge funds and may be entitled to receive
a portion of any incentive fees earned on such funds and a portion of such incentive fees
may be voluntarily or involuntarily deferred. Additional portfolio managers may in the
future manage other such accounts or funds and may be entitled to receive incentive fees.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client
fairly. When BlackRock purchases or sells securities for more than one account, the trades
must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to
allocate investments in a fair and equitable manner among client accounts, with no account
receiving preferential treatment. To this end, BlackRock has adopted a policy that is
intended to ensure that investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve reasonable efficiency in client
transactions and provide BlackRock with sufficient flexibility to allocate investments in a
manner that is consistent with the particular investment discipline and client base.

(a)(3) As of October 31, 2009:

Portfolio Manager Compensation Overview

BlackRock’s financial arrangements with its portfolio managers, its competitive
compensation and its career path emphasis at all levels reflect the value senior management
places on key resources. Compensation may include a variety of components and may vary
from year to year based on a number of factors. The principal components of compensation
include a base salary, a performance-based discretionary bonus, participation in various
benefits programs and one or more of the incentive compensation programs established by
BlackRock such as its Long-Term Retention and Incentive Plan and Restricted Stock
Program.

Base compensation. Generally, portfolio managers receive base compensation based on
their seniority and/or their position with the firm. Senior portfolio managers who perform
additional management functions within the portfolio management group or within
BlackRock may receive additional compensation for serving in these other capacities.

Discretionary Incentive Compensation
Discretionary incentive compensation is a function of several components: the performance
of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock,


the investment performance, including risk-adjusted returns, of the firm’s assets under
management or supervision by that portfolio manager relative to predetermined
benchmarks, and the individual’s seniority, role within the portfolio management team,
teamwork and contribution to the overall performance of these portfolios and BlackRock.
In most cases, including for the portfolio managers of the Fund, these benchmarks are the
same as the benchmark or benchmarks against which the performance of the Fund or other
accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment
Officers determine the benchmarks against which the performance of funds and other
accounts managed by each portfolio manager is compared and the period of time over which
performance is evaluated. With respect to the portfolio managers, such benchmarks include
the following:

  Portfolio Manager  Benchmarks Applicable to Each Manager 
  Leland T. Hart  A combination of market-based indices (e.g., CSFB Leveraged Loan 
 

Index, CSFB High Yield II Value Index), certain customized indices and certain fund industry peer groups.

  James E. Keenan  A combination of market-based indices (e.g., The Barclays Capital U.S. 
 

Corporate High Yield 2% Issuer Cap Index), certain customized indices and certain fund industry peer groups.

  C. Adrian Marshall  A combination of market-based indices (e.g., CSFB Leveraged Loan 
 

Index, CSFB High Yield II Value Index), certain customized indices and certain fund industry peer groups.


BlackRock’s Chief Investment Officers make a subjective determination with respect to the
portfolio managers’ compensation based on the performance of the funds and other accounts
managed by each portfolio manager relative to the various benchmarks noted above.
Performance is measured on both a pre-tax and after-tax basis over various time periods
including 1, 3, 5 and 10-year periods, as applicable.

Distribution of Discretionary Incentive Compensation
Discretionary incentive compensation is distributed to portfolio managers in a combination
of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of
years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in
BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base
salary, represents more than 60% of total compensation for the portfolio managers. Paying
a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a
given year “at risk” based on BlackRock’s ability to sustain and improve its performance
over future periods.

Long-Term Retention and Incentive Plan (“LTIP”) — The LTIP is a long-term
incentive plan that seeks to reward certain key employees. Prior to 2006, the plan provided
for the grant of awards that were expressed as an amount of cash that, if properly vested and
subject to the attainment of certain performance goals, will be settled in cash and/or in
BlackRock, Inc. common stock. Beginning in 2006, awards are granted under the LTIP in
the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the
attainment of certain performance goals, will be settled in BlackRock, Inc. common stock.
Messrs. Keenan and Marshall have each received awards under the LTIP.

Deferred Compensation Program — A portion of the compensation paid to
eligible BlackRock employees may be voluntarily deferred into an account that tracks the
performance of certain of the firm’s investment products. Each participant in the deferred


compensation program is permitted to allocate his deferred amounts among the various
investment options. Messrs. Keenan and Marshall have each participated in the deferred
compensation program.

Other compensation benefits. In addition to base compensation and discretionary
incentive compensation, portfolio managers may be eligible to receive or participate in one
or more of the following:

Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive
savings plans in which BlackRock employees are eligible to participate, including a
401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee
Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a
company match equal to 50% of the first 6% of eligible pay contributed to the plan capped
at $4,000 per year, and a company retirement contribution equal to 3-5% of eligible
compensation. The RSP offers a range of investment options, including registered
investment companies managed by the firm. BlackRock contributions follow the investment
direction set by participants for their own contributions or, absent employee investment
direction, are invested into a balanced portfolio. The ESPP allows for investment in
BlackRock common stock at a 5% discount on the fair market value of the stock on the
purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares
or a dollar value of $25,000. Each portfolio manager is eligible to participate in these plans.

(a)(4) Beneficial Ownership of Securities – October 31, 2009.

Portfolio Manager  Dollar Range of Equity Securities 
  Beneficially Owned 
Leland T. Hart  None 
James E. Keenan  None 
C. Adrian Marshall  None 

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers – Not Applicable due to no such purchases during the period covered
by this report.

Item 10 – Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and
Governance Committee will consider nominees to the board of directors recommended by
shareholders when a vacancy becomes available. Shareholders who wish to recommend a
nominee should send nominations that include biographical information and set forth the
qualifications of the proposed nominee to the registrant’s Secretary. There have been no
material changes to these procedures.

Item 11 – Controls and Procedures

11(a) –  The registrant’s principal executive and principal financial officers or persons performing 
  similar functions have concluded that the registrant’s disclosure controls and procedures (as 
  defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the 
  “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the 
  evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act 
  and Rule 13(a)-15(b) under the Securities Exchange Act of 1934, as amended. 
11(b) –  There were no changes in the registrant’s internal control over financial reporting (as 
  defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter 


of the period covered by this report that have materially affected, or are reasonably likely to
materially affect, the registrant’s internal control over financial reporting.

Item 12 – Exhibits attached hereto

12(a)(1) – Code of Ethics – See Item 2

12(a)(2) – Certifications – Attached hereto

12(a)(3) – Not Applicable

12(b) – Certifications – Attached hereto

12(c) – Not Applicable


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

BlackRock Floating Rate Income Trust

By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer of
BlackRock Floating Rate Income Trust

Date: December 21, 2009

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

By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
BlackRock Floating Rate Income Trust

Date: December 21, 2009

By: /s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Floating Rate Income Trust

Date: December 21, 2009