--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
May 31, 2002
Dear Shareholder:
The semi-annual period ended April 30, 2002, saw general turmoil in the
equity markets. However, during this time bond markets, particularly municipal
securities, proved to be a shelter for investors seeking refuge from unstable
economic conditions. Over the period, municipal bonds outperformed Treasuries
returning 1.08% versus -1.88%, respectively, as measured by the LEHMAN BROTHERS
MUNICIPAL BOND INDEX* and LEHMAN BROTHERS TREASURY INDEX.**
During the six-month period, the bond market was not without volatility. In
the aftermath of the September 11th tragedy, the Federal Reserve Board (the
"Fed") lowered interest rates four times before the year ended. Since bond
prices generally move in the opposite direction from interest rates, this
aggressive action initially sent bond yields downward and prices (and returns)
markedly higher.
For the first quarter of 2002, issues of new municipal securities increased
by 10%, totaling $65 billion, setting a record for the largest first quarter
issuance in history. Due in part to budgetary pressures, a slowing economy, and
municipalities' ongoing need to finance infrastructure projects, the final month
of the period continued to see heightened levels of new issuance and
year-to-date volume has now reached $87 billion. In March, fixed income markets
suffered following the Fed's announcement of a bias shift from "potential
weakness" to "neutral," which led the investment community to anticipate an
economy in the early stages of recovery. Despite higher than expected
unemployment numbers during April, economic indicators generally concluded the
period on a more positive tone than they began. U.S. manufacturing, as measured
by the ISM (Institute for Supply Management) Index, remained at expansionary
levels in April and the Consumer Confidence Index has bounced from its November
low on increasing expectations. However, we remain cautious that the strong
consumer demand, which has created an increasingly optimistic stimulus, may
become exhausted and slow.
Interest rate fluctuations, such as we have seen recently can be difficult
for investors, especially those who depend on fixed income investments for
current income. We encourage you to consult with your financial advisor to help
you establish a strategy that best fits your overall goals and risk tolerance.
The semi-annual report includes a summary of market conditions over the
period, a review of the strategy employed by your Trust's portfolio managers,
the Trust's unaudited financial statements and a listing of the portfolio's
holdings. We encourage you to read the report and we thank you for making
BlackRock part of your investment program.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
----------
* The Lehman Brothers Municipal Bond Index measures the performance of the
investment grade long-term tax-exempt bond market. The Index is unmanaged and
cannot be purchased directly.
** The Lehman Brothers Treasury Index measures the performance of the public
obligations of the U.S. Treasury. The Index is unmanaged and cannot be
purchased directly.
1
May 31, 2002
Dear Shareholder:
We are pleased to present the unaudited semi-annual report for The
BlackRock Investment Quality Municipal Trust Inc. (the "Trust") for the period
ended April 30, 2002. We would like to take this opportunity to review the
Trust's stock price and net asset value (NAV) performance, summarize
developments in the fixed income markets and discuss recent portfolio management
activity.
The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BKN". The
Trust's investment objective is to provide high current income that is exempt
from regular Federal income tax consistent with the preservation of capital. The
Trust seeks to achieve this objective by investing in investment grade (rated
"AAA" to "BBB" by a major rating agency or of equivalent quality) tax-exempt
general obligation and revenue bonds issued by city, county and state
municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and net
asset value:
---------------------------------------------------
4/30/02 10/31/01 CHANGE HIGH LOW
--------------------------------------------------------------------------------
STOCK PRICE $13.45 $13.73 (2.04)% $13.85 $13.01
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $14.87 $15.19 (2.11)% $15.35 $14.65
--------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
Economic performance was mixed during the semi-annual period although
increasingly positive economic data surfaced as time progressed. The U.S.
economy showed signs of a rebound on the heels of strong consumer and military
spending, which helped to overcome the devastation of September 11th. The Fed
also provided further monetary stimulus by cutting interest rates two additional
times prior to year-end, leaving the federal funds rate at 1.75%. This was in
addition to nine previous interest rate reductions by the Fed during 2001. The
Consumer Confidence Index initially reached its lowest level in eight years
during November, but marked a steady climb during the remainder of the period as
investors readily anticipated an economic recovery. The economy continued to see
increasingly optimistic data emerge throughout the first quarter of 2002. Gross
Domestic Product ("GDP") during the first quarter rose 5.6%, the fastest rate in
two years, and the manufacturing sector saw substantial gains as the Purchasing
Managers Index indicated expansion for the first time in 19 months. Although
productivity increased 8.6% during the first quarter, unemployment in April
reached 6.0%. However, the unexpectedly high unemployment number is believed to
be a result of recent legislation prompting many to apply for extended benefits.
After surprising growth in the first quarter of 2002, the fixed income markets
came under pressure following the March 19th announcement by the Federal Open
Market Committee ("FOMC") to leave rates steady, citing a bias shift from
"potential weakness" to "neutral." The equity markets did not significantly
benefit from the emergence of the strong growth indicators as they were
challenged by several high profile bankruptcies. Closing out the period, April
saw the largest advancement in retail sales in six months and inflationary
pressures remain relatively in check. However, concerns regarding the corporate
environment and violence in the Middle East and Asia have left many investors
apprehensive about the markets. Going forward, although low inventory levels
should continue to provide support for manufacturing data, concerns exist
surrounding the long-term strength of the highly leveraged consumer.
Following a steepening of the yield curve throughout the majority of 2001,
yields over the period trended higher causing the curve to flatten. Signs of a
recovering economy caused yields to rise in sympathy with expectations of a
higher fed funds rate by year-end. The 5- to 10-year portion of the yield curve
came under the most pressure, rising 93 and 86 basis points, respectively,
during the period. Yields on 2- and 30-year maturities also suffered during the
period rising 80 and 72 basis points, respectively. After struggling following
the FOMC's announcement of a bias shift in March, Treasuries bounced back in
April. April's performance was driven by economic pessimism, which surfaced as
enthusiasm for a rapid economic recovery waned amidst tensions in the Middle
East, cautious corporate earnings announcements and government reports of a
slower growth pattern. Looking ahead, a budget surplus of only $78 billion and a
30% decline in tax revenues for 2001 has caused Treasury finances
2
to deteriorate sharply and should result in larger auction sizes. However, the
allowable debt limit set by Congress will soon be reached, possibly leading the
Treasury to pursue additional methods of financing. As of April 30, 2002, the
10-year Treasury was yielding 5.09% versus 4.23% on October 31, 2001.
On a tax-adjusted basis, municipal bonds outperformed the taxable domestic
bond market for the semi-annual period ended April 30, 2002, returning 1.76% (as
measured by the LEHMAN BROTHERS MUNICIPAL BOND INDEX at a tax bracket of 38.6%)
versus -0.01% for the LEHMAN BROTHERS AGGREGATE INDEX. Strong institutional and
retail demand for municipal bonds allowed the sector to show outperformance
versus Treasuries across the entire curve. Demand was driven primarily by two
factors: yields on municipal securities remain attractive versus alternative
fixed income investments, and continued volatility in the equity markets led
investors to seek diversification. Strong demand was met by significant new
issuance as the first quarter of 2002 posted a 10% increase over the same period
in 2001 and was the largest first quarter total on record. In April, new bond
issuance continued its strong trend with a 12% increase from a year earlier,
bringing total year-to-date issuance to $87 billion. Similar to Treasuries, the
municipal yield curve flattened over the period as yields on short to
intermediate maturities rose more quickly than long-term rates.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons.
Additionally, the Trust employs leverage to enhance its income by borrowing
at short-term municipal rates and investing the proceeds in longer maturity
issues that have higher yields. The degree to which the Trust can benefit from
its use of leverage may affect its ability to pay high monthly income. At the
end of the semi-annual period, the Trust's leverage amount was approximately 36%
of total assets.
Municipals outperformed Treasuries for the period due to strong retail
demand despite record issuance. The curve flattened over the period as rates at
the short end of the curve rose rapidly in anticipation of the Fed raising rates
in an economic recovery. Rates at the long end of the curve rose moderately and
the curve remains steep on a historical basis. We continue to focus on bonds
with higher coupons as they provide the most attractive income stream and also
tend to have superior performance in a rising rate environment.
The following charts show the Trust's asset composition and credit quality
allocations:
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SECTOR BREAKDOWN
--------------------------------------------------------------------------
SECTOR APRIL 30, 2002 OCTOBER 31, 2001
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Transportation 14% 19%
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School 14% 14%
--------------------------------------------------------------------------
Hospital 13% 12%
--------------------------------------------------------------------------
Industrial & Pollution Control 12% 12%
--------------------------------------------------------------------------
City, County & State 11% 12%
--------------------------------------------------------------------------
Other 8% 3%
--------------------------------------------------------------------------
Power 7% 7%
--------------------------------------------------------------------------
Lease Revenue 7% 8%
--------------------------------------------------------------------------
Tax Revenue 5% 4%
--------------------------------------------------------------------------
Housing 5% 5%
--------------------------------------------------------------------------
District 2% 2%
--------------------------------------------------------------------------
Water & Sewer 1% 1%
--------------------------------------------------------------------------
Resource Recovery 1% 1%
--------------------------------------------------------------------------
3
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CREDIT RATING* APRIL 30, 2002 OCTOBER 31, 2001
--------------------------------------------------------------------------
AAA/Aaa 57% 61%
--------------------------------------------------------------------------
AA/Aa 11% 11%
--------------------------------------------------------------------------
A/A 18% 16%
--------------------------------------------------------------------------
BBB/Baa 8% 6%
--------------------------------------------------------------------------
BB/Ba 2% 2%
--------------------------------------------------------------------------
Not Rated 4% 4%
--------------------------------------------------------------------------
----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
We look forward to continuing to manage the Trust to benefit from the
opportunities available to investors in the investment grade municipal market.
We thank you for your investment and continued interest in The BlackRock
Investment Quality Municipal Trust Inc. Please feel free to call our marketing
center at (800) 227-7BFM (7236) if you have any specific questions which were
not addressed in this report.
Sincerely,
/s/ Robert S. Kapito /s/ Kevin M. Klingert
Robert S. Kapito Kevin M. Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
4
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THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BKN
--------------------------------------------------------------------------------
Initial Offering Date: February 19, 1993
--------------------------------------------------------------------------------
Closing Stock Price as of 4/30/02: $13.45
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/02: $14.87
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/02 ($13.45)(1): 5.80%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share(2): $ 0.0650
--------------------------------------------------------------------------------
Current Annualized Distribution per Share(2): $ 0.7800
--------------------------------------------------------------------------------
(1) Yield on closing stock price is calculated by dividing the current
annualized distribution per share by the closing stock price.
(2) The distribution is not constant and is subject to change.
PRIVACY PRINCIPLES OF THE TRUST
The Trust is committed to maintaining the privacy of shareholders and to
safeguarding its non-public personal information. The following information is
provided to help you understand what personal information the Trust collects,
how we protect that information and why, in certain cases, we may share
information with select other parties.
Generally, the Trust does not receive any non-public personal information
relating to its shareholders, although certain nonpublic personal information of
its shareholders may become available to the Trust. The Trust does not disclose
any non-public personal information about its shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Trust restricts access to non-public personal information about the
shareholders to BlackRock employees with a legitimate business need for the
information. The Trust maintains physical, electronic and procedural safeguards
designed to protect the non-public personal information of its shareholders.
5
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THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST, INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 2002 (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--159.3%
ALABAMA--5.9%
AAA $14,000 University of Alabama Hosp. Rev., Ser. A, 5.875%, 9/01/31, MBIA .................... 9/10 @ 101 $ 14,567,700
------------
ALASKA--2.5%
AAA 6,015 Alaska St. Hsg. Fin. Corp. Rev., Ser. A, 5.875%, 12/01/24, MBIA .................... 12/05 @ 102 6,118,879
------------
CALIFORNIA--15.5%
Aa2 1,220 California Hsg. Fin. Agcy. Rev., Home Mtg., Ser. C, 5.65%, 8/01/14 ................. 2/04 @ 102 1,246,633
AA 5,770 California St., G.O., 5.625%, 5/01/18 .............................................. 5/10 @ 101 6,034,208
BBB 3,000 Foothill/Eastn. Transp. Corridor Agcy. Toll Road Rev., 5.75%, 1/15/40 .............. 1/10 @ 101 2,973,900
AAA 10,945 Los Altos Sch. Dist., G.O., Zero Coupon, 8/01/24, MBIA ............................. 8/13 @ 53.632 2,995,975
AAA 15,460 Los Angeles Cnty. Asset Leasing Corp. Rev., 5.95%, 12/01/07, AMBAC ................. No Opt. Call 17,511,851
University of California Rev., Research Fac., Ser. B,
Aaa 2,000++ 6.10%, 9/01/03 ................................................................... N/A 2,151,060
Aaa 3,305++ 6.20%, 9/01/03 ................................................................... N/A 3,558,923
Aaa 2,000++ 6.25%, 9/01/03 ................................................................... N/A 2,154,980
------------
38,627,530
------------
COLORADO--3.9%
AAA 3,100 Arapahoe Cnty. Cap. Impvt. Hwy. Rev., Trust Fund, Ser. E, Zero Coupon, 8/31/04 ..... ETM 2,899,709
Denver City & Cnty. Arpt. Rev., Ser. C,
A+ 3,000 6.50%, 11/15/06 .................................................................. 11/02 @ 102 3,103,890
A+ 1,120 6.65%, 11/15/05 .................................................................. 11/02 @ 102 1,160,634
AAA 2,250++ E-470 Pub. Hwy. Auth. Rev., Ser. B, 6.90%, 8/31/05 ................................. N/A 2,598,660
------------
9,762,893
------------
CONNECTICUT--1.1%
Baa3 3,000+++ Mashantucket Western Pequot Tribe, Spl. Rev., Ser. A, 5.50%, 9/01/28 ............... 9/09 @ 101 2,836,590
------------
DELAWARE--3.0%
NR 7,000+++ Charter Mac Equity Issuer Trust, Ser. B, 7.60%, 11/30/50 ........................... 11/10 @ 100 7,428,750
------------
DISTRICT OF COLUMBIA--0.8%
District of Columbia, G.O., Ser. E, CAPMAC,
AAA 195++ 6.00%, 6/01/03 ................................................................... N/A 207,394
AAA 1,705 6.00%, 6/01/09 ................................................................... 6/03 @ 102 1,801,418
------------
2,008,812
------------
FLORIDA--5.0%
AAA 1,525 Florida Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtg., Ser. 1994-A,
6.55%, 7/01/14, GNMA ............................................................. 1/05 @ 102 1,591,932
A- 3,250 Highlands Cnty. Hlth. Facs. Auth. Rev., Hosp. Adventist/Sunbelt, Ser. A,
6.00%, 11/15/31 .................................................................. 11/11 @ 101 3,274,115
NR 3,700 Hillsborough Cnty. Ind. Dev. Auth. Fac. Rev., National Gypsum, Ser. A,
7.125%, 4/01/30 .................................................................. 4/10 @ 101 3,099,416
BB- 4,000 Santa Rosa Bay Bridge Auth. Rev., 6.25%, 7/01/28 ................................... 7/06 @ 102 2,503,240
A+ 2,000 So. Broward Hosp. Dist. Rev., 5.60%, 5/01/27 ....................................... 5/12 @ 101 1,968,520
------------
12,437,223
------------
HAWAII--1.1%
AAA 2,500 Hawaii St. Dept. Budget & Fin. Spl. Purp. Rev., Hawaiian Elec. Co. Inc., Ser. D,
6.15%, 1/01/20, AMBAC ............................................................ 1/09 @ 101 2,696,475
------------
See Notes to Financial Statements.
6
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PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS--15.0%
AAA $10,000 Chicago Brd. of Ed., Chicago Sch. Reform, 5.75%, 12/01/27, AMBAC ................... 12/07 @ 102 $ 10,416,900
------------
AAA 5,000 Chicago Pub. Bldg., Rev., Ser. A, 7.00%, 1/01/20, MBIA ............................. ETM 6,197,650
AAA 5,050 Chicago Wtr. Rev., 5.25%, 11/01/23, FGIC ........................................... 11/07 @ 102 5,046,768
Illinois Edl. Fac. Auth. Rev., Loyola Univ., FGIC,
AAA 4,000++ 5.45%, 7/01/05 ................................................................... N/A 4,192,280
AAA 5,000++ 5.70%, 7/01/05 ................................................................... N/A 5,257,600
AAA 10,000 Illinois Sports Facs. Auth. St., Zero Coupon, 6/15/30, AMBAC ....................... 6/15 @ 101 6,248,600
------------
37,359,798
------------
INDIANA--3.1%
BBB 7,420 Indianapolis Arpt. Auth. Rev., Spl. Fac. Fed. Express Corp. Proj.,
7.10%, 1/15/17 ................................................................... 7/04 @ 102 7,806,360
------------
KENTUCKY--8.3%
AAA 15,715 Kentucky Econ. Dev. Fin. Sys., Norton Hlth. Care Inc., Ser. B,
Zero Coupon, 10/01/23, MBIA ...................................................... No Opt. Call 4,807,061
AAA 15,000++ Kentucky St. Tpke. Auth., Econ. Dev. Road Rev., 5.75%, 7/01/03, AMBAC .............. N/A 15,933,300
------------
20,740,361
------------
LOUISIANA--12.6%
AAA 14,400++ Louisiana Pub. Fac. Auth. Hosp. Rev., Our Lady of the Lake Regl. Med. Ctr.,
5.90%, 12/01/03, FSA ............................................................. N/A 15,532,704
AAA 4,640 New Orleans Pub. Impvt., G.O., 5.875%, 11/01/29, FSA ............................... 11/09 @ 100 4,867,639
A1 12,000 Tobacco Settlement Fin. Corp. Rev., Ser. 2001 B, 5.875%, 5/15/39 ................... 5/11 @ 101 10,815,840
------------
31,216,183
------------
MARYLAND--6.4%
Aa2 7,960 Maryland St. Dept. Hsg. & Cmnty. Dev. Admin., Sngl. Fam. Prog., Ser. 2,
6.55%, 4/01/26 ................................................................... 4/05 @ 102 8,201,188
NR 4,000+++ MuniMae TE Bond Subsidiary LLC, , Ser. B, 7.75%, 6/30/50 ........................... 11/10 @ 100 4,255,400
AAA 3,175 Northeast Waste Disp. Auth. Rev., Sld. Wst., Montgomery Cnty. Res. Rec. Proj.,
Ser. A, 6.30%, 7/01/16, MBIA ..................................................... 7/03 @ 102 3,362,833
------------
15,819,421
------------
MASSACHUSETTS--1.2%
AAA 3,000 Massachusetts St. Hlth. & Edl. Fac. Auth. Rev., Hallmark Hlth. Sys., Ser. A,
5.00%, 7/01/21, FSA .............................................................. 7/08 @ 101 2,906,100
------------
MICHIGAN--0.8%
AAA 2,000 River Rouge Sch. Dist., 5.625%, 5/01/22, FSA ....................................... 5/03 @ 101.5 2,052,560
------------
MISSOURI--1.7%
Lake of the Ozarks Cmnty. Brdg. Corp., Brdg. Sys. Rev.,
BBB- 2,000 5.25%, 12/01/14 .................................................................. 12/08 @ 102 1,911,420
BBB- 2,500 5.25%, 12/01/26 .................................................................. 12/08 @ 102 2,290,225
------------
4,201,645
------------
NEVADA--1.6%
AAA 3,750 Washoe Cnty. Arpt. Auth., Arpt. Sys. Impvt. Rev., Ser. B,
5.80%, 7/01/09, MBIA ............................................................. 7/03 @ 102 3,936,600
------------
See Notes to Financial Statements.
7
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PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY--4.1%
AAA $ 2,000 Delaware River Port Auth. PA & NJ Port Dist. Proj., Ser. B,
5.70%, 1/01/22, FSA .............................................................. 1/10 @ 100 $ 2,106,360
AA 7,000++ New Jersey St. Transp. Trust Fund Auth. Sys. Rev., Transp. Sys., Ser. A,
6.00%, 6/15/10 ................................................................... N/A 7,967,050
------------
10,073,410
------------
NEW MEXICO--0.8%
AAA 1,945 Farmington, P.C.R., So. California Edison Co., Ser. A,
5.875%, 6/01/23, MBIA ............................................................ 6/03 @ 102 2,030,133
------------
NEW YORK--14.6%
New York City, G.O.,
A+ 4,140 Ser. A, 6.00%, 8/01/05 ........................................................... No Opt. Call 4,488,960
A+ 7,000 Ser. E, 6.50%, 2/15/06 ........................................................... No Opt. Call 7,724,570
New York City Ind. Dev. Agcy. Spec. Fac. Rev., Term. One Group. Assoc. Proj.,
A3 4,000 6.00%, 1/01/08 ................................................................... 1/04 @ 102 4,161,800
A3 1,000 6.00%, 1/01/15 ................................................................... 1/04 @ 102 1,024,270
AA+ 10,000 New York City Transl. Fin. Auth. Rev., Ser. B, 6.00%, 11/15/21 ..................... 5/10 @ 101 10,840,800
AAA 3,000++ New York St. Dorm. Auth. Rev., St. Univ. Edl. Fac., Ser. B, 6.10%, 5/15/04 ......... N/A 3,287,520
New York St. Dorm. Auth. Rev., Univ. of Rochester, Ser. A, MBIA,
AAA 1,865 Zero Coupon, 7/01/21 ............................................................. 7/10 @ 101 1,222,974
AAA 2,030 Zero Coupon, 7/01/23 ............................................................. 7/10 @ 101 1,327,072
A 1,955 New York St. Hsg. Fin. Agcy., Hlth. Fac. of New York City, Ser. A,
6.375%, 11/01/04 ................................................................. No Opt. Call 2,120,784
------------
36,198,750
------------
NORTH CAROLINA--2.3%
AAA 5,000 North Carolina Eastn. Mun. Pwr. Agcy. Sys. Rev., Ser. B,
7.00%, 1/01/08, CAPMAC ........................................................... No Opt. Call 5,807,050
------------
OHIO--0.2%
AAA 415 Cleveland Cuyahoga Cnty. Port Auth. Rev., Port Dev. Proj., 6.00%, 3/01/07 ........ ETM 445,399
------------
OREGON--2.3%
BBB- 5,600+++ Klamath Falls Elec. Rev., Sr. Lien-Klamath Cogen, 5.50%, 1/01/07 ................. No Opt. Call 5,649,728
------------
PENNSYLVANIA--10.4%
AAA 10,100 Lehigh Cnty. Gen. Purp. Auth. Rev., St. Lukes Hosp. Bethlehem Proj.,
5.50%, 11/15/13, AMBAC ........................................................... 11/03 @ 102 10,504,000
AAA 3,305 McKeesport Area Sch. Dist., Cap. Apprec., Zero Coupon, 10/01/31, FGIC .............. No Opt. Call 621,505
AAA 5,500 Montgomery Cnty. Edl. & Hlth. Care Auth., Holy Redeemer,
5.25%, 10/01/23, AMBAC ........................................................... 10/07 @ 101 5,478,825
AAA 4,000 Pennsylvania Intergovtl. Coop. Auth. Spl. Tax Rev., Philadelphia Fdg. Prog.,
5.50%, 6/15/20, FGIC ............................................................. 6/06 @ 100 4,077,280
Pennsylvania St. Higher Edl. Fac. Auth., Hlth. Svcs. Rev., Ser. A,
A 2,300 5.75%, 1/01/17 ................................................................... 1/06 @ 101 2,313,915
A 2,750 5.875%, 1/01/15 .................................................................. 1/06 @ 101 2,792,460
------------
25,787,985
------------
See Notes to Financial Statements.
8
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PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND--1.9%
AA+ $ 2,460 Rhode Island Hsg. & Mtg. Fin., Homeownership Oppty., Ser. 15-B,
6.75%, 10/01/17 .................................................................. 4/04 @ 102 $ 2,552,447
AAA 2,000 Rhode Island St. Hlth. & Edl. Bldg. Corp. Rev., Hosp. Fin.,
5.50%, 5/15/16, MBIA ............................................................. 5/07 @ 102 2,083,840
------------
4,636,287
------------
TENNESSEE--5.3%
A3 7,800 Maury Cnty. Ind. Dev. Brd., P.C.R., Saturn Corp. Proj., 6.50%, 9/01/24 ............. 9/04 @ 102 8,114,262
AAA 4,865 Memphis Shelby Cnty. Arpt. Auth. Rev., Ser. D, 6.00%, 3/01/24, AMBAC ............... 3/10 @ 101 5,144,348
------------
13,258,610
------------
TEXAS--11.7%
Dallas Cnty. Util. & Cap. Reclam. Dist., Ser. A, AMBAC,
AAA 6,085 Zero Coupon, 2/15/19 ............................................................. 2/05 @ 44.538 2,319,601
AAA 3,800 Zero Coupon, 2/15/20 ............................................................. 2/05 @ 41.799 1,359,070
BB 5,500 Dallas Ft. Worth Intl. Arpt. Fac. Impvt. Rev., Amer. Airlines Inc.,
6.375%, 5/01/35 .................................................................. 11/09 @ 101 4,348,465
AAA 6,000 Grapevine, G.O., 5.875%, 8/15/24, FGIC ............................................. 8/10 @ 100 6,336,180
AAA 5,000 Harris Cnty. Houston Sports Auth. Rev., Ser. A,
Zero Coupon, 11/15/38, MBIA ...................................................... 11/30 @ 61.166 599,900
BBB 7,000 Port Corpus Christi Auth., Celanese Proj., Ser. B, 6.70%, 11/01/30 ................. 5/12 @ 101 7,009,450
A3 6,320 Texas St. Affordable Hsg. Corp. Mult. Fam. Hsg. Rev., 5.80%, 11/01/26 .............. 11/11@ 102 6,150,940
Aa1 1,000 Texas St. Wtr. Fin. Asst., G.O., 5.75%, 8/01/22 .................................... 8/10 @ 100 1,044,710
------------
29,168,316
------------
UTAH--2.5%
Intermountain Pwr. Agcy. Pwr. Supply Rev.,
AAA 2,810 5.00%, 7/01/13, AMBAC ............................................................ ETM 2,817,531
AAA 1,640 5.00%, 7/01/13, AMBAC ............................................................ 6/02 @ 100 1,641,492
A+ 1,145 Ser. 86-B, 5.00%, 7/01/16 ........................................................ ETM 1,175,377
A+ 655 Ser. 86-B, 5.00%, 7/01/16 ........................................................ 6/02 @ 100 655,007
------------
6,289,407
------------
WASHINGTON--8.7%
Washington St., G.O.,
AA+ 4,000 Ser. A, 5.375%, 7/01/21 .......................................................... 7/06 @ 100 4,028,040
AA+ 1,000 Ser. B, 6.00%, 1/01/25 ........................................................... 1/10 @ 100 1,061,020
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 13,395 Nuclear Proj. No. 1, 5.75%, 7/01/11, MBIA ........................................ 7/06 @ 102 14,334,659
AAA 2,000 Nuclear Proj. NO. 2, 5.55%, 7/01/10, FGIC ........................................ 7/03 @ 102 2,068,760
------------
21,492,479
------------
WYOMING--4.1%
A3 10,000 Sweetwater Cnty., P.C.R., Idaho Pwr. Co. Proj., Ser. A, 6.05%, 7/15/26 ............. 7/06 @ 102 10,201,700
------------
PUERTO RICO--0.9%
A- 2,235 Puerto Rico Pub. Fin. Corp. Rev., Comnwlth. Approp., Ser. E, 5.50%, 8/01/29 ........ 2/12 @ 100 2,270,782
------------
Total Long-Term Investments (cost $378,805,871) .................................... 395,833,916
------------
SHORT-TERM INVESTMENT**--0.2%
ALABAMA
A-1+ 500 Jefferson Cnty., G.O., Ser. B, 1.70%, 5/01/02, FRDD (cost $500,000) ................ N/A 500,000
------------
See Notes to Financial Statements.
9
------------------------------------------------------------------------------------------------------------------------------------
VALUE
DESCRIPTION (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 159.5% (COST $379,305,871) ....................................... $396,333,916
Liabilities in excess of other assets--(0.5)% ...................................... (1,242,825)
Preferred stock at redemption value, including dividends payable--(59.0)% .......... (146,599,133)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ................................. $248,491,958
------------
----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity date of this
instrument is considered to be the earlier of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
+ Date (month/year) and price of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
++ This bond is prerefunded. See Glossary for definition.
+++ Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration to qualified institutional buyers. As of April 30, 2002, the
Trust held 8.1% of its net assets in securities restricted as to sale.
--------------------------------------------------------------------------------
KEY TO ABBREVIATIONS:
AMBAC -- American Municipal Bond Assurance Corporation
CAPMAC -- Capital Markets Assurance Company
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
FRDD -- Floating Rate Daily Demand
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
G.O. -- General Obligation
MBIA -- Municipal Bond Insurance Association
P.C.R. -- Pollution Control Revenue
--------------------------------------------------------------------------------
See Notes to Financial Statements.
10
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2002 (UNAUDITED)
-------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $379,305,871) (Note 1) ............. $396,333,916
Cash ........................................................... 255,221
Interest receivable ............................................ 6,867,844
Other assets ................................................... 53,640
------------
403,510,621
------------
LIABILITIES
Dividends payable--common stock ................................ 1,085,961
Payable for investments purchased .............................. 7,019,542
Investment advisory fee payable (Note 2) ....................... 113,124
Administration fee payable (Note 2) ............................ 48,482
Deferred Directors fees (Note 1) ............................... 34,482
Other accrued expenses ......................................... 117,939
------------
8,419,530
------------
PREFERRED STOCK AT REDEMPTION VALUE
$.01 par value per share and $25,000 liquidation
value per share applicable to 5,862 shares,
including dividends payable (Note 1& 4) ...................... 146,599,133
------------
NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS .......................................... $248,491,958
============
Composition of Net Assets Applicable to
Common Shareholders:
Par value (Note 4) ......................................... $ 167,071
Paid-in capital in excess of par ........................... 231,766,743
Undistributed net investment income (Note 1) ................. 5,331,126
Accumulated net realized loss ................................ (5,801,027)
Net unrealized appreciation (Note 1) ......................... 17,028,045
------------
Net Assets Applicable to Common Shareholders,
April 30, 2002 ............................................... $248,491,958
============
Net asset value per common share:
($248,491,958 / 16,707,093 shares of
common stock issued and outstanding) ......................... $14.87
======
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest (Note 1) ............................................ $ 11,317,873
------------
Expenses
Investment advisory .......................................... 686,474
Administration ............................................... 294,203
Auction agent ................................................ 191,639
Custodian .................................................... 57,130
Reports to shareholders ...................................... 34,923
Directors .................................................... 22,180
Independent accountants ...................................... 16,744
Registration ................................................. 15,765
Legal ........................................................ 13,029
Transfer agent ............................................... 11,747
Miscellaneous ................................................ 6,947
------------
Total expenses ............................................. 1,350,781
Less fees paid indirectly (Note 2) ........................... (6,318)
------------
Net Expenses ................................................. 1,344,463
------------
Net investment income .......................................... 9,973,410
------------
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Net realized loss on investments ............................... (205,374)
Net change in unrealized appreciation on
investments .................................................. (7,472,288)
------------
Net loss on investments ...................................... (7,677,662)
------------
DIVIDENDS TO PREFERRED SHAREHOLDERS
FROM NET INVESTMENT INCOME ................................... (1,064,846)
------------
NET INCREASE IN NET ASSETS APPLICABLE
TO COMMON SHAREHOLDERS RESULTING
FROM OPERATIONS .............................................. $ 1,230,902
============
See Notes to Financial Statements.
11
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 2002 2001(1)
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS APPLICABLE
TO COMMON SHAREHOLDERS
OPERATIONS:
Net investment income ...................... $ 9,973,410 $ 20,063,681
Net realized loss on investments ........... (205,374) (139,260)
Net change in unrealized appreciation
on investments ........................... (7,472,288) 12,674,420
Dividends to preferred shareholders from
net investment income .................... (1,064,846) (4,799,537)
------------- -------------
Net increase in net assets resulting
from operations ........................ 1,230,902 27,799,304
------------- -------------
DIVIDENDS TO COMMON SHAREHOLDERS FROM NET
INVESTMENT INCOME: ......................... (6,515,455) (13,030,933)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Unused offering costs relating to issuance
of preferred shares ...................... -- 158,743
------------- -------------
Total increase (decrease) ................ (5,284,553) 14,927,114
------------- -------------
NET ASSETS
Beginning of period .......................... 253,776,511 238,849,397
------------- -------------
End of period (including undistributed net
investment income of $5,331,126 and
$2,938,017, respectively) .................. $ 248,491,958 $ 253,776,511
============= =============
----------
(1) Prior year amounts have been restated to conform to the current period's
presentation under the provisions of EITF D-98 (Note 1).
See Notes to Financial Statements.
12
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
SIX MONTHS
ENDED, YEAR ENDED OCTOBER 31,(1)
APRIL 30, --------------------------------------------------------
2002 2001(2) 2000 1999 1998 1997
-------- -------- -------- -------- -------- --------
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period(3) ..................... $ 15.19 $ 14.30 $ 13.95 $ 15.78 $ 15.32 $ 14.52
-------- -------- -------- -------- -------- --------
Investment operations:
Net investment income ..................................... 0.59 1.20 1.13 1.09 1.08 1.08
Net realized and unrealized gain (loss) on investments .... (0.46) 0.75 0.43 (1.63) 0.70
0.80
Dividends and distributions to preferred shareholders from:
Net investment income ................................... (0.06) (0.29) (0.35) (0.24) (0.24) (0.27)
Net realized gain on investments ........................ -- -- -- (0.04) (0.07) (0.01)
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations .......... 0.07 1.66 1.21 (0.82) 1.47 1.60
-------- -------- -------- -------- -------- --------
Dividends and distributions to common shareholders from:
Net investment income ..................................... (0.39) (0.78) (0.83) (0.86) (0.81) (0.78)
Net realized gain on investment ........................... -- -- -- (0.15) (0.20) (0.02)
-------- -------- -------- -------- -------- --------
Total dividends and distributions ........................... (0.39) (0.78) (0.83) (1.01) (1.01) (0.80)
-------- -------- -------- -------- -------- --------
Capital change with respect to issuance of
preferred shares .......................................... -- 0.01 (0.03) -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period(3) ........................... $ 14.87 $ 15.19 $ 14.30 $ 13.95 $ 15.78 $ 15.32
======== ======== ======== ======== ======== ========
Market value, end of period(3) .............................. $ 13.45 $ 13.73 $ 12.13 $ 13.13 $ 15.44 $ 13.38
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN(4) .................................. 0.83% 20.03% (1.27)% (9.03)% 23.81% 14.39%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:(5)
Expenses after fees paid indirectly ......................... 1.09%(6) 1.14% 1.20% 1.05% 1.04% 1.07%
Net investment income before preferred stock dividends ...... 8.08%(6) 8.10% 8.18% 7.21% 6.95% 7.42%
Preferred stock dividends ................................... 0.86%(6) 1.94% 2.53% 1.60% 1.53% 1.88%
Net investment income available to common shareholders ...... 7.22%(6) 6.16% 5.65% 5.61% 5.42% 5.54%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (000) ............. $248,971 $247,832 $230,746 $252,536 $259,280 $243,947
Portfolio turnover .......................................... 8% 4% 35% 26% 46% 160%
Net assets of common shareholders, end of period (000) ...... $248,492 $253,777 $238,849 $233,085 $263,590 $255,926
Preferred stock outstanding (000) ........................... $146,550 $146,550 $146,550 $130,000 $130,000 $130,000
Asset coverage per share of preferred stock, end of period .. $ 67,399 $ 68,308 $ 65,745 $ 69,824 $ 75,690 $ 74,241
----------
(1) Prior periods have been restated to conform to the current period's
presentation under the provisions of EITF D-98.
(2) As required, effective November 1, 2000, the Trust adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
accreting market discount on debt securities. The effect of this accounting
policy change had no impact on the total net assets of the Trust. The
effect of this change for the six months ended April 30, 2002, was to
increase the net investment income by less than $0.005 per share, decrease
net realized and unrealized gains and losses by less than $0.005 per share,
and increase the ratio of net investment income before preferred share
dividends from 8.03% to 8.08% and from 7.17% to 7.22% on net investment
income available to common shareholders. Per share, ratios and supplemental
data for periods prior to 2001 have not been restated to reflect this
change.
(3) Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
(4) Total investment return is calculated assuming a purchase of a share of
common stock at the current market price on the first day and a sale at the
current market price on the last day of the period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment returns for less than a full year are not annualized. Past
performance is not a guarantee of future results.
(5) Ratios are calculated on the basis of income and expenses applicable to
both the common and preferred stock relative to the average net assets of
common shareholders.
(6) Annualized
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's common shares.
See Notes to Financial Statements.
13
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & ACCOUNTING POLICIES
The BlackRock Investment Quality Municipal Trust Inc. (the "Trust") was
organized in Maryland on November 19, 1992, as a diversified, closed-end
management investment company. The Trust's investment objective is to provide
high current income exempt from regular Federal income tax consistent with the
preservation of capital. The ability of issuers of debt securities held by the
Trust to meet their obligations may be affected by economic developments in a
specific industry or region. No assurance can be given that the Trust's
investment objective will be achieved.
The following is a summary of significant accounting policies followed by
the Trust.
SECURITIES VALUATION: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by dealers or pricing services approved by the Trust's Board of
Directors. In determining the value of a particular security, pricing services
may use certain information with respect to transactions in such securities,
quotations from bond dealers, market transactions in comparable securities and
various relationships between securities. Short-term securities may be valued at
amortized cost. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on trade date. Realized and unrealized gains and losses are calculated
on the identified cost basis. The Trust also records interest income on an
accrual basis and amortizes premium and accretes discount to interest income on
securities purchased using the interest method.
SEGREGATION: In cases in which the Investment Company Act of 1940, as amended
and the interpretive positions of the Securities and Exchange Commission ("SEC")
require that the Trust segregate assets in connection with certain Trust
investments (e.g., when issued securities, reverse repurchase agreements or
futures contracts), the Trust will, consistent with certain interpretive letters
issued by the SEC, designate on its books and records cash or other liquid debt
securities having a market value at least equal to the amount that would
otherwise be required to be physically segregated.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annu-ally. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Directors on February 24, 2000, non-interested Directors may elect to
defer receipt of all or a portion of their annual compensation.
Deferred amounts earn a return as though equivalent dollar amounts had been
invested in common shares of other BlackRock funds selected by the Directors.
This has the same economic effect for the Directors as if the Directors had
invested the deferred amounts in such other BlackRock funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Directors in order to match its deferred compensation obligations.
NEW ACCOUNTING POLICIES: As required, effective November 1, 2000, the Trust has
adopted the provisions of the AICPA Audit and Accounting Guide for Investment
Companies, as revised, and began accreting market discount on debt securities.
Prior to November 1, 2000, the Trust amortized premiums and original issue
discount on debt securities. The cumulative effect of this accounting policy
change had no impact on the total net assets of the Trust. This resulted in a
$539,862 increase to undistributed net investment income and a corresponding
decrease in net unrealized appreciation, based on securities held by the Trust
on October 31, 2001. The Financial Highlights of the Trust for periods prior to
2001 have not been restated to reflect this change.
The effect of this change for the six months ended April 30, 2002, was to
increase net investment income by $56,305; decrease net unrealized appreciation
by $56,039 and increase net realized losses by $266.
CHANGE IN FINANCIAL STATEMENT CLASSIFICATION FOR AMPS: In accordance with the
provisions of EITF D-98, "Classification and Measurement of Redeemable
Securities," effective for the current period, the Trust has reclassified its
Auction Market
14
Preferred Shares ("AMPS") outside of permanent equity in the Net Assets section
of the Statement of Assets and Liabilities. In addition, distributions to AMPS
shareholders are now classified as a component of net assets resulting from
operations on the statement of operations and changes in net assets and as a
component of the investment operations in the financial highlights. Prior year
amounts presented have been restated to conform to this period's presentation.
This change has no impact on the net assets applicable to common shares of the
Trust.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Advisors, Inc.,
(the "Advisor"), which is a wholly-owned subsidiary of BlackRock, Inc., which in
turn is an indirect, majority-owned subsidiary of PNC Financial Services Group,
Inc. The Trust has an Administration Agreement with Princeton Administrators,
L.P. (the "Administrator"), an indirect wholly-owned affiliate of Merrill Lynch
& Co., Inc.
The investment advisory fee paid to the Advisor is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. "Net investment assets" means the total assets of the Trust
(including any assets attributable to any preferred shares that may be
outstanding) minus the sum of accrued liabilities (other than debt representing
financial leverage). The liquidation preference of the preferred shares is not a
liability. The total dollar amounts paid to the Advisor by the Trust under the
Investment Advisory Agreement for the six months ended April 30, 2002 and the
years ended October 31, 2001, 2000 and 1999 were $686,474, $1,384,129,
$1,313,673 and $1,364,571, respectively. The administration fee paid to the
Administrator is also computed weekly and payable monthly at an annual rate of
0.15% of the Trust's average weekly net investment assets, subject to a minimum
monthly fee of $12,500. The total dollar amounts paid to the Administrator by
the Trust under the Administration Agreement for the six months ended April 30,
2002 and the years ended October 31, 2001, 2000 and 1999 were $294,203,
$593,198, $563,003 and $584,816, respectively.
Pursuant to the agreements, the Advisor provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Advisor. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses, which include reimbursements to the Advisor for certain
operational support services provided to the Trust.
Pursuant to the terms of the custody agreement, the Trust receives earnings
credits from its custodian when positive cash balances are maintained, which are
used to offset custody fees. The earnings credits for the period ended April 30,
2002 were $6,318.
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investments, other than short-term investments, for the
six months ended April 30, 2002, aggregated $39,130,974 and $31,662,300,
respectively.
The Federal income tax basis of the Trust's investments at April 30, 2002
was $378,791,189, and accordingly, net unrealized appreciation was $17,542,727
(gross unrealized appreciation--$22,458,804, gross unrealized depreciation--
$4,916,077).
For Federal income tax purposes, the Trust had a capital loss carryforward
at October 31, 2001 of approximately $5,514,000 of which $312,000 will expire in
2007, $5,068,000 will expire in 2008 and $134,000 will expire in 2009.
Accordingly, no capital gain distribution is expected to be paid to shareholders
until net gains have been realized in excess of such amount.
NOTE 4. CAPITAL
There are 200 million shares of $.01 par value common stock authorized. The
Trust may classify or reclassify any unissued shares of common stock into one or
more series of preferred stock. Of the 16,707,093 common shares outstanding at
April 30, 2002, the Advisor owned 7,205 shares. As of April 30, 2002, there were
5,862 shares of preferred stock outstanding as follows: Series T7--3,262 and
Series T28--2,600.
Dividends on Series T7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividends on Series T28 are also cumulative
at a rate which is reset every 28 days based on the results of an auction.
Dividend rates ranged from 1.15% to 2.00% during the six months ended April 30,
2002.
The Trust may not declare dividends or make other distributions on shares
of common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred stock would be less than 200%.
The preferred stock is redeemable at the option of the Trust, in whole or
in part, on any dividend payment date at $25,000 per share plus any accumulated
or unpaid dividends whether or not declared. The preferred stock is also subject
to mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of preferred stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of preferred stock are also
entitled to elect two of the Trust's Directors. In addition, the Investment
Company Act of 1940 requires that along with approval by stockholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred stock, voting separately as a class would be required to
(a) adopt any plan
15
of reorganization that would adversely affect the preferred stock, and (b) take
any action requiring a vote of security holders, including, among other things,
changes in the Trust's subclassification as a closed-end investment company or
changes in its fundamental investment restrictions.
NOTE 5. DIVIDENDS AND DISTRIBUTIONS
Subsequent to April 30, 2002, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.065 per common share payable June 3,
2002, to shareholders of record on May 15, 2002.
For the period May 1, 2002 to May 31, 2002, dividends declared on preferred
stock totaled $185,510 in aggregate for the two outstanding preferred stock
series.
16
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), common
shareholders are automatically enrolled to have all distributions of dividends
and capital gains reinvested by EquiServe Trust Company, N.A. (the "Plan Agent")
in Trust shares pursuant to the Plan. Shareholders who elect not to participate
in the Plan will receive all distributions in cash paid by check 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.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue any new shares under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any Federal income tax that may be payable on
such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended or terminated by
the Plan Agent upon at least 90 days' written notice to all shareholders of the
Trust. All correspondence concerning the Plan should be directed to the Plan
Agent at (800) 699-1BFM. The address is on the back of this report.
17
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders or to its charter or
by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
Quarterly performance and other information regarding the Trust may be
found on BlackRock's website, which can be accessed at
http://www.blackrock.com/funds/cefunds.html. This reference to BlackRock's
website is intended to allow investors public access to quarterly information
regarding the Trust and is not intended to incorporate BlackRock's website into
this report.
The Annual Meeting of Trust Shareholders was held May 23, 2002 to vote on the
following matter:
To elect three Directors as follows:
DIRECTOR: CLASS TERM EXPIRING
------- ------ ----- --------
Andrew F. Brimmer ............. III 3 years 2005
Kent Dixon .................... III 3 years 2005
Laurence D. Fink .............. III 3 years 2005
Directors whose term of office continues beyond this meeting are Richard E.
Cavanagh, Frank J. Fabozzi, James Clayburn La Force, Jr., Walter F. Mondale and
Ralph L. Schlosstein.
Shareholders elected the three Directors. The results of the voting were as
follows:
VOTES FOR* VOTES AGAINST* ABSTENTIONS*
---------- ------------- ------------
Andrew F. Brimmer ............. 15,019,792 -- 141,459
Kent Dixon .................... 15,023,466 -- 137,785
Laurence D. Fink .............. 15,024,141 -- 137,110
----------
* The votes represent common and preferred shareholders voting as a single
class.
Laurence D. Fink, Chairman of the Trust's Board of Directors, and certain
of the officers of the Trust listed on the cover of this Report to Shareholders,
are also officers of the Advisor. They serve in the following capacities for the
Advisor: Laurence D. Fink--Chief Executive Officer, Ralph L.
Schlosstein--Director and President, Robert S. Kapito--Director and Vice
Chairman, Kevin M. Klingert--Director and Managing Director, Henry
Gabbay--Managing Director, and Anne Ackerley--Managing Director.
18
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Investment Quality Municipal Trust's investment objective is to
provide high current income exempt from regular Federal income tax consistent
with the preservation of capital.
WHO MANAGES THE TRUST?
BlackRock is one of the largest publicly traded investment management firms in
the United States with $238 billion of assets under management as of March 31,
2002. BlackRock manages assets on behalf of institutional and individual
investors worldwide through a variety of equity, fixed income, liquidity and
alternative investment products, including the BLACKROCK FUNDS and BLACKROCK
PROVIDENT INSTITUTIONAL FUNDS. In addition, BlackRock provides risk management
and investment system services to a growing number of institutional investors
under the BLACKROCK SOLUTIONS name. Clients are served from the Company's
headquarters in New York City, as well as offices in Boston, Edinburgh, Hong
Kong, San Francisco, Tokyo and Wilmington. BlackRock is a member of The PNC
Financial Services Group (NYSE: PNC), and is majority-owned by PNC and by
BlackRock employees.
WHAT CAN THE TRUST INVEST IN?
Under normal conditions, the Trust expects to continue to manage its assets so
that at least 80% of its investments are rated at least investment grade ("BBB"
by Standard & Poor's or "Baa" by Moody's Investor Services) and up to 20% of its
assets may instead be deemed to be of equivalent credit quality by the Advisor.
Examples of the types of securities that the Trust may invest in include general
obligation bonds, which are backed by the full taxing power of the municipality
(states, counties and cities), and revenue bonds, which are backed by a revenue
source associated with the issuing municipality or by a special tax. Revenue
bonds include those that are backed by revenues generated by universities,
hospitals, housing developments, utilities, public facilities, toll roads,
airports, etc.
WHAT IS THE ADVISOR'S INVESTMENT STRATEGY?
The Advisor will manage the assets of the Trust in accordance with the Trust's
investment objective and policies to seek to achieve its objective by investing
in municipal debt securities that are diversified both geographically and
according to revenue source. As such, the Advisor actively manages the assets in
relation to market conditions and interest rate changes. In seeking the
investment objective, the Trust does not expect to invest more than 25% of its
total assets in municipals that are issued by the same state. Depending on yield
and portfolio allocation considerations, the Advisor may choose to invest a
portion of the Trust's assets in securities which pay interest that is subject
to AMT (alternative minimum tax).
Under current market conditions the use of leverage increases the income earned
by the Trust. The Trust employs leverage primarily through the issuance of
preferred stock. Preferred stockholders will receive dividends based on
short-term rates in exchange for allowing the Trust to borrow additional assets.
These assets will be invested in longer-term assets which typically offer higher
interest rates and the difference between the cost of the dividends paid to
preferred stockholders and the interest earned on the longer-term securities
will provide higher income levels for common stockholders in most interest rate
environments. See "Leverage Considerations in the Trust".
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's common shares are traded on the New York Stock Exchange which
provides investors with liquidity on a daily basis. Orders to buy or sell shares
of The Trust must be placed through a registered broker or financial advisor.
The Trust pays monthly dividends which are typically paid on the first business
day of the month. For shares held in the shareholder's name, dividends may be
reinvested in additional shares of the Trust through the Trust's transfer agent,
EquiServe Trust Company, N.A. Investors who wish to hold shares in a brokerage
account should check with their financial advisor to determine whether their
brokerage firm offers dividend reinvestment services.
19
LEVERAGE CONSIDERATIONS IN THE TRUST
The Trust employs leverage primarily through the issuance of preferred stock.
Leverage permits the Trust to borrow money at short-term rates and reinvest that
money in longer-term assets which typically offer higher interest rates. The
difference between the cost of the borrowed funds and the income earned on the
proceeds that are invested in longer term assets is the benefit to the Trust
from leverage.
Leverage increases the duration (or price sensitivity of the net assets with
respect to changes in interest rates) of the Trust, which can improve the
performance of the Trust in a declining rate environment, but can cause net
assets to decline faster in a rapidly rising rate environment. The Advisor's
portfolio managers continuously monitor and regularly review the Trust's use of
leverage and the Trust may reduce, or unwind, the amount of leverage employed
should the Advisor consider that reduction to be in the best interests of the
shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO THE TRUST
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
INVESTMENT OBJECTIVE. Although the objective of the Trust is to provide high
current income exempt from regular Federal income tax consistent with the
preservation of capital, there can be no assurance that this objective will be
achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to vary over time as fixed income market conditions change. Future dividends may
be higher or lower than the dividend the Trust is currently paying.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock,
which involves special risks. The Trust's net asset value and market value maybe
more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BKN) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
MUNICIPAL OBLIGATIONS. The value of municipal debt securities generally varies
inversely with changes in prevailing market interest rates. Depending on the
amount of call protection that the securities in the Trust have, the Trust may
be subject to certain reinvestment risks in environments of declining interest
rates.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
alternative minimum tax.
20
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THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
GLOSSARY
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CLOSED-END FUND: Investment vehicle which initially offers a fixed
number of shares and trades on a stock exchange. The
Trust invests in a portfolio of securities in
accordance with its stated investment objectives and
policies.
DISCOUNT: When a Trust's net asset value is greater than its
market price the Trust is said to be trading at a
discount.
DIVIDEND: Income generated by securities in a portfolio and
distributed to shareholders after the deduction of
expenses. This Trust declares and pays dividends to
common shareholders on a monthly basis.
DIVIDEND REINVESTMENT: Common shareholders may have all dividends and
distributions of capital gains automatically reinvested
into additional shares of the Trust.
MARKET PRICE: Price per share of a security trading in the secondary
market. For a closed-end Trust, this is the price at
which one share of the Trust trades on the stock
exchange. If you were to buy or sell shares, you would
pay or receive the market price.
NET ASSET VALUE (NAV): Net asset value is the total market value of all
securities and other assets held by the Trust,
including income accrued on its investments, minus any
liabilities including accrued expenses, divided by the
total number of outstanding common shares. It is the
underlying value of a single common share on a given
day. Net asset value for the Trust is calculated weekly
and published in BARRON'S on Saturday and THE WALL
STREET JOURNAL on Monday.
PREMIUM: When a Trust's market price is greater than its net
asset value, the Trust is said to be trading at a
premium.
PREREFUNDED BONDS: These securities are collateralized by U.S. Government
securities which are held in escrow and are used to pay
principal and interest on the tax-exempt issue and
retire the bond in full at the date indicated,
typically at a premium to par.
21
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BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
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TAXABLE TRUSTS
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STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ----
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
BlackRock Core Bond Trust BHK N/A
BlackRock Strategic Bond Trust BHD N/A
TERM TRUSTS
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
TAX-EXEMPT TRUSTS
-------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
----- -----
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust BSD N/A
BlackRock California Municipal Income Trust BFZ N/A
BlackRock Municipal Income Trust BFK N/A
BlackRock New York Municipal Income Trust BNY N/A
BlackRock New Jersey Municipal Income Trust BNJ N/A
BlackRock Florida Municipal Income Trust BBF N/A
BlackRock New York Municipal Bond Trust BQH N/A
BlackRock Virginia Municipal Bond Trust BHV N/A
BlackRock Florida Municipal Bond Trust BIE N/A
BlackRock Municipal Bond Trust BBK N/A
BlackRock Maryland Municipal Bond Trust BZM N/A
BlackRock New Jersey Municipal Bond Trust BLJ N/A
BlackRock California Municipal Bond Trust BZA N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
BlackRock California Municipal 2018 Term Trust BJZ 12/18
BlackRock New York Municipal 2018 Term Trust BLH 12/18
BlackRock Municipal 2018 Term Trust BPK 12/18
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE DO NOT HESITATE TO CALL BLACKROCK
AT (800) 227-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.
22
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BLACKROCK ADVISORS, INC.
AN OVERVIEW
--------------------------------------------------------------------------------
BlackRock is one of the largest publicly traded investment management firms
in the United States with $238 billion of assets under management as of March
31, 2002. BlackRock manages assets on behalf of institutional and individual
investors worldwide through a variety of equity, fixed income, liquidity and
alternative investment products, including the BLACKROCK FUNDS and BLACKROCK
PROVIDENT INSTITUTIONAL FUNDS. In addition, BlackRock provides risk management
and investment system services to a growing number of institutional investors
under the BLACKROCK SOLUTIONS name. Clients are served from the Company's
headquarters in New York City, as well as offices in Boston, Edinburgh, Hong
Kong, San Francisco, Tokyo and Wilmington. BlackRock is a member of The PNC
Financial Services Group (NYSE: PNC), and is majority-owned by PNC and by
BlackRock employees.
BlackRock's fixed income product was introduced in 1988 by a team of highly
seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first CMO, the floating rate CMO, the
senior/subordinated pass-through and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals are dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.
BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, BlackRock introduced the first closed-end mortgage fund, the
first taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, some
of which are designed to provide ongoing demand for the stock in the secondary
market. BlackRock manages a wide range of investment vehicles, each having
specific investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM.
23
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BlackRock
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DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Kevin M. Klingert, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Anne Ackerley, SECRETARY
INVESTMENT ADVISOR
BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
CUSTODIAN
State Street Bank and Trust Company
1 Heritage Drive
North Quincy, MA 02171
TRANSFER AGENT
EquiServe Trust Company, N.A.
150 Royall Street
Canton, MA 02021
(800) 699-1BFM
AUCTION AGENT
Deutsche Bank
4 Albany Street
New York, NY 10006
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, NY 10036
LEGAL COUNSEL -- INDEPENDENT DIRECTORS
Debevoise & Plimpton
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of April 30, 2002 were not audited
and accordingly, no opinion is expressed on them.
This report is for shareholder information. This is not a prospectus
intended for use in the purchase or sale of any securities.
Statements and other information contained in this report are as dated and
are subject to change.
THE BLACKROCK INVESTMENT QUALITY
MUNICIPAL TRUST INC.
c/o Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
09247D-10-5
09247D-20-4
[RECYCLE LOGO] PRINTED ON RECYCLED PAPER 09247D-30-3
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THE BlackRock
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INVESTMENT QUALITY
MUNICIPAL TRUST INC.
===========================
SEMI-ANNUAL REPORT
APRIL 30, 2002
[LOGO](SM) BlackRock