--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
July 31, 2002
Dear Shareholder:
The semi-annual period ended June 30, 2002, saw general turmoil in the
equity markets. Bond markets, particularly municipal securities, proved to be a
viable shelter from unstable economic conditions and experienced strong inflows
throughout the period. Municipal bonds outperformed Treasuries returning 4.64%
versus 3.61% respectively as measured by the LEHMAN BROTHERS MUNICIPAL BOND
INDEX* and the LEHMAN BROTHERS TREASURY INDEX** for the six months ended June
30, 2002.
The first half of 2002 was markedly different from the last six months of
2001, as the Federal Reserve Board (the "Fed") left interest rates unchanged.
After a 225 basis point decline in interest rates during the latter half of
2001, and the uncertainty of the economic recovery in the first half of this
year, the Fed remained cautious about the state of the economy. Fears of
inflation remained subdued, allowing the Fed to remain on hold and maintain the
lowest interest rates in decades.
The past six months also saw a 20% increase in new municipal issuance
totaling $162 billion, as compared to the same time period last year. Both
retail and institutional investment in municipals remained high and continued to
drive performance as investors sought lower volatility alternatives with
attractive taxable equivalent yields. While economic indicators remained
positive during the period, the instability of the equity and capital
markets--as a result of corporate governance and accounting issues, fears of
renewed terrorist acts and geopolitical instability--weighed on investor
confidence, an integral component of economic recovery.
The volatility, which continues to be seen throughout all sectors of the
market, can be disconcerting for investors. We encourage you to consult with
your financial advisor to help establish a strategy that best fits your overall
goals and risk tolerance.
The semi-annual report includes a summary of market conditions over the
last six months, 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 thank you for your continued confidence in BlackRock
and the opportunity to help you achieve your long-term investment goals.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
---------------------------- -------------------------
Laurence D. Fink Ralph L. Schlosstein
Chief Executive Officer President
BlackRock Advisors, Inc. BlackRock Advisors, Inc.
* 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
July 31, 2002
Dear Shareholder:
We are pleased to present the unaudited semi-annual report for The
BlackRock Florida Insured Municipal 2008 Term Trust (the "Trust") for the six
months ended June 30, 2002. We would like to take this opportunity to review the
change in the Trust's stock price and net asset value (NAV), summarize
developments in the fixed income markets and discuss recent portfolio management
activity.
The Trust is a non-diversified closed-end bond fund whose shares are traded
on the New York Stock Exchange under the symbol "BRF." The Trust's investment
objectives are to provide current income that is exempt from regular Federal
income tax and Florida intangible personal property tax and to return $15 per
share (an amount equal to the Trust's initial public offering price) to
investors on or about December 31, 2008. The Trust seeks to achieve these
objectives by investing in high credit quality ("AAA" or insured to "AAA")
Florida tax-exempt general obligation and revenue bonds issued by city, county
and state municipalities and U.S. territories.
The table below summarizes the changes in the Trust's share price and NAV:
------------------------------------------------------------------------------------------------------------------------------------
06/30/02 12/31/01 CHANGE HIGH LOW
------------------------------------------------------------------------------------------------------------------------------------
SHARE PRICE $15.65 $15.40 1.62% $15.65 $15.18
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $16.21 $16.01 1.25% $16.21 $15.80
------------------------------------------------------------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
Economic performance was mixed during the semi-annual period ended June 30,
2002, as volatility and instability were prevalent throughout all sectors of the
market. The U.S. economy showed signs of recovery, but mixed economic data and
dismal performance in the equity markets caused a massive unwinding of Fed
tightening expectations. Structural imbalances in the U.S. economy became
evident and the effects of the short-term stimulus post September 11th
diminished, causing the Fed to remain on hold and leave the Federal Funds rate
unchanged at 1.75%. Positive economic data included a rise in first quarter 2002
GDP of 6.1%, the fastest rate in two years, strong manufacturing data, an 8.4%
rise in first quarter 2002 productivity and the Consumer Confidence Index
advancing from year-end levels. Low inventory levels should support
manufacturing data, but we are skeptical about the continued strength of
consumer demand, which is essential to a sustained economic recovery. The
long-term sustainability of the highly leveraged consumer remains a pivotal
issue to the strength of the economic recovery. Although fundamentals support a
recovery, declining equities and a plummeting dollar continue to erode investor
confidence. We remain uncertain that a near-term business investment recovery
will materialize, as pricing power remains weak. While second quarter weakness
may be overstated, the likely outcome is one of several quarters of sub-par
growth in the 2.5%-3.0% range.
Year-to-date, rates have fallen across the yield curve. The Treasury market
returned 3.61% during the period, posting exceptionally strong months in April
and June as risk aversion dominated the markets. Over the course of the period,
the yield curve steepened in reaction to mixed economic data and a proliferation
of negative headlines in the corporate sector. Looking ahead, the budget surplus
of 2001 is unlikely to be sustained due to anemic tax revenues and a sharp rise
in defense spending, which 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 until it can return to
regular auctions. As of June 30, 2002, the 10-year Treasury was yielding 4.80%
versus 5.05% on December 31, 2001.
On a tax-adjusted basis, municipal bonds outperformed the taxable domestic
bond market for the semi-annual period ended June 30, 2002, returning 7.55% (as
measured by the Lehman Municipal Bond Index at a tax bracket of 38.6%) versus
3.79% for the Lehman Aggregate Index. Retail investment has reached record
highs, as investors searched for a lower volatility asset class providing high
after-tax returns. Institutional demand has also remained strong and is being
fueled by increased profitability on the part of insurance companies, the search
for stable income and asset allocation trades away from segments of the market
experiencing higher volatility. Over the period, 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.
Through June, new bond issuance remained robust, bringing total year-to-date
issuance to nearly $170 billion, and is on pace to be the largest issuance year
in history. The municipal yield curve remains historically steep, as the short
end of the curve has outperformed Treasuries over the recent months while longer
maturities performed in line with their Treasury counterparts.
The State of Florida's historically strong financial position reflects
prudent fiscal management combined with a solid and diversifying economy. In
fact, Florida ranks 19th in gross state product when compared to other large
states and major coun
2
tries. The State's strong fiscal management is reflected in its maintenance of
significant, annual General Fund balances vis-a-vis revenues (approximately 2.2%
in 2002); this financial cushion provides additional security to both the State
and its bondholders. These reserve funds reflect legislatively enacted budget
reductions equal to or greater than anticipated revenue shortfalls and prior to
the actual expenditure. During the recent economic expansion, Florida built up
its budget stabilization fund to nearly $1 billion. To date, management has met
the challenges of declining revenues due to the recession and the manifestations
of the September 11th terrorist attack. Specifically, the State's Revenue
Estimating Conference lowered its income expectations, and reduced expenditures,
in response to the sharp decline in tourism that significantly impacted
Florida's revenues. Sales tax receipts are the General Fund's major revenue
source (73% in 2001) and tourists generate much of this income. The revenue
revisions were appropriate and the State expects to end FY2002 with a small
surplus. Florida residents' growing needs for Medicaid (2000 and 2001 combined
increase was +22%) and education continue to add pressure to the FY2003 budget.
The State's policy is to maintain a manageable debt burden while continuing to
use bonds to meet capital expenses.
Florida's population has increased at a 2.6% average annual rate since
1991, compared to the 1% rate for the U.S., to over 16 million residents.
Although economists anticipate slower future growth, the population expansion is
expected to exceed that of the nation. The State's economy is anchored by
tourism, manufacturing and agriculture. Job creation grew slightly (less than
1%) over the past year. The 5.1% unemployment rate, (May 2002) is an increase
from the same month last year (4.5%) but lower than December's 6.1% peak. Trade
and services, the major employment sectors, have remained flat. The September
11th terrorist attack significantly impacted Florida's heavily tourist dependent
economy causing declines in air traffic, the hotel industry, amusement and
recreation activities. Manufacturing jobs continue to decline (5.8% year over
year) and represent only 6.3% of Florida's employment, which is approximately
one half the national level. The construction industry is becoming less
important as the State's economy diversifies.
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 and
coupons. Additionally, the Trust emphasizes securities whose maturity dates
match the termination date of the Trust.
Over the period, trading activity in the Trust remained relatively low, as
many of the securities in the Trust's portfolio continued to trade at prices
above where they were purchased. As trading activity that results in the Trust
realizing a capital gain could require a taxable distribution as well as reduce
its income generating capacity, we continue to believe that waiting to
restructure the portfolio in a higher interest rate environment is the most
prudent portfolio management strategy. At present, we are confident that the
Trust is on schedule to achieve its primary investment objective of returning
$15 per share upon termination and will continue to seek investment
opportunities in the municipal market.
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 year, the Trust's leverage amount was approximately 33% of total
assets.
The following chart shows the Trust's asset composition:
--------------------------------------------------------------------------------
SECTOR BREAKDOWN
--------------------------------------------------------------------------------
SECTOR JUNE 30, 2002 DECEMBER 31, 2001
--------------------------------------------------------------------------------
Tax Revenue 26% 22%
--------------------------------------------------------------------------------
Education 22% 22%
--------------------------------------------------------------------------------
Water & Sewer 13% 15%
--------------------------------------------------------------------------------
Transportation 10% 8%
--------------------------------------------------------------------------------
Power 10% 11%
--------------------------------------------------------------------------------
Hospital 9% 11%
--------------------------------------------------------------------------------
City, County & State 6% 7%
--------------------------------------------------------------------------------
Resource Recovery 3% 3%
--------------------------------------------------------------------------------
District 1% 1%
--------------------------------------------------------------------------------
3
We look forward to managing the Trust to benefit from the opportunities
available in the fixed income markets and to meet its investment objectives. We
thank you for your investment in The BlackRock Florida Insured Municipal 2008
Term Trust. Please feel free to contact our marketing center at (800) 227-7BFM
(7236) if you have 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
BlackRock Advisors, Inc. BlackRock Advisors, Inc.
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BRF
--------------------------------------------------------------------------------
Initial Offering Date: September 18, 1992
--------------------------------------------------------------------------------
Closing Share Price as of 6/30/02: $15.65
--------------------------------------------------------------------------------
Net Asset Value as of 6/30/02: $16.21
--------------------------------------------------------------------------------
Yield on Closing Share Price as of 6/30/02 ($15.65)(1): 4.79%
--------------------------------------------------------------------------------
Current Monthly Distribution per Common Share(2): $ 0.0625
--------------------------------------------------------------------------------
Current Annualized Distribution per Common Share(2): $ 0.7500
--------------------------------------------------------------------------------
(1) Yield on closing share price is calculated by dividing the current
annualized distribution per share by the closing share 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 non-public personal information
of its shareholders may become available to the Trust. The Trust does not
disclose any non-public personal information about its shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Trust restricts access to non-public personal information about the
shareholders to BlackRock employees with a legitimate business need for the
information. The Trust maintains physical, electronic and procedural safeguards
designed to protect the non-public personal information of its shareholders.
4
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--173.8%
FLORIDA--172.6%
Aaa $ 1,500 Alachua Cnty. Sch. Dist., GO, 4.25%, 1/01/09, FSA .............................. No Opt. Call $ 1,551,495
AAA 1,500 Altamonte Springs Wtr. & Swr. Sys. Rev., 6.00%, 10/01/08, FGIC ................. 10/02 @ 102 1,544,340
AAA 10,000++ Brevard Cnty. Sch. Brd., COP, Ser. A, 6.375%, 7/01/02, AMBAC ................... N/A 10,200,000
Canaveral Port Auth. Impvt. Rev., FGIC,
AAA 2,980 6.00%, 6/01/07 ................................................................ 8/02 @ 102 3,051,311
AAA 3,155 6.00%, 6/01/08 ................................................................ 8/02 @ 102 3,230,499
Dade Cnty., GO,
AAA 5,000 Ser. A, Zero Coupon, 2/01/08, MBIA ............................................ 2/06 @ 92.852 4,020,300
AAA 2,000 Ser. B, Zero Coupon, 10/01/08, AMBAC .......................................... ETM 1,586,471
AAA 1,000 Dade Cnty. Aviation Rev., Ser. A, 6.00%, 10/01/08, AMBAC ....................... 10/05 @ 102 1,102,970
AAA 5,465++ Dade Cnty. Sch. Brd., COP, Ser. A, 5.75%, 5/01/04, MBIA ........................ N/A 5,896,954
AAA 2,500 Daytona Beach Wtr. & Swr. Rev., 6.00%, 11/15/09, AMBAC ......................... 11/02 @ 102 2,585,900
Duval Cnty. Sch. Dist., GO, AMBAC,
AAA 3,015 6.30%, 8/01/06 ................................................................ 8/02 @ 102 3,085,159
AAA 9,000 6.30%, 8/01/07 ................................................................ 8/02 @ 102 9,209,430
Escambia Cnty. Utils. Auth. Sys. Rev., FGIC,
AAA 2,450++ Ser. A, 6.10%, 1/01/03 ........................................................ N/A 2,554,566
AAA 1,595 Ser. B, 6.125%, 1/01/09 ....................................................... No Opt. Call 1,814,488
AAA 4,190 Florida St. Brd. of Ed. Lottery Rev., Ser. A, 5.00%, 7/01/08, FGIC ............. No Opt. Call 4,540,829
AAA 8,000 Florida St. Div. Bd. Fin. Dept. Gen. Svc. Rev. Dept. Env. Presvtn., 2000-B,
5.25%, 7/01/10, FSA ........................................................... 7/08 @ 101 8,657,040
Florida St. Div. Bd. Fin. Dept. Rev., Nat. Res. & Pres., 2000-A,
AAA 2,000 5.00%, 7/01/11, AMBAC ......................................................... 7/07 @ 101 2,107,360
AAA 14,500++ 6.25%, 7/01/02, MBIA .......................................................... N/A 14,645,000
Greater Orlando Aviation Auth., Arpt. Fac. Rev.,
AAA 6,000 Ser. C, 3.50%, 10/01/08, MBIA ................................................. No Opt. Call 6,000,000
AAA 3,000 Ser. D, 6.20%, 10/01/08, AMBAC ................................................ 10/02 @ 102 3,089,670
Hillsborough Cnty. Cap Impvt., FGIC,
AAA 2,630++ 6.25%, 8/01/04 ................................................................ N/A 2,883,269
AAA 1,500++ 6.60%, 8/01/04 ................................................................ N/A 1,655,085
AAA 5,000++ Hillsborough Cnty. Sch. Brd., COP, 5.875%, 7/01/04, MBIA ....................... N/A 5,476,200
AAA 3,000 Hillsborough Cnty. Sch. Dist. Sales Tax Rev., 4.00%, 10/01/09, AMBAC ........... No Opt. Call 3,066,270
AAA 10,000 Hillsborough Cnty. Util. Rev., Jr. Lien, 4.50%, 8/01/08, AMBAC ................. No Opt. Call 10,575,400
Indian Trace Cmnty. Dev. Dist., Wtr. Mgmt. Spec. Benefit, Ser. A, MBIA,
AAA 3,000 5.625%, 5/01/08 ............................................................... 5/05 @ 102 3,263,580
AAA 2,910 5.75%, 5/01/09 ................................................................ 5/05 @ 102 3,175,450
AAA 5,000++ Jacksonville, GO, Ser. A, 5.50%, 10/01/02, AMBAC ............................... N/A 5,151,900
AAA 4,000 Jacksonville Elec. Auth. Rev., 5.75%, 10/01/12, AMBAC .......................... 10/02 @ 101 4,076,520
AAA 5,895 Jacksonville Excise Tax Rev., 4.25%, 10/01/08, AMBAC ........................... No Opt. Call 6,160,393
AAA 2,000 Jacksonville Sales Tax Rev., 4.10%, 10/01/08, AMBAC ............................ No Opt. Call 2,073,300
AAA 2,000 Lakeland Elec. & Wtr. Rev., Jr. Sub. Lien, 5.90%, 10/01/08, FSA ................ No Opt. Call 2,270,540
Lakeland Hosp. Sys. Rev., Regl. Med. Care Ctr. Proj.,
AAA 9,850++ Ser. B, 6.10%, 11/15/02, FGIC ................................................. N/A 10,221,936
AAA 1,100 Lakeland Wastewtr. Impvt. Rev., 5.50%, 10/01/08, MBIA .......................... 10/02 @ 102 1,131,240
Lee Cnty. Arprt. Rev.,
AAA 3,000 4.25%, 10/01/09, FSA .......................................................... No Opt. Call 3,080,910
AAA 4,500++ Ser. A, 5.50%, 10/01/02, AMBAC ................................................ N/A 4,546,980
AAA 1,000++ Marion Cnty. Hosp. Dist. Rev., Munroe Regl. Med. Ctr., 6.20%, 10/01/02, FGIC ... N/A 1,032,080
AAA 3,750 Melbourne Wtr. & Swr. Rev., Ser. C, 6.25%, 10/01/08, FGIC ...................... 10/02 @ 102 3,863,100
AAA 11,000++ Miami Beach Hlth. Fac. Auth. Hosp. Rev., Mt. Sinai Med. Ctr. Proj.,
6.25%, 11/15/08, FSA .......................................................... N/A 11,421,410
AAA 2,000 Miami Dade Cnty. Edl. Fac. Rev., Ser. A, 4.875%, 4/01/09, AMBAC ................ No Opt. Call 2,145,160
See Notes to Financial Statements.
5
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
Miami Dade Cnty. Pub. Svc. Tax Rev., Pub. Impvt., AMBAC,
Aaa $ 1,535 3.40%, 4/01/08 ................................................................ No Opt. Call $ 1,531,439
Aaa 1,595 3.625%, 4/01/09 ............................................................... No Opt. Call 1,653,409
AAA 4,775 Miami Dade Cnty. Sch. Brd., COP, Ser. C, 5.25%, 8/01/11, FSA ................... 8/08 @ 101 5,136,324
Miami, GO, FGIC,
AAA 1,345 5.90%, 12/01/08 ............................................................... No Opt. Call 1,528,041
AAA 1,000 6.00%, 12/01/09 ............................................................... No Opt. Call 1,148,000
AAA 1,000 Orange Cnty. Pub. Svc. Tax, Rev., 5.70%, 10/01/08, FGIC ........................ 10/05 @ 102 1,099,680
Orange Cnty. Tourist Dev. Tax Rev., Ser. A,
AAA 5,130 4.00%, 10/01/08, AMBAC ........................................................ No Opt. Call 5,283,592
AAA 5,340 4.00%, 10/01/09, AMBAC ........................................................ No Opt. Call 5,457,960
AAA 1,005 5.85%, 10/01/08, MBIA ......................................................... ETM 1,143,630
AAA 495 5.85%, 10/01/08, MBIA ......................................................... No Opt. Call 559,093
Osceola Cnty Florida, AMBAC,
Aaa 1,810 3.75%, 10/01/08 ............................................................... No Opt. Call 1,840,987
Aaa 1,535 3.875%, 10/01/09 .............................................................. No Opt. Call 1,556,782
AAA 2,000 Osceola Cnty. Trans. Rev., Osceola Pkwy. Proj., 5.95%, 4/01/08, MBIA ........... 8/02 @ 102 2,047,020
AAA 3,100++ Palm Bay Util. Rev., Ser. B, 6.10%, 10/01/02, MBIA ............................. N/A 3,198,704
AAA 7,085 Pasco Cnty. Solid Wst. Disp. & Res. Rec. Sys. Rev., 6.00%, 4/01/09, FGIC ....... 8/02 @ 102 7,251,852
AAA 11,000 Pasco Cnty. Wtr. & Swr. Rev., Ser. A, 6.00%, 10/01/09, FGIC .................... 10/02 @ 102 11,325,160
AAA 1,000++ Seminole Cnty. Sch. Brd., COP, Ser. A, 5.90%, 7/01/04, MBIA .................... N/A 1,096,760
AAA 2,000 Seminole Cnty. Wtr. & Swr. Rev., 6.00%, 10/01/09, MBIA ......................... No Opt. Call 2,287,340
Tampa Wtr. & Swr. Rev., Ser. A, FGIC,
AAA 1,405++ 6.25%, 10/01/02 ............................................................... N/A 1,436,233
AAA 1,095 6.25%, 10/01/12 ............................................................... 10/02 @101 1,117,130
AAA 1,370 Village Ctr. Cmnty. Dev. Dist. Rec. Rev., Ser. A, 5.50%, 11/01/08, MBIA ........ No Opt. Call 1,526,646
AAA 4,065 Volusia Cnty. Edl. Fac. Auth. Rev., Embry-Riddle Aeronautical Univ.,
6.50%, 10/15/08, CONNIE LEE ................................................... 10/02 @ 102 4,197,031
Aaa 2,370 Volusia Cnty. Sales Tax Rev., Ser. B, 4.00%, 10/01/08, MBIA .................... No Opt. Call 2,443,636
------------
243,610,954
-----------
PUERTO RICO--1.2%
AAA 1,500 Puerto Rico Mun. Fin. Agcy., Ser. A, 5.625%, 8/01/10, FSA ...................... 8/09 @ 101 1,688,010
------------
TOTAL LONG-TERM INVESTMENTS (COST $233,511,562) ................................ 245,298,964
------------
SHORT-TERM INVESTMENT--3.5%
NR 5,000 SSgA Tax Free Money Market Fund
(cost $5,000,000) ............................................................. N/A 5,000,000
------------
TOTAL INVESTMENTS--177.3% (COST $238,511,562) .................................. 250,298,964
Liabilities in excess of other assets--(17.7)% ................................. (24,993,602)
Preferred shares at redemption value, including dividends payable--(59.6)% ..... (84,160,242)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ............................. $141,145,120
============
----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
+ Date (month/year) and price of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
++ This bond is prerefunded. See glossary for definition.
--------------------------------------------------------------------------------
KEY TO ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance Corporation
COP -- Certificate of Participation
CONNIE LEE -- College Construction Loan Insurance Association
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GO -- General Obligation
MBIA -- Municipal Bond Insurance Association
--------------------------------------------------------------------------------
See Notes to Financial Statements.
6
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $238,511,562)
(Note 1) .................................................. $250,298,964
Cash ........................................................ 699,774
Interest receivable ......................................... 3,887,825
Receivable from investments sold ............................ 175,000
Other assets ................................................ 28,589
------------
255,090,152
LIABILITIES
Dividends payable--common shares ............................ 544,193
Payable for securities purchased ............................ 29,079,637
Investment advisory fee payable (Note 2) .................... 64,673
Administration fee payable (Note 2) ......................... 18,478
Deferred Trustees fees (Note 1) ............................. 18,287
Other accrued expenses ...................................... 59,522
------------
29,784,790
------------
PREFERRED SHARES AT REDEMPTION VALUE
$.01 par value per share and $25,000 liquidation
value per share applicable to 3,366 shares,
including dividends payable (Note 1 & 4) .................. 84,160,242
------------
NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS: ........................................ $141,145,120
============
Composition of Net Assets Applicable to
Common Shareholders:
Par value (Note 4) ........................................ $ 87,071
Paid-in capital in excess of par .......................... 120,583,337
Undistributed net investment income (Note 1) .............. 8,687,310
Net unrealized appreciation (Note 1) ...................... 11,787,402
------------
Net assets applicable to common shareholders,
June 30, 2002 ............................................. $141,145,120
============
Net asset value per common share:
($141,145,120 / 8,707,093 common
shares of beneficial interest issued and
outstanding) .............................................. $ 16.21
============
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest (Note 1) ...................................... $ 6,142,134
-----------
Expenses
Investment advisory .................................... 389,025
Administration ......................................... 111,150
Auction agent .......................................... 110,889
Custodian .............................................. 37,597
Reports to shareholders ................................ 23,313
Independent accountants ................................ 18,118
Registration ........................................... 11,158
Trustees ............................................... 10,683
Legal .................................................. 10,518
Transfer agent ......................................... 10,290
Miscellaneous .......................................... 8,039
-----------
Total expenses ....................................... 740,780
Less fees paid indirectly (Note 2) ..................... (4,274)
-----------
Net expenses ........................................... 736,506
-----------
Net investment income .................................... 5,405,628
-----------
NET CHANGE IN UNREALIZED APPRECIATION
ON INVESTMENTS ........................................... 194,842
-----------
DIVIDENDS TO PREFERRED SHAREHOLDERS
FROM NET INVESTMENT INCOME ............................... (557,684)
-----------
NET INCREASE IN NET ASSETS APPLICABLE
TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ................................ $ 5,042,786
===========
See Notes to Financial Statements.
7
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 2002 2001(1)
------------- -----------
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
OPERATIONS:
Net investment income ............................................................ $ 5,405,628 $ 10,847,708
Net realized gain on investments ................................................. -- 588,052
Net change in unrealized appreciation (depreciation) on investments .............. 194,842 (977,970)
Dividends to preferred shareholders from net investment income ................... (557,684) (2,165,555)
Distributions to preferred shareholders from net realized gain on investments .... -- (130,062)
------------ ------------
Net increase in net assets resulting from operations ........................... 5,042,786 8,162,173
------------ ------------
Dividends and Distributions to Common Shareholders:
From net investment income ....................................................... (3,265,032) (6,530,101)
From net realized gain on investments ............................................ -- (344,261)
------------ ------------
Total dividends and distributions .............................................. (3,265,032) (6,874,362)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Unused offering costs relating to issuance of preferred shares ................... -- 162,147
------------ ------------
Total increase ................................................................. 1,777,754 1,449,958
------------ ------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
Beginning of period ................................................................ 139,367,366 137,917,408
------------ ------------
End of period (including undistributed net investment income of
$8,687,310 and $7,104,398, respectively) ......................................... $141,145,120 $139,367,366
============ ============
----------
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.
8
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,(1)
SIX MONTHS ENDED ------------------------------------------------------
JUNE 30, 2002 2001 2000 1999 1998 1997
------------- ---- ---- ---- ---- ----
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of the period(2) $ 16.01 $ 15.84 $ 15.56 $ 16.51 $ 16.35 $ 15.78
-------- -------- -------- -------- -------- --------
Investment operations:
Net investment income3 .................................... 0.61 1.25 1.24 1.17 1.18 1.17
Net realized and unrealized gain (loss) on investments(3) . 0.02 (0.04) 0.28 (1.02) 0.08 0.52
Dividends and distributions to preferred shareholders from:
Net investment income ..................................... (0.06) (0.25) (0.37) (0.24) (0.24) (0.26)
Net realized gain on investments .......................... -- (0.01) -- -- -- --
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations .......... 0.57 0.95 1.15 (0.09) 1.02 1.43
-------- -------- -------- -------- -------- --------
Dividends and distributions to common shareholders from:
Net investment income ..................................... (0.37) (0.75) (0.81) (0.86) (0.86) (0.86)
Net realized gain on investments .......................... -- (0.04) -- -- -- --
-------- -------- -------- -------- -------- --------
Total dividends and distributions ........................... (0.37) (0.79) (0.81) (0.86) (0.86) (0.86)
-------- -------- -------- -------- -------- --------
Capital charge with respect to issuance of preferred shares . -- 0.01 (0.06) -- -- --
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD(2) ........................... $ 16.21 $ 16.01 $ 15.84 $ 15.56 $ 16.51 $ 16.35
======== ======== ======== ======== ======== ========
Market value, end of period(2) .............................. $ 15.65 $ 15.40 $ 14.00 $ 14.13 $ 16.81 $ 16.06
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN(4) .................................. 4.12% 15.90% 4.96% (11.12)% 10.32% 12.25%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS(5):
Expenses before fees paid indirectly ........................ 1.07%(6) 1.10% 1.14% 0.99% 0.93% 0.97%
Expenses after fees paid indirectly ......................... 1.06%(6) 1.10% 1.14% 0.99% 0.93% 0.97%
Net investment income before preferred share dividends(3) ... 7.78%(6) 7.75% 7.94% 7.25% 7.17% 7.33%
Preferred shares dividends .................................. 0.80%(6) 1.55% 2.39% 1.50% 1.48% 1.65%
Net investment income available to common shareholders(3) ... 6.98%(6) 6.20% 5.55% 5.75% 5.69% 5.68%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (000) ............. $139,992 $140,004 $135,492 $140,225 $142,817 $138,890
Portfolio turnover .......................................... 4% 7% 0% 3% 0% 0%
Net assets of common shareholders, end of period (000) ...... $141,145 $139,367 $137,917 $135,459 $143,769 $142,343
Preferred shares outstanding (000) .......................... $ 84,150 $ 84,150 $ 84,150 $ 66,000 $ 66,000 $ 66,000
Asset coverage per preferred share, end of period ........... $ 66,936 $ 66,406 $ 65,982 $ 76,312 $ 79,460 $ 78,939
----------
(1) Prior year amounts have been restated to conform to the current period's
presentation under the provisions of EITF D-98 (Note 1).
(2) Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
(3) As required, January 1, 2001, 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. Per share, ratios
and supplemental data for years prior to 2001 have not been restated to
reflect this change.
(4) Total investment return is calculated assuming a purchase of a common share
at the current market price on the first day and a sale at the current
market price on the last day of each 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 shares relative to the average net assets of common
shareholders.
(6) Annualized The information above represents the unaudited operating
performance data for a common share outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
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.
9
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION % ACCOUNTING POLICIES
The BlackRock Florida Insured Municipal 2008 Term Trust (the "Trust") was
organized as a Massachusetts business trust on August 7, 1992 as a
non-diversified closed-end management investment company under the Investment
Company Act of 1940. The Trust's investment objectives are to provide current
income exempt from regular Federal income tax and Florida intangible personal
property taxes and to return $15 per share to investors on or about December 31,
2008. The ability of issuers of debt securities held by the Trust to meet their
obligations may be affected by economic developments in the state, a specific
industry or region. No assurance can be given that the Trust's investment
objectives 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 selected under the supervision of the
Trust's Trustees. 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 investments
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 Trustees.
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
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Trustees on February 24, 2000, non-interested Trustees 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 Trusts selected by the Trustees.
This has the same economic effect for the Trustees as if the Trustees had
invested the deferred amounts in such other BlackRock Trusts.
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 Trusts selected by
the Trustees in order to match its deferred compensation obligations.
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 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
10
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"), 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
assets value. The liquidation value of any outstanding preferred shares of the
Trust is not taken into account in determining the Trust's weekly net asset
value. The total dollar amounts paid to the Advisor by the Trust under the
Investment Advisory Agreement for the six months ended June 30, 2002 and the
years ended December 31, 2001, 2000 and 1999 were $389,025, $784,584, $759,138
and $721,787, respectively. The administration fee paid to the Administrator is
also computed weekly and payable monthly at an annual rate of 0.10% of the
Trust's average weekly net assets value. The total dollar amounts paid to the
Administrator by the Trust under the Administration Agreement for the six months
ended June 30, 2002 and the years ended December 31, 2001, 2000 and 1999 were
$111,150, $224,770, $216,897 and $206,225, 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 June 30,
2002, were approximately $4,274.
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investments securities, other than short-term
investments, for the six months ended June 30, 2002, aggregated $35,151,272 and
$8,337,550, respectively.
The Federal income tax basis of the Trust's investments at June 30, 2002 was
$238,234,751, and accordingly, net unrealized appreciation was $12,064,213
(gross unrealized appreciation--$12,070,192, gross unrealized
depreciation--$5,979).
NOTE 4. CAPITAL
There are 200 million common shares of $.01 par value authorized. The Trust may
classify or reclassify any unissued common shares into one or more series of
preferred shares. Of the 8,707,093 common shares outstanding at June 30, 2002,
the Advisor owned 7,093 shares. As of June 30, 2002, there were 3,366 Series R7
preferred shares outstanding.
Dividends on Series R7 shares are cumulative at a rate which is reset every 7
days based on the results of an auction. The dividend rates ranged from 0.15% to
1.65% during the six months ended June 30, 2002.
The Trust 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 would be less than 200%.
The preferred shares are 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 shares are 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
Declaration of Trust are not satisfied.
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 as a single class. However, holders of preferred shares are also entitled
to elect two of the Trust's Trustees. In addition, the Investment Company Act of
1940 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 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
Subsequent to June 30, 2002, the Board of Trustees of the Trust declared a
dividend of $0.0625 per common share payable August 1, 2002 to shareholders of
record on July 15, 2002. For the period July 1, 2002 to July 31, 2002, dividends
declared on preferred shares totaled $82,938.
11
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), common
shareholders may elect 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 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.
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 acquire shares for the participants' accounts
by the purchase of outstanding shares on the open market ("open market
purchases") on the New York Stock Exchange or elsewhere. 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. 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. There is no
direct service charge to participants in the Plan; however, the Trust reserves
the right to amend the Plan to include a service charge payable by the
participants. All correspondence concerning the Plan should be directed to the
Plan Agent at (800) 699-1BFM or 150 Royall Street, Canton, MA 02021.
12
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
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 Trustees as follows:
TRUSTEES: CLASS TERM EXPIRING
------- ------ ----- --------
Andrew F. Brimmer .... III 3 years 2005
Kent Dixon ........... III 3 years 2005
Laurence D. Fink* .... III 3 years 2005
Trustees whose term of office continues beyond this meeting are Richard E.
Cavanagh, James Clayburn La Force, Jr., Frank J. Fabozzi, Walter F. Mondale and
Ralph L. Schlosstein.
Shareholders elected the three Trustees. The results of the voting was as
follows:
VOTES FOR** VOTES AGAINST** ABSTENTIONS**
---------- ------------- ------------
Andrew F. Brimmer .... 8,307,934 -- 121,825
Kent Dixon ........... 8,308,000 -- 121,759
Laurence D. Fink* .... 8,306,914 -- 122,845
----------
* Laurence D. Fink has resigned his positions as Trustee and Chairman of the
Board effective August 22, 2002. The Board of Trustees elected Ralph L.
Schlosstein as the new Chairman of the Board, elected Robert S. Kapito as the
new President of the Trust and appointed Robert S. Kapito as a new Trustee of
the Board effective August 22, 2002.
** The votes represent common and preferred shareholders voting as a single
class.
Certain of the officers of the Trust listed on the back cover of this
Report to Shareholders, are also officers of the Advisor. They serve in the
following capacities for the Advisor: Robert S. Kapito--Director and Vice
Chairman, Kevin M. Klingert--Director and Managing Director, Henry
Gabbay--Managing Director and Anne Ackerley--Managing Director.
13
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Florida Insured Municipal 2008 Term Trust's investment objectives
are to provide current income exempt from regular Federal income tax and Florida
intangible personal property taxes and to return $15 per share (the initial
public offering price per share) to investors on or about December 31, 2008.
WHO MANAGES THE TRUST?
BlackRock Advisors, Inc. (the "Advisor") manages the Trust. The Advisor is a
wholly owned subsidiary of BlackRock, Inc. ("BlackRock"), which is one of the
largest publicly traded investment management firms in the United States with
$250 billion of assets under management as of June 30, 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?
The Trust intends to invest at least 80% of its total assets in Florida
municipal obligations insured as to the timely payment of both principal and
interest. The Trust may invest up to 20% of its total assets in uninsured
Florida municipal obligations which are rated "Aaa" by Moody's or "AAA" by S&P,
or are determined by the Advisor to be of comparable credit quality (guaranteed,
escrowed or backed in trust).
WHAT IS THE ADVISOR'S INVESTMENT STRATEGY?
The Advisor will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($15 per share)
on or about December 31, 2008. The Advisor will implement a strategy that will
seek to closely match the maturity or call provisions of the assets of the
portfolio with the future return of the initial investment at the end of 2008.
At the Trust's termination, BlackRock expects that the value of the securities
which have matured, combined with the value of the securities that are sold or
called, if any, will be sufficient to return the initial offering price to
investors. On a continuous basis, the Trust will seek its objective by actively
managing its portfolio of Florida municipal obligations and retaining a portion
of its income each year.
In addition to seeking the return of the initial offering price, the Advisor
also seeks to provide current income exempt from Federal income tax and Florida
intangible personal property taxes to investors. The portfolio managers will
attempt to achieve this objective by investing in securities that provide
competitive income. In addition, leverage will be used to enhance the income of
the portfolio. In order to maintain competitive yields as the Trust approaches
maturity and depending on market conditions, the Advisor will attempt to
purchase securities with call protection or maturities as close to the Trust's
maturity date as possible. Securities with call protection should provide the
portfolio with some degree of protection against reinvestment risk during times
of lower prevailing interest rates. Since the Trust's primary goal is to return
the initial offering price at maturity, any cash that the Trust receives prior
to its maturity date may be reinvested in securities with maturities which
coincide with the remaining term of the Trust. Since shorter-term securities
typically yield less than longer-term securities, this strategy will likely
result in a decline in the Trust's income over time. It is important to note
that the Trust will be managed so as to preserve the integrity of the return of
the initial offering price. If market conditions, such as high interest rate
volatility, force a choice between current income and risking the return of the
initial offering price, it is likely that the return of the initial offering
price will be emphasized.
14
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
TheTrust'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 it'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.
LEVERAGE CONSIDERATIONS IN THE TRUST
The Trust employs leverage primarily through the issuance of preferred shares.
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 interest rate environment, but can cause
net assets to decline faster in a rapidly rising interest 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 OBJECTIVES. Although the objectives of the Trust are to provide
current income exempt from regular Federal income tax and Florida intangible
personal property taxes, and to return $15 per share to investors on or about
December 31, 2008, there can be no assurance that these objectives will be
achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred shares,
which involves special risks. The Trust's net asset value and market value may
be 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: BRF) 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 involves 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 Trustees 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
altenative minimum tax.
15
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
GLOSSARY
--------------------------------------------------------------------------------
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. The 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 to
retire the bond in full at the date
indicated, typically at a premium to par.
16
--------------------------------------------------------------------------------
BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
--------------------------------------------------------------------------------
TAXABLE TRUSTS
------------------------------------------------------------------------------------------------------------------------------------
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
BlackRock California Municipal Income Trust II BCL N/A
BlackRock New York Municipal Income Trust II BFY N/A
BlackRock Municipal Income Trust II BLE 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.
17
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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 $250 billion of assets under management as of
June 30, 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, 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.
18
BLACKROCK [LOGO]
TRUSTEES
Ralph L. Schlosstein, CHAIRMAN*
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
Robert S. Kapito*
James Clayburn La Force, Jr.
Walter F. Mondale
OFFICERS
Robert S. Kapito, 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 AUDITORS
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 TRUSTEES
Debevoise & Plimpton
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of June 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 Trust shares.
Statements and other information contained in this report are as dated and
are subject to change.
* Laurence D. Fink has resigned his positions as Trustee and Chairman of the
Board effective August 22, 2002. The Board of Trustees elected Ralph L.
Schlosstein as the new Chairman of the Board, elected Robert S. Kapito as the
new President of the Trust and appointed Robert S. Kapito as a new Trustee of
the Board effective August 22, 2002.
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
c/o Princeton Administrators, L.P.
P.O. Box 9095, Princeton, NJ 08543-9095
(800) 543-6217
09247H-10-6
[Logo] Printed on recycled paper 09247H-20-5
THE [LOGO] BLACKROCK
FLORIDA INSURED
MUNICIPAL 2008
TERM TRUST
--------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 2002
[LOGO] BLACKROCK