UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-10339
Name of Fund: BlackRock Municipal Income Trust (BFK)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Municipal Income
Trust, 55 East 52nd Street, New York, NY 10055
Registrants telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 04/30/2020
Date of reporting period: 04/30/2020
Item 1 Report to Stockholders
|
APRIL 30, 2020 |
2020 Annual Report |
BlackRock Investment Quality Municipal Trust, Inc. (BKN)
BlackRock Long-Term Municipal Advantage Trust (BTA)
BlackRock Municipal Income Trust (BFK)
BlackRock Strategic Municipal Trust (BSD)
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Trusts shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
You may elect to receive all future reports in paper free of charge. If you hold accounts directly with BlackRock, you can call Computershare at (800) 699-1236 to request that you continue receiving paper copies of your shareholder reports. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds advised by BlackRock Advisors, LLC or its affiliates, or all funds held with your financial intermediary, as applicable.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications by contacting your financial intermediary, if you hold accounts through a financial intermediary. Please note that not all financial intermediaries may offer this service.
Not FDIC Insured May Lose Value No Bank Guarantee |
Dear Shareholder,
The last 12 months have been a time of sudden change in global financial markets, as a long period of growth and positive returns was interrupted in early 2020 by the emergence and spread of the coronavirus. For much of the reporting period, U.S. equities and bonds both delivered impressive returns, despite fears and doubts about the economy that were ultimately laid to rest with unprecedented monetary stimulus and a sluggish yet resolute performance from the U.S. economy. But as the threat from the coronavirus became more apparent throughout February and March 2020, leading countries around the world took economically disruptive countermeasures, causing equity prices to fall sharply. While markets have since recovered some of these losses as countries around the world begin reopening, there is still significant uncertainty surrounding the long-term impact of the pandemic on the global economy.
Returns for most securities were robust for the first three quarters of the reporting period, as investors began to realize that the U.S. economy was maintaining the modest yet steady growth that had characterized this economic cycle. However, once stay-at-home orders and closures of non-essential businesses became widespread, many workers were laid off and unemployment claims spiked. With large portions of the global economy on hold, all types of international equities ended the reporting period with negative performance, while in the U.S. only large-capitalization stocks delivered a slightly positive return.
The performance of different types of fixed-income securities diverged substantially due to a reduced investor appetite for risk. Treasuries benefited from the risk-off environment, and posted healthy returns, as the 10-year yield (which is inversely related to bond prices) fell to an all-time low. Investment-grade corporate bonds also delivered a positive return, while high-yield corporates were down due to credit concerns.
The U.S. Federal Reserve (the Fed) reduced interest rates three times in 2019, to support slowing economic growth. After the coronavirus outbreak, the Fed instituted two emergency rate cuts, pushing short-term interest rates close to zero. To stabilize credit markets, the Fed also announced a new bond-buying program, as did several other central banks around the world, including the European Central Bank and the Bank of Japan.
Looking ahead, while coronavirus-related disruption is certain to hurt worldwide economic growth, the global expansion is likely to continue once the impact of the outbreak subsides. Nonetheless, there are promising signs that a strong coordinated monetary and fiscal response is underway, both in the United States and abroad. With measures being taken to contain the virus and provide support to impacted businesses and individuals, we anticipate a sharp increase in economic activity as life returns to normal.
Overall, we favor a neutral stance toward risk, given the uncertainty surrounding the economic impact of coronavirus countermeasures. Among equities, we see an advantage in U.S. stocks compared to other developed markets, given the diversity of the U.S. economy and the impressive scope of monetary and fiscal stimulus. In bonds, the swift action taken by the worlds central banks means there are attractive opportunities in credit, and we expect credit spreads to narrow as markets stabilize. Both U.S. Treasuries and sustainable investments can help provide portfolio resilience, and the disruption created by the coronavirus appears to be accelerating the shift toward sustainable investments.
In this environment, investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in todays markets.
Sincerely,
Rob Kapito
President, BlackRock Advisors, LLC
Rob Kapito
President, BlackRock Advisors, LLC
Total Returns as of April 30, 2020 | ||||
6-month | 12-month | |||
U.S. large cap equities
|
(3.16)% | 0.86% | ||
U.S. small cap equities
|
(15.47) | (16.39) | ||
International equities
|
(14.21) | (11.34) | ||
Emerging market equities
|
(10.50) | (12.00) | ||
3-month Treasury bills
|
0.85 | 2.07 | ||
U.S. Treasury securities
|
10.73 | 19.78 | ||
U.S. investment grade bonds
|
4.86 | 10.84 | ||
Tax-exempt municipal bonds
|
(1.26) | 2.21 | ||
U.S. high yield bonds
|
(6.60) | (4.08) | ||
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. |
2 | THIS PAGE IS NOT PART OF YOUR FUND REPORT |
Page | ||||
2 | ||||
Annual Report: |
||||
4 | ||||
5 | ||||
5 | ||||
6 | ||||
Financial Statements: |
||||
14 | ||||
42 | ||||
43 | ||||
44 | ||||
46 | ||||
47 | ||||
51 | ||||
61 | ||||
62 | ||||
63 | ||||
66 | ||||
68 |
3 |
Municipal Market Overview For the Reporting Period Ended April 30, 2020
Municipal Market Conditions
Municipal bonds posted modestly positive total returns amid a bifurcated market narrative in which rallying interest rates and favorable technicals drove strong performance early in the period before sentiment changed as implications of the coronavirus pandemic materialized. During the month of March, municipal bonds experienced volatility that was worse than during the height of the global financial crisis, as performance plummeted -10.87% during a two-week period before rebounding on aggressive valuation-based buying (For comparison, the -11.86% correction in 2008 spanned more than a month.) Performance continued to be hindered in April by the negative fundamental impacts of the prolonged economic shutdown, despite numerous stimulus efforts by the Fed.
Technical support waned during the period as a streak of 60-consecutive weeks of inflows turned to record outflows. During the 12 months ended April 30, 2020, municipal bond funds experienced net inflows totaling $38 billion, drawn down by nearly $46 billion in outflows during the months of March and April (based on data from the Investment Company Institute). For the same 12-month period, new issuance was elevated from a historical perspective at $417 billion but slowed materially as market liquidity became constrained amid a flight to quality spurred by the pandemic. | S&P Municipal Bond Index | |
Total Returns as of April 30, 2020 | ||
6 months: (1.26)% | ||
12 months: 2.21% | ||
A Closer Look at Yields
|
From April 30, 2019 to April 30, 2020, yields on AAA-rated 30-year municipal bonds decreased by 27 basis points (bps) from 2.55% to 2.28%, while ten-year rates decreased by 40 bps from 1.86% to 1.46% and five-year rates decreased by 54 bps from 1.63% to 1.09% (as measured by Thomson Municipal Market Data). As a result, the municipal yield curve steepened over the 12-month period with the spread between two- and 30-year maturities steepening by 39 bps, on par with the 41 bps of steepening in the comparable U.S. Treasury curve. |
During the same time period, tax-exempt municipal bonds significantly underperformed U.S. Treasuries across the yield curve. Relative valuations, which had been broadly stretched since the passage of tax reform, reset to levels not seen since 2008. This has resulted in increased participation from crossover investors in a market that has mainly been driven by retail over the past few years.
Financial Conditions of Municipal Issuers
The coronavirus pandemic is an unprecedented shock to the system impacting nearly every sector in the municipal market. Luckily, most states and municipalities were in excellent fiscal health before the crisis and the federal government has provided an incredible amount of support. Ongoing stability is expected in high-quality states as well as school districts and local governments given that property taxes have proven resilient in past economic downturns. Essential public services such as power, water, and sewer are protected segments. State housing authority bonds, flagship universities, and strong national and regional health systems are well positioned to absorb the impact of the economic shock. However, some segments are facing daunting financial challenges and federal support may be insufficient, requiring issuers to draw down reserves and/or borrow to meet financial obligations. Critical providers (such as safety net hospitals, mass transit and airports) with limited resources will require funding from the states and broader municipalities they serve. We anticipate that a small subset of the market, mainly non-rated stand-alone projects, will experience significant credit deterioration. Assuming the worst case, a prolonged recession would likely mean a spate of defaults, primarily in non-rated credits, and the migration of the municipal markets overall credit quality from double-A to a still-strong single-A rating. As a result, we advocate careful credit selection and anticipate increased credit dispersion as the market navigates near-term uncertainty.
The opinions expressed are those of BlackRock as of April 30, 2020 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. Investing involves risk, including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable.
The S&P Municipal Bond Index, a broad, market value-weighted index, seeks to measure the performance of the U.S. municipal bond market. All bonds in the index are exempt from U.S. federal income taxes or subject to the AMT. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.
4 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
The Benefits and Risks of Leveraging
The Trusts may utilize leverage to seek to enhance the distribution rate on, and net asset value (NAV) of, their common shares (Common Shares). However, there is no guarantee that these objectives can be achieved in all interest rate environments.
In general, the concept of leveraging is based on the premise that the financing cost of leverage, which is based on short-term interest rates, is normally lower than the income earned by a Trust on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Trusts shareholders benefit from the incremental net income. The interest earned on securities purchased with the proceeds from leverage (after paying the leverage costs) is paid to shareholders in the form of dividends, and the value of these portfolio holdings (less the leverage liability) is reflected in the per share NAV.
To illustrate these concepts, assume a Trusts Common Shares capitalization is $100 million and it utilizes leverage for an additional $30 million, creating a total value of $130 million available for investment in longer-term income securities. If prevailing short-term interest rates are 3% and longer-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, a Trusts financing costs on the $30 million of proceeds obtained from leverage are based on the lower short-term interest rates. At the same time, the securities purchased by a Trust with the proceeds from leverage earn income based on longer-term interest rates. In this case, a Trusts financing cost of leverage is significantly lower than the income earned on a Trusts longer-term investments acquired from such leverage proceeds, and therefore the holders of Common Shares (Common Shareholders) are the beneficiaries of the incremental net income.
However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the Trusts return on assets purchased with leverage proceeds, income to shareholders is lower than if the Trust had not used leverage. Furthermore, the value of a Trusts portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the value of each Trusts obligations under its respective leverage arrangement generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence each Trusts NAVs positively or negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that a Trusts intended leveraging strategy will be successful.
The use of leverage also generally causes greater changes in each Trusts NAV, market price and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the NAV and market price of a Trusts Common Shares than if the Trust were not leveraged. In addition, each Trust may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Trust to incur losses. The use of leverage may limit a Trusts ability to invest in certain types of securities or use certain types of hedging strategies. Each Trust incurs expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares. Moreover, to the extent the calculation of each Trusts investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Trusts investment adviser will be higher than if the Trusts did not use leverage.
To obtain leverage, each Trust has issued Variable Rate Demand Preferred Shares (VRDP Shares) or Variable Rate Muni Term Preferred Shares (VMTP Shares) (collectively, Preferred Shares) and/or leveraged its assets through the use of tender option bond trusts (TOB Trusts) as described in the Notes to Financial Statements.
Under the Investment Company Act of 1940, as amended (the 1940 Act), each Trust is permitted to issue debt up to 331⁄3% of its total managed assets or equity securities (e.g., Preferred Shares) up to 50% of its total managed assets. A Trust may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Trust may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by the Preferred Shares governing instruments or by agencies rating the Preferred Shares, which may be more stringent than those imposed by the 1940 Act.
If a Trust segregates or designates on its books and records cash or liquid assets having a value not less than the value of a Trusts obligations under the TOB Trust (including accrued interest), then the TOB Trust is not considered a senior security and is not subject to the foregoing limitations and requirements imposed by the 1940 Act.
Derivative Financial Instruments
The Trusts may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Trusts successful use of a derivative financial instrument depends on the investment advisers ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Trust can realize on an investment and/or may result in lower distributions paid to shareholders. The Trusts investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.
THE BENEFITS AND RISKS OF LEVERAGING / DERIVATIVE FINANCIAL INSTRUMENTS | 5 |
Trust Summary as of April 30, 2020 | BlackRock Investment Quality Municipal Trust, Inc. |
Investment Objective
BlackRock Investment Quality Municipal Trust, Inc.s (BKN) (the Trust) investment objective is to provide high current income exempt from regular U.S. federal income tax consistent with the preservation of capital. The Trust seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations that pay interest that is exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). Under normal market conditions, the Trust invests at least 80% of its assets in securities rated investment grade at the time of investment. The Trust may invest up to 20% of its assets in unrated securities that are deemed by the investment adviser to be of comparable quality. The Trust may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Trusts investment objective will be achieved.
Trust Information
Symbol on New York Stock Exchange (NYSE) |
BKN | |
Initial Offering Date |
February 19, 1993 | |
Yield on Closing Market Price as of April 30, 2020 ($14.75)(a) |
4.80% | |
Tax Equivalent Yield(b) |
8.11% | |
Current Monthly Distribution per Common Share(c) |
$0.0590 | |
Current Annualized Distribution per Common Share(c) |
$0.7080 | |
Leverage as of April 30, 2020(d) |
42% |
(a) |
Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
(b) |
Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
(c) |
The monthly distribution per Common Share, declared on June 1, 2020, was increased to $0.0630 per share. The yield on closing market price, tax equivalent yield, current monthly distribution per Common Share, and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future. |
(d) |
Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2020 were as follows:
Returns Based On | ||||||||
Market Price | NAV | |||||||
BKN(a)(b) |
7.77 | % | (1.16 | )% | ||||
Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
(3.22 | ) | (2.24 | ) |
(a) |
All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
(b) |
The Trusts discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
(c) |
Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Trusts absolute performance based on NAV:
Municipal bonds performed well for most of the period due to the accommodative Fed policy and favorable supply-and-demand trends in the market. This supportive backdrop changed abruptly in March once the spread of the coronavirus pandemic led to travel restrictions, business closures and stay-at-home orders. The prospect of a sharp economic downturn led to significant, broad-based weakness across the financial markets. Tax-exempt issues were hard hit in the sell-off, as investors withdrew cash from municipal bond funds and a lack of market liquidity inhibited efficient pricing. Municipal bonds subsequently recovered in April following aggressive stimulus from the Fed and U.S. Congress, allowing the category to close the period with a narrow gain.
The Trusts use of U.S. Treasury futures to manage interest rate risk proved detrimental to the Trusts performance given the breakdown in correlation between the Treasury and municipal markets arising from the coronavirus pandemic. While municipal bond yields rose due to a substantial increase in yield spreads, Treasury yields declined amid investors flight to quality. (Prices and yields move in opposite directions.) The Trusts use of leverage also weighed on the Trusts results at a time of falling bond prices.
Positions in lower-rated securities also detracted, as this market segment underperformed by a wide margin at a time of heightened uncertainty. Lower-quality states such as Illinois and New Jersey were especially notable laggards. Both are facing a likely reduction in tax revenues due to the stay-at-home orders and business closures that resulted from the coronavirus pandemic.
Portfolio income contributed to performance. Positions in higher-rated securities and issuers that focus on essential services also helped Trust returns, particularly during the market turmoil in March.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
6 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Trust Summary as of April 30, 2020 (continued) | BlackRock Investment Quality Municipal Trust, Inc. |
Market Price and Net Asset Value Per Share Summary
04/30/20 | 04/30/19 | Change | High | Low | ||||||||||||||||
Market Price |
$ | 14.75 | $ | 14.31 | 3.07 | % | $ | 16.26 | $ | 10.76 | ||||||||||
Net Asset Value |
14.89 | 15.75 | (5.46 | ) | 17.13 | 13.41 |
Market Price and Net Asset Value History For the Past Five Years
Overview of the Trusts Total Investments*
SECTOR ALLOCATION
Sector | 04/30/20 | 04/30/19 | ||||||
County/City/Special District/School District |
20 | % | 20 | % | ||||
Transportation |
16 | 16 | ||||||
Health |
16 | 15 | ||||||
Utilities |
12 | 10 | ||||||
State |
11 | 11 | ||||||
Education |
10 | 10 | ||||||
Tobacco |
6 | 6 | ||||||
Housing |
6 | 5 | ||||||
Corporate |
3 | 7 |
For Trust compliance purposes, the Trusts sector classifications refer to one or more of the sector subclassifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector subclassifications for reporting ease. |
CALL/MATURITY SCHEDULE (c)
Calendar Year Ended December 31, |
||||
2020 |
5 | % | ||
2021 |
8 | |||
2022 |
11 | |||
2023 |
10 | |||
2024 |
10 |
(c) |
Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. |
* |
Excludes short-term securities. |
CREDIT QUALITY ALLOCATION (a)
Credit Rating | 04/30/20 | 04/30/19 | ||||||
AAA/Aaa |
5 | % | 4 | % | ||||
AA/Aa |
36 | 37 | ||||||
A |
28 | 27 | ||||||
BBB/Baa |
13 | 17 | ||||||
BB/Ba |
4 | 2 | ||||||
B/B |
2 | 4 | ||||||
CC |
1 | 1 | ||||||
N/R(b) |
11 | 8 |
(a) |
For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moodys Investors Service (Moodys) if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
(b) |
The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of April 30, 2020 and April 30, 2019, the market value of unrated securities deemed by the investment adviser to be investment grade represents less than 2% and 1%, respectively, of the Trusts total investments. |
TRUST SUMMARY | 7 |
Trust Summary as of April 30, 2020 | BlackRock Long-Term Municipal Advantage Trust |
Investment Objective
BlackRock Long-Term Municipal Advantage Trusts (BTA) (the Trust) investment objective is to provide current income exempt from regular U.S. federal income tax. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal obligations and derivative instruments with exposure to such municipal obligations, in each case that are expected to pay interest or income that is exempt from U.S. federal income tax (except that the interest may be subject to the U.S. federal alternative minimum tax). The Trust invests, under normal market conditions, primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment and, under normal market conditions, the Trusts municipal bond portfolio will have a dollar-weighted average maturity of greater than ten years. The Trust may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Trusts investment objective will be achieved.
Trust Information
Symbol on NYSE |
BTA | |
Initial Offering Date |
February 28, 2006 | |
Yield on Closing Market Price as of April 30, 2020 ($10.92)(a) |
5.55% | |
Tax Equivalent Yield(b) |
9.38% | |
Current Monthly Distribution per Common Share(c) |
$0.0505 | |
Current Annualized Distribution per Common Share(c) |
$0.6060 | |
Leverage as of April 30, 2020(d) |
43% |
(a) |
Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
(b) |
Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
(c) |
The distribution rate is not constant and is subject to change. |
(d) |
Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2020 were as follows:
Returns Based On | ||||||||
Market Price | NAV | |||||||
BTA(a)(b) |
(3.49 | )% | (5.70 | )% | ||||
Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
(3.22 | ) | (2.24 | ) |
(a) |
All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
(b) |
The Trusts discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
(c) |
Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Trusts absolute performance based on NAV:
Municipal bonds performed well for most of the period due to the accommodative Fed policy and favorable supply-and-demand trends in the market. This supportive backdrop changed abruptly in March once the spread of the coronavirus pandemic led to travel restrictions, business closures and stay-at-home orders. The prospect of a sharp economic downturn led to significant, broad-based weakness across the financial markets. Tax-exempt issues were hard hit in the sell-off, as investors withdrew cash from municipal bond funds and a lack of market liquidity inhibited efficient pricing. Municipal bonds subsequently recovered in April following aggressive stimulus from the Fed and U.S. Congress, allowing the category to close the period with a narrow gain.
The Trusts use of U.S. Treasury futures to manage interest rate risk proved detrimental to the Trusts performance given the breakdown in correlation between the Treasury and municipal markets arising from the coronavirus pandemic. While municipal bond yields rose due to a substantial increase in yield spreads, Treasury yields declined as a result of investors flight to quality. (Prices and yields move in opposite directions.) The Trusts use of leverage, while augmenting income, also weighed on the Trusts results at a time of falling bond prices.
The portfolios allocation to BBB issues and lower-rated securities, particularly those with maturities of 25 years and above, detracted from Trust performance. Yield spreads on lower-quality issues widened (significantly in some cases) as the market began to price in the uncertainties around the fundamental impact of the coronavirus pandemic.
Positions in education and health care issues, which were among the sectors hit hardest in the sell-off, also detracted from the Trusts performance. Positions in the tax-backed state sector further detracted as lower-rated issuers such as Illinois, New Jersey and Puerto Rico underperformed.
Portfolio income contributed to performance. Positions in higher-rated securities (those rated A and above) also helped Trust returns. This segment included more seasoned portfolio positions, highlighted by pre-refunded securities and holdings in the utilities sector.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
8 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Trust Summary as of April 30, 2020 (continued) | BlackRock Long-Term Municipal Advantage Trust |
Market Price and Net Asset Value Per Share Summary
04/30/20 | 04/30/19 | Change | High | Low | ||||||||||||||||
Market Price |
$ | 10.92 | $ | 11.88 | (8.08 | )% | $ | 13.76 | $ | 8.61 | ||||||||||
Net Asset Value |
11.20 | 12.47 | (10.18 | ) | 13.36 | 10.23 |
Market Price and Net Asset Value History For the Past Five Years
Overview of the Trusts Total Investments*
SECTOR ALLOCATION
Sector | 04/30/20 | 04/30/19 | ||||||
County/City/Special District/School District |
19 | % | 17 | % | ||||
Utilities |
16 | 14 | ||||||
Transportation |
16 | 16 | ||||||
Health |
15 | 17 | ||||||
Tobacco |
11 | 11 | ||||||
State |
8 | 8 | ||||||
Education |
8 | 8 | ||||||
Corporate |
5 | 5 | ||||||
Housing |
2 | 4 |
For Trust compliance purposes, the Trusts sector classifications refer to one or more of the sector subclassifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector subclassifications for reporting ease. |
CALL/MATURITY SCHEDULE (c)
Calendar Year Ended December 31, |
||||
2020 |
9 | % | ||
2021 |
15 | |||
2022 |
5 | |||
2023 |
10 | |||
2024 |
8 |
(c) |
Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. |
* |
Excludes short-term securities. |
CREDIT QUALITY ALLOCATION (a)
Credit Rating | 04/30/20 | 04/30/19 | ||||||
AAA/Aaa |
3 | % | 2 | % | ||||
AA/Aa |
31 | 32 | ||||||
A |
17 | 15 | ||||||
BBB/Baa |
19 | 20 | ||||||
BB/Ba |
9 | 6 | ||||||
B/B |
4 | 7 | ||||||
CC |
1 | | ||||||
N/R(b) |
16 | 18 |
(a) |
For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moodys if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
(b) |
The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of April 30, 2020 and April 30, 2019, the market value of unrated securities deemed by the investment adviser to be investment grade represents 2% and less than 1%, respectively, of the Trusts total investments. |
TRUST SUMMARY | 9 |
Trust Summary as of April 30, 2020 | BlackRock Municipal Income Trust |
Investment Objective
BlackRock Municipal Income Trusts (BFK) (the Trust) investment objective is to provide current income exempt from regular U.S. federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds that pay interest that is exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade, or if unrated, deemed to be of comparable quality by the investment adviser, at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Trusts investment objective will be achieved.
Trust Information
Symbol on NYSE |
BFK | |
Initial Offering Date |
July 27, 2001 | |
Yield on Closing Market Price as of April 30, 2020 ($12.14)(a) |
5.29% | |
Tax Equivalent Yield(b) |
8.94% | |
Current Monthly Distribution per Common Share(c) |
$0.0535 | |
Current Annualized Distribution per Common Share(c) |
$0.6420 | |
Leverage as of April 30, 2020(d) |
41% |
(a) |
Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
(b) |
Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
(c) |
The monthly distribution per Common Share, declared on June 1, 2020, was increased to $0.0565 per share. The yield on closing market price, tax equivalent yield, current monthly distribution per Common Share, and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future. |
(d) |
Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2020 were as follows:
Returns Based On | ||||||||
Market Price | NAV | |||||||
BFK(a)(b) |
(7.74 | )% | (4.51 | )% | ||||
Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
(3.22 | ) | (2.24 | ) |
(a) |
All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
(b) |
The Trusts discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
(c) |
Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Trusts absolute performance based on NAV:
Municipal bonds performed well for most of the period due to the accommodative Fed policy and favorable supply-and-demand trends in the market. This supportive backdrop changed abruptly in March once the spread of the coronavirus pandemic led to travel restrictions, business closures and stay-at-home orders. The prospect of a sharp economic downturn led to significant, broad-based weakness across the financial markets. Tax-exempt issues were hard hit in the sell-off, as investors withdrew cash from municipal bond funds and a lack of market liquidity inhibited efficient pricing. Municipal bonds subsequently recovered in April following aggressive stimulus from the Fed and U.S. Congress, allowing the category to close the period with a narrow gain.
Prior to the March downturn, the Trust benefited from its investments in longer-dated securities with maturities of 20 years and above. Holdings in bonds on the lower end of the investment-grade spectrum (A and BBB) also aided Trust performance in this time, as did positions in the tax-backed, transportation and tobacco sectors. Once the market turned lower, these same factors detracted from the Trusts results and were the primary reason for the Trusts negative return for the full period.
The Trusts use of U.S. Treasury futures to manage interest rate risk proved detrimental to the Trusts performance given the breakdown in correlation between the Treasury and municipal markets arising from the coronavirus pandemic. While municipal bond yields rose due to a substantial increase in yield spreads, Treasury yields declined amid investors flight to quality. (Prices and yields move in opposite directions.) The Trusts use of leverage also weighed on the Trusts results at a time of falling bond prices.
On the positive side, holdings in AAA and AA rated debt performed better in the sell-off compared to other areas of the market.
The investment adviser increased the Trusts duration, thereby moving away from the more defensive posture it held for the majority of the period. This change reflected the investment advisers belief that yields had fallen to low levels that indicated little additional upside potential from rate movements.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
10 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Trust Summary as of April 30, 2020 (continued) | BlackRock Municipal Income Trust |
Market Price and Net Asset Value Per Share Summary
04/30/20 | 04/30/19 | Change | High | Low | ||||||||||||||||
Market Price |
$ | 12.14 | $ | 13.79 | (11.97 | )% | $ | 15.16 | $ | 9.26 | ||||||||||
Net Asset Value |
12.91 | 14.17 | (8.89 | ) | 15.17 | 11.87 |
Market Price and Net Asset Value History For the Past Five Years
Overview of the Trusts Total Investments*
SECTOR ALLOCATION
Sector | 04/30/20 | 04/30/19 | ||||||
Transportation |
22 | % | 24 | % | ||||
Utilities |
22 | 20 | ||||||
County/City/Special District/School District |
15 | 12 | ||||||
Health |
12 | 15 | ||||||
Tobacco |
10 | 9 | ||||||
State |
9 | 9 | ||||||
Education |
6 | 6 | ||||||
Corporate |
4 | 4 | ||||||
Housing |
| (a) | 1 |
(a) |
Rounds to less than 1%. |
For Trust compliance purposes, the Trusts sector classifications refer to one or more of the sector subclassifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector subclassifications for reporting ease.
CALL/MATURITY SCHEDULE (d)
Calendar Year Ended December 31, |
||||
2020 |
11 | % | ||
2021 |
13 | |||
2022 |
10 | |||
2023 |
7 | |||
2024 |
7 |
(d) |
Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. |
* |
Excludes short-term securities. |
CREDIT QUALITY ALLOCATION (b)
Credit Rating |
04/30/20 |
04/30/19 | ||||||
AAA/Aaa |
5 | % | 3 | % | ||||
AA/Aa |
29 | 32 | ||||||
A |
25 | 24 | ||||||
BBB/Baa |
22 | 24 | ||||||
BB/Ba |
8 | 4 | ||||||
B/B |
2 | 4 | ||||||
CC |
| 1 | ||||||
N/R(c) |
9 | 8 |
(b) |
For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moodys if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
(c) |
The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of April 30, 2020 and April 30, 2019, the market value of unrated securities deemed by the investment adviser to be investment grade each represents 2% and less than 1% respectively of the Trusts total investments. |
TRUST SUMMARY | 11 |
Trust Summary as of April 30, 2020 | BlackRock Strategic Municipal Trust |
Investment Objective
BlackRock Strategic Municipal Trusts (BSD) (the Trust) investment objectives are to provide current income that is exempt from regular U.S. federal income tax and to invest in municipal bonds that over time will perform better than the broader municipal bond market. The Trust seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its assets in investments exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). The Trust invests at least 80% of its assets in securities that are investment grade, or if unrated, deemed to be of comparable quality by the investment adviser, at the time of investment and, under normal market conditions, primarily invests in municipal bonds with long-term maturities in order to maintain a weighted average maturity of 15 years or more, but the dollar-weighted average maturity of obligations held by the Trust may be shortened, depending on market conditions. The Trust may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Trusts investment objectives will be achieved.
Trust Information
Symbol on NYSE |
BSD | |
Initial Offering Date |
August 25, 1999 | |
Yield on Closing Market Price as of April 30, 2020 ($12.17)(a) |
5.42% | |
Tax Equivalent Yield(b) |
9.16% | |
Current Monthly Distribution per Common Share(c) |
$0.0550 | |
Current Annualized Distribution per Common Share(c) |
$0.6600 | |
Leverage as of April 30, 2020(d) |
42% |
(a) |
Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
(b) |
Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
(c) |
The distribution rate is not constant and is subject to change. |
(d) |
Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2020 were as follows:
Returns Based On | ||||||||
Market Price | NAV | |||||||
BSD(a)(b) |
(3.38 | )% | (4.10 | )% | ||||
Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
(3.22 | ) | (2.24 | ) |
(a) |
All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
(b) |
The Trusts discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
(c) |
Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Trusts absolute performance based on NAV:
Municipal bonds performed well for most of the period due to the accommodative Fed policy and favorable supply-and-demand trends in the market. This supportive backdrop changed abruptly in March once the spread of the coronavirus pandemic led to travel restrictions, business closures and stay-at-home orders. The prospect of a sharp economic downturn led to significant, broad-based weakness across the financial markets. Tax-exempt issues were hard hit in the sell-off, as investors withdrew cash from municipal bond funds and a lack of market liquidity inhibited efficient pricing. Municipal bonds subsequently recovered in April following aggressive stimulus from the Fed and U.S. Congress, allowing the category to close the period with a narrow gain.
The Trusts use of U.S. Treasury futures to manage interest rate risk proved detrimental to the Trusts performance given the breakdown in correlation between the Treasury and municipal markets arising from the pandemic. While municipal bond yields rose due to a substantial increase in yield spreads, Treasury yields declined as a result of investors flight to quality. (Prices and yields move in opposite directions.) The Trusts use of leverage, while augmenting income, also weighed on the Trusts results at a time of falling bond prices.
The portfolios allocation to BBB issues and lower-rated securities detracted from performance. Yield spreads on lower-quality issues widened (significantly in some cases) as the market began to price in the uncertainties around the fundamental impact of the coronavirus pandemic.
Positions in the tax-backed state sector detracted as lower-rated issuers such as Illinois, New Jersey and Puerto Rico underperformed. An allocation to the corporate sector was an additional detractor.
Portfolio income contributed to performance. Positions in higher-rated securities (those rated A and above) also helped Trust returns. This segment included more seasoned portfolio positions, highlighted by pre-refunded securities and holdings in the housing sector.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
12 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Trust Summary as of April 30, 2020 (continued) | BlackRock Strategic Municipal Trust |
Market Price and Net Asset Value Per Share Summary
04/30/20 | 04/30/19 | Change | High | Low | ||||||||||||||||
Market Price |
$ | 12.17 | $ | 13.21 | (7.87 | )% | $ | 15.39 | $ | 9.96 | ||||||||||
Net Asset Value |
12.94 | 14.15 | (8.55 | ) | 15.15 | 11.88 |
Market Price and Net Asset Value History For the Past Five Years
Overview of the Trusts Total Investments*
SECTOR ALLOCATION
Sector | 04/30/20 | 04/30/19 | ||||||
Transportation |
23 | % | 22 | % | ||||
Health |
16 | 18 | ||||||
County/City/Special District/School District |
15 | 12 | ||||||
Utilities |
13 | 11 | ||||||
State |
8 | 8 | ||||||
Tobacco |
8 | 8 | ||||||
Corporate |
7 | 9 | ||||||
Education |
6 | 7 | ||||||
Housing |
4 | 5 |
For Trust compliance purposes, the Trusts sector classifications refer to one or more of the sector subclassifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector subclassifications for reporting ease. |
CALL/MATURITY SCHEDULE (c)
Calendar Year Ended December 31, |
||||
2020 |
8 | % | ||
2021 |
12 | |||
2022 |
9 | |||
2023 |
8 | |||
2024 |
10 |
(c) |
Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. |
* |
Excludes short-term securities. |
CREDIT QUALITY ALLOCATION (a)
Credit Rating | 04/30/20 | 04/30/19 | ||||||
AAA/Aaa |
2 | % | 4 | % | ||||
AA/Aa |
35 | 32 | ||||||
A |
19 | 20 | ||||||
BBB/Baa |
23 | 22 | ||||||
BB/Ba |
5 | 3 | ||||||
B/B |
1 | 3 | ||||||
CC |
1 | | ||||||
N/R(b) |
14 | 16 |
(a) |
For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moodys if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
(b) |
The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of April 30, 2020 and April 30, 2019, the market value of unrated securities deemed by the investment adviser to be investment grade each represents 3% and less than 1%, respectively, of the Trusts total investments. |
TRUST SUMMARY | 13 |
April 30, 2020 |
BlackRock Investment Quality Municipal Trust, Inc. (BKN) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Municipal Bonds 131.7% |
||||||||
Arizona 6.6% | ||||||||
Arizona Health Facilities Authority, Refunding RB, Phoenix Childrens Hospital, Series A, 5.00%, 02/01/42 |
$ | 3,300 | $ | 3,433,848 | ||||
Arizona IDA, Refunding RB, Odyssey Preparatory Academy Project, Series A, 5.50%, 07/01/52(a) |
215 | 190,208 | ||||||
Arizona Industrial Development Authority, Refunding RB, Series G, 5.00%, 07/01/47(a) |
430 | 374,100 | ||||||
County of Pinal Arizona Electric District No. 3, Refunding RB: |
||||||||
4.75%, 07/01/21(b) |
680 | 709,947 | ||||||
4.75%, 07/01/31 |
3,070 | 3,191,726 | ||||||
Salt Verde Financial Corp., RB, Senior: |
||||||||
5.00%, 12/01/32 |
1,095 | 1,332,166 | ||||||
5.00%, 12/01/37 |
4,885 | 6,028,041 | ||||||
University Medical Center Corp., Refunding RB, 6.00%, 07/01/21(b) |
1,600 | 1,695,824 | ||||||
|
|
|||||||
16,955,860 | ||||||||
Arkansas 2.6% | ||||||||
Arkansas Development Finance Authority, RB, Big River Steel Project, AMT, 4.50%, 09/01/49(a) |
1,550 | 1,323,622 | ||||||
City of Benton Arkansas, RB, 4.00%, 06/01/39 |
755 | 798,745 | ||||||
City of Fort Smith Arkansas Water & Sewer Revenue, Refunding RB, 4.00%, 10/01/40 |
1,250 | 1,343,850 | ||||||
City of Little Rock Arkansas, RB, 4.00%, 07/01/41 |
2,645 | 2,750,165 | ||||||
County of Pulaski Arkansas Public Facilities Board, RB, 5.00%, 12/01/42 |
465 | 493,142 | ||||||
|
|
|||||||
6,709,524 | ||||||||
California 17.8% | ||||||||
ABC Unified School District, GO, Series C, 0.00%, 08/01/33(d) |
3,420 | 2,310,791 | ||||||
California Infrastructure & Economic Development Bank, Refunding RB, Academy Motion Picture Arts and Sciences, Series A, 4.00%, 11/01/45 |
3,330 | 3,446,650 | ||||||
California Statewide Communities Development Authority, Refunding RB, John Muir Health, Series A, 4.00%, 12/01/53 |
725 | 741,182 | ||||||
Carlsbad California Unified School District, GO, Election of 2006, Series B, 6.00%, 05/01/34 |
1,500 | 1,785,945 | ||||||
City of San Jose California, Refunding ARB, Norman Y Mineta San Jose International Airport SJC, AMT: |
||||||||
Series A (BAM), 4.00%, 03/01/42 |
2,460 | 2,618,301 | ||||||
Series A-1, 5.75%, 03/01/34 |
3,000 | 3,086,550 | ||||||
Golden State Tobacco Securitization Corp., Refunding RB: |
||||||||
Series A-1, 3.50%, 06/01/36 |
1,110 | 1,084,559 | ||||||
Series A-2, 5.00%, 06/01/47 |
830 | 809,731 | ||||||
Hartnell Community College District California, GO, CAB, Election of 2002, Series D, 7.00%, 08/01/34(c) |
2,475 | 2,948,294 | ||||||
Norwalk-La Mirada Unified School District, GO, Refunding, CAB, Election of 2002, Series E (AGC), 0.00%, 08/01/38(d) |
12,000 | 6,423,720 | ||||||
Palomar Community College District, GO, CAB, Election of 2006, Series B: |
||||||||
0.00%, 08/01/30(d) |
2,270 | 1,861,037 | ||||||
0.00%, 08/01/33(d) |
4,250 | 1,816,450 | ||||||
0.00%, 08/01/39(c) |
4,000 | 4,582,800 | ||||||
San Diego Community College District, GO, CAB, Election of 2002, 6.00%, 08/01/33 |
4,200 | 5,356,512 | ||||||
State of California, GO, Refunding: |
||||||||
Various Purpose, 5.00%, 02/01/38 |
2,000 | 2,175,680 | ||||||
Various Purposes, 4.00%, 10/01/44 |
510 | 534,424 | ||||||
State of California, GO: |
||||||||
6.00%, 03/01/33 |
760 | 762,629 | ||||||
5.50%, 03/01/40 |
3,255 | 3,263,919 | ||||||
|
|
|||||||
45,609,174 |
Security |
Par
(000) |
Value | ||||||
Colorado 0.3% | ||||||||
Colorado Educational & Cultural Facilities Authority, Refunding RB, Rocky Mountain Classical Academy Project, 5.00%, 10/01/59(a) |
$ | 970 | $ | 854,279 | ||||
|
|
|||||||
Connecticut 0.6% | ||||||||
Connecticut Housing Finance Authority, Refunding RB, S/F Housing, Sub-Series E-1 (Ginnie Mae, Fannie Mae & Freddie Mac), 4.00%, 05/15/36 |
585 | 636,030 | ||||||
Connecticut State Health & Educational Facility Authority, Refunding RB, Lawrence & Memorial Hospital, Series F, 5.00%, 07/01/21(b) |
950 | 996,692 | ||||||
|
|
|||||||
1,632,722 | ||||||||
Delaware 0.7% | ||||||||
County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40 |
1,800 | 1,820,682 | ||||||
|
|
|||||||
District of Columbia 1.0% | ||||||||
Metropolitan Washington Airports Authority, Refunding ARB, Dulles Metrorail And Capital Improvement Projects, Series A, 5.00%, 10/01/53 |
2,505 | 2,572,334 | ||||||
|
|
|||||||
Florida 7.7% | ||||||||
Capital Trust Agency, Inc., RB, Renaissance Charter School, Inc., Series A, 5.00%, 06/15/49(a) |
100 | 82,159 | ||||||
County of Miami-Dade Florida, RB: |
||||||||
CAB, Subordinate Special Obligation, 0.00%, 10/01/32(d) |
5,000 | 3,491,250 | ||||||
CAB, Subordinate Special Obligation, 0.00%, 10/01/33(d) |
15,375 | 10,139,659 | ||||||
Series B, AMT, 6.00%, 10/01/32 |
3,000 | 3,341,010 | ||||||
County of Miami-Dade Florida, Refunding ARB, Series A, AMT, 5.00%, 10/01/38 |
365 | 395,207 | ||||||
County of Osceola Transportation Revenue, Refunding RB, Series A-2(d): |
||||||||
0.00%, 10/01/41 |
445 | 185,285 | ||||||
0.00%, 10/01/42 |
595 | 237,500 | ||||||
0.00%, 10/01/43 |
540 | 206,388 | ||||||
0.00%, 10/01/44 |
550 | 201,471 | ||||||
0.00%, 10/01/45 |
465 | 163,131 | ||||||
Greater Orlando Aviation Authority, RB, Priority Subordinated, Sub-Series A, AMT, 5.00%, 10/01/52 |
1,130 | 1,211,371 | ||||||
|
|
|||||||
19,654,431 | ||||||||
Georgia 0.6% | ||||||||
Main Street Natural Gas, Inc., RB, Series A, 5.00%, 05/15/43 |
525 | 561,808 | ||||||
Municipal Electric Authority of Georgia, RB, Plant Vogtle Units 3 & 4 Project: |
||||||||
4.00%, 01/01/49 |
415 | 399,284 | ||||||
5.00%, 01/01/56 |
565 | 595,956 | ||||||
|
|
|||||||
1,557,048 | ||||||||
Hawaii 1.4% | ||||||||
State of Hawaii Department of Budget & Finance, Refunding RB: |
||||||||
Hawaiian Electric Co., Inc. AMT, 4.00%, 03/01/37 |
2,770 | 2,860,745 | ||||||
Special Purpose, Senior Living, Kahala Nui, 5.25%, 11/15/37 |
600 | 624,078 | ||||||
|
|
|||||||
3,484,823 | ||||||||
Idaho 1.2% | ||||||||
Idaho Health Facilities Authority, RB, St. Lukes Health System Project, Series A, 5.00%, 03/01/39 |
3,000 | 3,159,510 | ||||||
|
|
|||||||
Illinois 6.9% | ||||||||
Chicago Board of Education, GO: |
||||||||
Dedicated Revenues, Series H, 5.00%, 12/01/36 |
375 | 361,478 | ||||||
Project, 5.25%, 12/01/35 |
1,235 | 1,223,354 |
14 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Investment Quality Municipal Trust, Inc. (BKN) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Illinois (continued) | ||||||||
Chicago Board of Education, GO, Refunding: |
||||||||
Dedicated Revenues, 5.00%, 12/01/34 |
$ | 370 | $ | 359,181 | ||||
Dedicated Revenues, Series F, 5.00%, 12/01/22 |
505 | 514,146 | ||||||
5.00%, 12/01/25 |
550 | 561,357 | ||||||
Chicago Board of Education, GO, Series C, Series D: |
||||||||
5.00%, 12/01/46 |
455 | 409,550 | ||||||
5.00%, 12/01/46 |
1,180 | 1,020,606 | ||||||
Refunding Dedicated Revenues, 5.00%, 12/01/26 |
675 | 685,935 | ||||||
City of Chicago Illinois, Refunding ARB, OHare International Airport Passenger Facility Charge, Series B, AMT, 4.00%, 01/01/29 |
2,400 | 2,422,320 | ||||||
City of Chicago Illinois Midway International Airport, Refunding GARB, 2nd Lien, Series A, AMT, 5.00%, 01/01/41 |
1,900 | 1,983,030 | ||||||
City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40 |
1,000 | 1,051,470 | ||||||
Illinois Finance Authority, Refunding RB, OSF Healthcare System, 6.00%, 05/15/39 |
155 | 155,147 | ||||||
Illinois Housing Development Authority, RB, S/F Housing, 4.13%, 10/01/38 |
1,040 | 1,134,744 | ||||||
Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project Bonds, Series A, 5.00%, 06/15/57 |
590 | 525,407 | ||||||
Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project, 4.00%, 06/15/50 |
455 | 378,883 | ||||||
Railsplitter Tobacco Settlement Authority, RB, 6.00%, 06/01/21(b) |
1,700 | 1,793,993 | ||||||
State of Illinois, GO: |
||||||||
5.00%, 02/01/39 |
1,000 | 887,730 | ||||||
Series A, 5.00%, 04/01/38 |
200 | 178,090 | ||||||
Series D, 5.00%, 11/01/28 |
1,585 | 1,543,742 | ||||||
Upper Illinois River Valley Development Authority, Refunding RB, Prairie Crossing Charter School, 5.00%, 01/01/55(a) |
610 | 514,297 | ||||||
|
|
|||||||
17,704,460 | ||||||||
Indiana 0.2% | ||||||||
County of Allen Indiana, RB, StoryPoint Fort Wayne Project, Series A-1(a): |
||||||||
6.63%, 01/15/34 |
300 | 296,574 | ||||||
6.75%, 01/15/43 |
245 | 234,534 | ||||||
|
|
|||||||
531,108 | ||||||||
Iowa 0.8% | ||||||||
Iowa Finance Authority, Refunding RB, Iowa Fertilizer Co. Project, Series B,
|
2,050 | 1,954,593 | ||||||
|
|
|||||||
Kansas 0.7% | ||||||||
City of Lenexa Kansas, Refunding RB, Lakeview Village, Inc., Series A, 5.00%, 05/15/39 |
640 | 594,304 | ||||||
County of Seward Kansas Unified School District No. 480 Liberal, GO, Refunding, 5.00%, 09/01/39 |
1,085 | 1,180,784 | ||||||
|
|
|||||||
1,775,088 | ||||||||
Kentucky 6.3% | ||||||||
County of Boyle Kentucky, Refunding RB, Centre College of Kentucky, 5.00%, 06/01/37 |
2,000 | 2,223,420 | ||||||
Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.38%, 01/01/23 (b) |
3,400 | 3,753,430 | ||||||
Kentucky Economic Development Finance Authority, Refunding RB, Norton Healthcare, Inc., Series B (NPFGC), 0.00%, 10/01/23(d) |
8,500 | 7,793,650 | ||||||
Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C(c): |
||||||||
6.45%, 07/01/34 |
1,000 | 947,160 | ||||||
6.60%, 07/01/39 |
1,395 | 1,303,153 | ||||||
|
|
|||||||
16,020,813 |
Security |
Par
(000) |
Value | ||||||
Louisiana 1.6% | ||||||||
City of Alexandria Louisiana Utilities, RB, 5.00%, 05/01/39 |
$ | 1,790 | $ | 1,998,195 | ||||
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35 |
1,565 | 1,584,672 | ||||||
Louisiana Public Facilities Authority, RB, Belle Chasse Educational Foundation Project, 6.50%, 05/01/21(b) |
600 | 633,654 | ||||||
|
|
|||||||
4,216,521 | ||||||||
Maine 0.4% | ||||||||
State of Maine Housing Authority, RB: |
||||||||
M/F Housing, Series E, 4.25%, 11/15/43 |
540 | 581,364 | ||||||
S/F Housing, Series C, 3.95%, 11/15/43 |
505 | 525,316 | ||||||
|
|
|||||||
1,106,680 | ||||||||
Maryland 0.5% | ||||||||
County of Anne Arundel Maryland Consolidated, RB, Special Taxing District, Villages at Two Rivers Project: |
||||||||
5.13%, 07/01/36 |
260 | 234,080 | ||||||
5.25%, 07/01/44 |
260 | 218,694 | ||||||
Maryland Community Development Administration, Refunding RB, S/F Housing, Series A, 4.10%, 09/01/38 |
875 | 931,604 | ||||||
|
|
|||||||
1,384,378 | ||||||||
Massachusetts 2.2% | ||||||||
Massachusetts Development Finance Agency, RB, Emerson College Issue, Series A: |
||||||||
5.25%, 01/01/42 |
900 | 973,998 | ||||||
5.00%, 01/01/47 |
1,010 | 1,053,066 | ||||||
Massachusetts Development Finance Agency, Refunding RB: |
||||||||
Atrius Health Issue, Series A, 4.00%, 06/01/49 |
235 | 235,670 | ||||||
International Charter School, 5.00%, 04/15/40 |
600 | 619,698 | ||||||
Suffolk University, 4.00%, 07/01/39 |
1,375 | 1,392,463 | ||||||
Massachusetts HFA, RB, M/F Housing, Series A, 3.85%, 06/01/46 |
35 | 36,204 | ||||||
Massachusetts HFA, Refunding RB, AMT, Series 182, 3.30%, 12/01/28 |
1,000 | 1,054,810 | ||||||
Massachusetts Housing Finance Agency, RB, M/F Housing, Series C-1, 2.90%, 12/01/39 |
365 | 354,871 | ||||||
|
|
|||||||
5,720,780 | ||||||||
Michigan 3.6% | ||||||||
Michigan Finance Authority, RB, Detroit Water & Sewage Disposal System, Senior Lien, Series 2014 C-2, AMT, 5.00%, 07/01/44 |
360 | 369,421 | ||||||
Michigan Finance Authority, Refunding RB, Henry Ford Health System, 4.00%, 11/15/46 |
900 | 864,783 | ||||||
Michigan State Housing Development Authority, RB, Series B, 2.95%, 12/01/39 |
375 | 373,024 | ||||||
Michigan Strategic Fund, RB, I-75 Improvement Project, AMT, 5.00%, 12/31/43 |
1,250 | 1,259,875 | ||||||
State of Michigan Hospital Finance Authority, Refunding RB, Trinity Health Credit Group, Series C, 4.00%, 12/01/32 |
4,150 | 4,282,592 | ||||||
State of Michigan Housing Development Authority, RB, S/F Housing: |
||||||||
Series A, 4.00%, 06/01/49 |
875 | 928,139 | ||||||
Series C, 4.13%, 12/01/38 |
1,110 | 1,192,529 | ||||||
|
|
|||||||
9,270,363 | ||||||||
Minnesota 1.9% | ||||||||
City of Otsego Minnesota, Refunding RB, Kaleidoscope Charter School Project, Series A, 5.00%, 09/01/44 |
700 | 595,035 | ||||||
City of Spring Lake Park Michigan, RB, Academy for Higher Learning Project, 5.00%, 06/15/39 |
1,760 | 1,554,678 | ||||||
Housing & Redevelopment Authority of The City of Saint Paul Minnesota, RB, Great River School Project, Series A, 5.50%, 07/01/52(a) |
305 | 261,806 |
SCHEDULES OF INVESTMENTS | 15 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Investment Quality Municipal Trust, Inc. (BKN) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Minnesota (continued) | ||||||||
Minneapolis-St. Paul Metropolitan Airports Commission, Refunding ARB, Sub Series D, AMT, 5.00%, 01/01/41 |
$ | 460 | $ | 503,222 | ||||
Minnesota Higher Education Facilities Authority, RB: |
||||||||
Augsburg College, Series B, 4.25%, 05/01/40 |
1,685 | 1,336,946 | ||||||
College of St. Benedict, Series 8-K, 4.00%, 03/01/43 |
615 | 578,998 | ||||||
|
|
|||||||
4,830,685 | ||||||||
Mississippi 0.6% | ||||||||
County of Warren Mississippi, RB, Gulf Opportunity Zone Bonds, International Paper Co. Project, Series A, 5.38%, 12/01/35 |
600 | 620,328 | ||||||
Mississippi Development Bank, RB, CAB, Special Obligation, Hinds Community College District (AGM), 5.00%, 04/01/21(b) |
910 | 944,261 | ||||||
|
|
|||||||
1,564,589 | ||||||||
Missouri 3.0% | ||||||||
Missouri Development Finance Board, RB, Annual Appropriation Sewer System, Series B, 5.00%, 11/01/41 |
1,350 | 1,408,009 | ||||||
Missouri State Health & Educational Facilities Authority, RB: |
||||||||
A.T. Still University of Health Sciences, 5.25%, 10/01/21(b) |
500 | 530,520 | ||||||
A.T. Still University of Health Sciences, 5.00%, 10/01/23(b) |
750 | 849,833 | ||||||
Heartland Regional Medical Center, 4.13%, 02/15/43 |
700 | 706,146 | ||||||
University of Central Missouri, Series C-2, 5.00%, 10/01/34 |
1,500 | 1,658,565 | ||||||
Missouri State Health & Educational Facilities Authority, Refunding RB, Kansas City University of Medicine and Biosciences, Series A: |
||||||||
5.00%, 06/01/42 |
860 | 993,584 | ||||||
5.00%, 06/01/47 |
1,230 | 1,409,297 | ||||||
|
|
|||||||
7,555,954 | ||||||||
Nebraska 1.9% | ||||||||
Central Plains Energy Project, RB, Gas Project No. 3, 5.00%, 09/01/42 |
900 | 952,353 | ||||||
County of Douglas Nebraska Hospital Authority No. 3, Refunding RB, Health Facilities Nebraska Methodist Health System, 5.00%, 11/01/45 |
600 | 640,224 | ||||||
Nebraska Public Power District, Refunding RB, Series A: |
||||||||
5.00%, 01/01/32 |
2,535 | 2,689,356 | ||||||
4.00%, 01/01/44 |
600 | 615,684 | ||||||
|
|
|||||||
4,897,617 | ||||||||
Nevada 0.7% | ||||||||
County of Clark Nevada, Refunding ARB, Department of Aviation, Subordinate Lien, Series A-2, 4.25%, 07/01/36 |
1,500 | 1,569,060 | ||||||
Nevada Department of Business & Industry, RB, Series A, 5.00%, 07/15/37(a) |
125 | 118,994 | ||||||
|
|
|||||||
1,688,054 | ||||||||
New Hampshire 0.3% | ||||||||
New Hampshire Business Finance Authority, Refunding RB, Resource Recovery, Covanta Project(a): |
||||||||
Series B, 4.63%, 11/01/42 |
505 | 452,728 | ||||||
Series C, AMT, 4.88%, 11/01/42 |
220 | 198,873 | ||||||
|
|
|||||||
651,601 | ||||||||
New Jersey 8.5% | ||||||||
County of Middlesex New Jersey Improvement Authority, RB, Heldrich Center Hotel, Sub-Series B,
|
1,510 | 21,518 | ||||||
New Jersey EDA, RB: |
||||||||
Continental Airlines, Inc. Project, Series B, AMT, 5.63%, 11/15/30 |
990 | 983,159 |
Security |
Par
(000) |
Value | ||||||
New Jersey (continued) | ||||||||
Goethals Bridge Replacement Project (AGM), AMT, 5.13%, 07/01/42 |
$ | 300 | $ | 316,305 | ||||
S/F Housing, State House Project, Series B, 4.50%, 06/15/40 |
1,930 | 1,744,295 | ||||||
School Facilities Construction Bonds, Series DDD, 5.00%, 06/15/42 |
160 | 155,491 | ||||||
New Jersey Health Care Facilities Financing Authority, Refunding RB, St. Barnabas Health Care System, Series A: |
||||||||
4.63%, 07/01/21(b) |
770 | 801,085 | ||||||
5.63%, 07/01/21(b) |
2,560 | 2,692,710 | ||||||
5.00%, 07/01/25 |
500 | 532,560 | ||||||
New Jersey Higher Education Student Assistance Authority, Refunding RB, Series B, AMT, 3.25%, 12/01/39 |
1,970 | 1,941,514 | ||||||
New Jersey State Turnpike Authority, RB, Series E, 5.00%, 01/01/45 |
820 | 890,340 | ||||||
New Jersey Transportation Trust Fund Authority, RB: |
||||||||
CAB, Transportation System, Series A, 0.00%, 12/15/35(d) |
1,600 | 801,392 | ||||||
Transportation System, Series A, 5.50%, 06/15/21(b) |
500 | 527,455 | ||||||
Transportation System, Series A, 5.00%, 06/15/42 |
395 | 383,869 | ||||||
Transportation System, Series B, 5.50%, 06/15/31 |
2,000 | 2,015,280 | ||||||
Transportation Program, Series AA, 5.00%, 06/15/38 |
290 | 284,368 | ||||||
Transportation Program, Series AA, 5.00%, 06/15/45 |
1,350 | 1,298,957 | ||||||
Transportation Program, Series AA, 5.00%, 06/15/46 |
600 | 574,542 | ||||||
New Jersey Transportation Trust Fund Authority, Refunding RB, Transportation System: |
||||||||
Bond, 4.00%, 12/15/39 |
820 | 723,724 | ||||||
Series A, 5.00%, 12/15/36 |
240 | 237,108 | ||||||
Tobacco Settlement Financing Corp., Refunding RB, Sub-Series B, 5.00%, 06/01/46 |
4,770 | 4,795,376 | ||||||
|
|
|||||||
21,721,048 | ||||||||
New Mexico 0.3% | ||||||||
New Mexico Hospital Equipment Loan Council, Refunding RB, Presbyterian Healthcare Services, 5.00%, 08/01/44 |
680 | 731,796 | ||||||
|
|
|||||||
New York 3.9% | ||||||||
City of New York Industrial Development Agency, RB, PILOT: |
||||||||
(AMBAC), 5.00%, 01/01/39 |
1,100 | 1,100,550 | ||||||
Queens Baseball Stadium (AGC), 6.50%, 01/01/46 |
300 | 301,014 | ||||||
Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A, 6.25%, 06/01/41(a) |
1,400 | 1,396,500 | ||||||
Counties of New York Tobacco Trust VI, Refunding RB, Settlement Pass-Through Turbo, Series C, 4.00%, 06/01/51 |
1,000 | 731,920 | ||||||
Erie Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, Series A, 5.00%, 06/01/45 |
1,825 | 1,668,214 | ||||||
Metropolitan Transportation Authority, RB, Series E, 5.00%, 11/15/43 |
30 | 30,495 | ||||||
Metropolitan Transportation Authority, Refunding RB, Series C-1, 5.00%, 11/15/56 |
320 | 327,130 | ||||||
New York Liberty Development Corp., Refunding RB, 3 World Trade Center Project, Class 2, 5.15%, 11/15/34(a) |
640 | 613,466 | ||||||
New York Transportation Development Corp., Refunding ARB, American Airlines, Inc., AMT, 5.00%, 08/01/31 |
820 | 796,490 | ||||||
Port Authority of New York & New Jersey, Refunding ARB, AMT: |
||||||||
Consolidated, 186th Series, 5.00%, 10/15/36 |
470 | 510,176 | ||||||
Consolidated,186th Series, 5.00%, 10/15/44 |
950 | 1,014,068 | ||||||
State of New York Power Authority, Refunding RB, Series A, 4.00%, 11/15/60(h) |
350 | 369,043 | ||||||
Westchester Tobacco Asset Securitization Corp., Refunding RB, Tobacco Settlement Bonds, Sub-Series C, 5.13%, 06/01/51 |
1,160 | 1,055,936 | ||||||
|
|
|||||||
9,915,002 |
16 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Investment Quality Municipal Trust, Inc. (BKN) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
North Carolina 0.4% | ||||||||
North Carolina Medical Care Commission, RB, Novant Health Obligated Group, 4.00%, 11/01/52 |
$ | 630 | $ | 655,610 | ||||
North Carolina Turnpike Authority, RB, Senior Lien, Triangle Express Way System: |
||||||||
4.00%, 01/01/55 |
155 | 138,737 | ||||||
(AGM), 4.00%, 01/01/55 |
110 | 112,329 | ||||||
|
|
|||||||
906,676 | ||||||||
North Dakota 0.3% | ||||||||
County of Burleigh North Dakota, Refunding RB, St. Alexius Medical Center Project, Series A, 5.00%, 07/01/21(b) |
720 | 752,875 | ||||||
|
|
|||||||
Ohio 4.5% | ||||||||
Buckeye Tobacco Settlement Financing Authority, Refunding RB, Senior, Class 2, Series B-2, 5.00%, 06/01/55 |
3,495 | 3,091,957 | ||||||
City of Dayton Ohio Airport Revenue, Refunding ARB, James M. Cox Dayton International Airport, Series A (AGM), AMT, 4.00%, 12/01/32 |
3,000 | 3,073,800 | ||||||
County of Butler Port Authority, RB, Series A-1(a): |
||||||||
Storypoint Fairfield Project, 6.25%, 01/15/34 |
500 | 473,930 | ||||||
StoryPoint Fairfield Project, 6.38%, 01/15/43 |
275 | 251,619 | ||||||
County of Montgomery Ohio, Refunding RB, Premier Health Partners Obligated Group, 4.00%, 11/15/42 |
1,050 | 881,349 | ||||||
Ohio Air Quality Development Authority, RB, AMG Vanadium Project, AMT, 5.00%, 07/01/49(a) |
650 | 590,551 | ||||||
Ohio Housing Finance Agency, RB, S/F Housing, Series A (Ginnie Mae, Fannie Mae & Freddie Mac), 4.00%, 09/01/48 |
50 | 51,774 | ||||||
State of Ohio, Refunding RB, University Hospitals Health System, Series A, 5.00%, 01/15/41 |
3,010 | 3,109,992 | ||||||
|
|
|||||||
11,524,972 | ||||||||
Oklahoma 0.9% | ||||||||
City of Oklahoma Public Property Authority, Refunding RB: |
||||||||
5.00%, 10/01/36 |
800 | 906,000 | ||||||
5.00%, 10/01/39 |
280 | 314,149 | ||||||
City of Oklahoma Turnpike Authority, RB, Series A, 4.00%, 01/01/48 |
420 | 454,264 | ||||||
Oklahoma Development Finance Authority, RB, OU Medicine Project, Series B, 5.50%, 08/15/52 |
680 | 715,611 | ||||||
|
|
|||||||
2,390,024 | ||||||||
Oregon 1.5% | ||||||||
Oregon Health & Science University, RB, Series A, 4.00%, 07/01/37 |
575 | 633,133 | ||||||
State of Oregon Housing & Community Services Department, RB, S/F Housing, Mortgage Program, Series C, 3.95%, 07/01/43 |
620 | 647,788 | ||||||
State of Oregon State Facilities Authority, Refunding RB, University of Portland Project, Series A, 5.00%, 04/01/45 |
2,485 | 2,644,313 | ||||||
|
|
|||||||
3,925,234 | ||||||||
Pennsylvania 9.9% | ||||||||
City of Philadelphia Pennsylvania Airport Revenue, Refunding ARB, Series B, AMT, 5.00%, 07/01/35 |
575 | 616,636 | ||||||
Commonwealth Financing Authority, RB, Tobacco Master Settlement Payment (AGM), 4.00%, 06/01/39 |
2,785 | 2,930,210 | ||||||
County of Montgomery Higher Education & Health Authority, Refunding RB, Thomas Jefferson University, Series A, 4.00%, 09/01/49 |
565 | 568,418 | ||||||
Delaware River Port Authority, RB, 4.50%, 01/01/32 |
3,000 | 3,276,420 | ||||||
Mckeesport Area School District, GO, CAB, Refunding (NPFGC), 0.00%, 10/01/31(d)(i) |
500 | 380,950 | ||||||
Pennsylvania Economic Development Financing Authority, RB: |
||||||||
Pennsylvania Rapid Bridge Replacement, 5.00%, 12/31/38 |
1,610 | 1,628,547 | ||||||
Series A-1, 4.00%, 04/15/50 |
780 | 790,585 |
Security |
Par
(000) |
Value | ||||||
Pennsylvania (continued) | ||||||||
Pennsylvania Economic Development Financing Authority, Refunding RB, National Gypsum Co., AMT, 5.50%, 11/01/44 |
$ | 810 | $ | 695,077 | ||||
Pennsylvania Higher Education Assistance Agency, RB, AMT, Series B, 3.00%, 06/01/47 |
155 | 129,667 | ||||||
Pennsylvania Housing Finance Agency, RB, S/F Housing: |
||||||||
Series 127-B, 3.88%, 10/01/38 |
670 | 709,764 | ||||||
Series 128B, 3.85%, 04/01/38 |
1,505 | 1,603,412 | ||||||
Pennsylvania Turnpike Commission, RB: |
||||||||
Series C, 5.00%, 12/01/39 |
850 | 914,897 | ||||||
Sub-Series A-1, 5.00%, 12/01/41 |
2,735 | 2,954,949 | ||||||
Subordinate, Series A, 4.00%, 12/01/49 |
710 | 727,054 | ||||||
Pottsville Hospital Authority, Refunding RB, Lehigh Valley Health Network, Series B, 5.00%, 07/01/45 |
2,000 | 2,155,360 | ||||||
School District of Philadelphia, Refunding, GOL, Series F, 5.00%, 09/01/37 |
800 | 910,232 | ||||||
State Public School Building Authority, Refunding RB, The School District of Philadelphia Project, Series A, 5.00%, 06/01/34 |
3,825 | 4,432,869 | ||||||
|
|
|||||||
25,425,047 | ||||||||
Puerto Rico 5.7% | ||||||||
Childrens Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds: |
||||||||
5.50%, 05/15/39 |
495 | 495,391 | ||||||
5.63%, 05/15/43 |
530 | 522,103 | ||||||
Commonwealth of Puerto Rico Aqueduct & Sewer Authority, RB, Senior Lien, Series A: |
||||||||
5.00%, 07/01/33 |
2,145 | 2,037,428 | ||||||
5.13%, 07/01/37 |
615 | 580,677 | ||||||
Commonwealth of Puerto Rico Aqueduct & Sewer Authority, Refunding RB, Senior Lien, Series A: |
||||||||
6.00%, 07/01/38 |
630 | 624,784 | ||||||
6.00%, 07/01/44 |
1,140 | 1,139,795 | ||||||
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB, Restructured: |
||||||||
CAB, Series A-1, 0.00%, 07/01/46(d) |
1,362 | 313,205 | ||||||
Series A-1, 4.75%, 07/01/53 |
1,372 | 1,235,939 | ||||||
Series A-1, 5.00%, 07/01/58 |
5,829 | 5,444,403 | ||||||
Series A-2, 4.33%, 07/01/40 |
861 | 768,959 | ||||||
Series A-2, 4.78%, 07/01/58 |
1,459 | 1,313,377 | ||||||
|
|
|||||||
14,476,061 | ||||||||
Rhode Island 3.1% | ||||||||
Rhode Island Health & Educational Building Corp., Refunding RB, Series A (AGM), 3.75%, 05/15/32 |
1,845 | 1,980,183 | ||||||
Tobacco Settlement Financing Corp., Refunding RB: |
||||||||
Series A, 5.00%, 06/01/40 |
1,000 | 1,031,620 | ||||||
Series B, 4.50%, 06/01/45 |
2,725 | 2,777,729 | ||||||
Series B, 5.00%, 06/01/50 |
2,000 | 2,090,120 | ||||||
|
|
|||||||
7,879,652 | ||||||||
South Carolina 1.9% | ||||||||
South Carolina Jobs EDA, Refunding RB, Prisma Health Obligated Group, Series A, 5.00%, 05/01/38 |
1,895 | 2,067,786 | ||||||
South Carolina Jobs-Economic Development Authority, RB, Hilton Head Christian Academy, 5.00%, 01/01/55(a) |
755 | 586,862 | ||||||
State of South Carolina Public Service Authority, RB, Series E, 5.00%, 12/01/48 |
2,125 | 2,195,125 | ||||||
|
|
|||||||
4,849,773 | ||||||||
Tennessee 3.2% | ||||||||
Chattanooga Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 01/01/23(b) |
2,945 | 3,262,883 | ||||||
City of Johnson Health & Educational Facilities Board, RB, Mountain States Health, Series A, 5.00%, 08/15/42 |
1,200 | 1,220,208 |
SCHEDULES OF INVESTMENTS | 17 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Investment Quality Municipal Trust, Inc. (BKN) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Tennessee (continued) | ||||||||
County of Chattanooga-Hamilton Tennessee Hospital Authority, Refunding RB, Series A, 5.00%, 10/01/44 |
$ | 875 | $ | 879,699 | ||||
County of Nashville & Davidson Metropolitan Government Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 07/01/40 |
1,075 | 1,164,332 | ||||||
Greeneville Health & Educational Facilities Board, Refunding RB, Ballad Health Obligation Group, Series A, 4.00%, 07/01/40 |
615 | 592,356 | ||||||
Metropolitan Government of Nashville & Davidson County Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 07/01/46 |
945 | 1,016,943 | ||||||
|
|
|||||||
8,136,421 | ||||||||
Texas 11.3% | ||||||||
Brazos Higher Education Authority, Inc., RB, Subordinate, Student Loan Program, Series 1B (AMT), 3.00%, 04/01/40 |
105 | 88,849 | ||||||
Central Texas Turnpike System, RB, Series C: |
||||||||
5.00%, 08/15/37 |
1,970 | 2,014,857 | ||||||
5.00%, 08/15/42 |
1,480 | 1,534,819 | ||||||
County of Harris Texas-Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series A (NPFGC) (AGM), 0.00%, 11/15/38(d) |
5,000 | 2,186,650 | ||||||
County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, 0.00%, 09/15/38(d) |
16,780 | 7,989,461 | ||||||
County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Christus Health, Series B, 5.00%, 07/01/35 |
440 | 502,181 | ||||||
Leander ISD, GO, Refunding CAB, Series D (PSF-GTD)(d): |
||||||||
0.00%, 08/15/24(b) |
550 | 311,262 | ||||||
0.00%, 08/15/35 |
5,450 | 2,996,355 | ||||||
North Texas Tollway Authority, Refunding RB, 4.25%, 01/01/49 |
930 | 1,005,683 | ||||||
Red River Texas Education Financing Corp., RB, Texas Christian University Project, 5.25%, 03/15/23(b) |
1,140 | 1,279,034 | ||||||
Texas Department of Housing & Community Affairs, RB, S/F Housing Mortgage, Series A (Ginnie Mae), 4.25%, 09/01/43 |
300 | 320,613 | ||||||
Texas Municipal Gas Acquisition & Supply Corp. III, RB, Natural Gas Utility Improvements, 5.00%, 12/15/32 |
2,080 | 2,154,110 | ||||||
Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, LBJ Infrastructure Group LLC, 7.00%, 06/30/40 |
3,000 | 3,007,260 | ||||||
Texas Transportation Commission, RB, First Tier Toll Revenue(d): |
||||||||
0.00%, 08/01/35 |
420 | 213,910 | ||||||
0.00%, 08/01/36 |
235 | 113,684 | ||||||
0.00%, 08/01/37 |
305 | 140,035 | ||||||
0.00%, 08/01/38 |
315 | 136,874 | ||||||
0.00%, 08/01/44 |
1,370 | 428,358 | ||||||
0.00%, 08/01/45 |
1,800 | 534,222 | ||||||
University of Texas System, Refunding RB, Series A, 3.50%, 08/15/50 |
1,545 | 1,922,135 | ||||||
|
|
|||||||
28,880,352 | ||||||||
Utah 0.6% | ||||||||
State of Utah Charter School Finance Authority, Refunding RB: |
||||||||
Mountainville Academy, 4.00%, 04/15/42 |
600 | 622,896 | ||||||
The Freedom Academy Foundation Project, 5.25%, 06/15/37(a) |
205 | 187,850 | ||||||
The Freedom Academy Foundation Project, 5.38%, 06/15/48(a) |
260 | 226,652 | ||||||
Utah Housing Corp., RB, S/F Housing, Class III, Series D-2 (FHA), 4.00%, 01/01/36 |
435 | 471,601 | ||||||
|
|
|||||||
1,508,999 |
18 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Investment Quality Municipal Trust, Inc. (BKN) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Maine 0.3% | ||||||||
State of Maine Housing Authority, RB, M/F Housing, Series E, 4.15%, 11/15/38 |
$ | 719 | $ | 774,917 | ||||
|
|
|||||||
Maryland 1.2% | ||||||||
State of Maryland Stadium Authority, RB, Construction and Revitalization Program, 5.00%, 05/01/42 |
2,760 | 3,204,222 | ||||||
|
|
|||||||
Massachusetts 1.4% | ||||||||
Commonwealth of Massachusetts, GO, Series A, 5.00%, 01/01/46 |
3,018 | 3,536,061 | ||||||
|
|
|||||||
Michigan 2.0% | ||||||||
Michigan Finance Authority, RB, Multi Model- McLaren Health Care, 4.00%, 02/15/47 |
2,759 | 2,851,944 | ||||||
State of Michigan Housing Development Authority, RB, M/F Housing, Series A, 4.05%, 10/01/48 |
2,142 | 2,267,091 | ||||||
|
|
|||||||
5,119,035 | ||||||||
Minnesota 2.2% | ||||||||
State of Minnesota, RB, Series A, 5.00%, 06/01/38 |
5,000 | 5,521,749 | ||||||
|
|
|||||||
Nebraska 0.7% | ||||||||
Nebraska Investment Finance Authority, RB, S/F Housing, Series A (Ginnie Mae, Fannie Mae & Freddie Mac), 3.70%, 03/01/47 |
1,665 | 1,745,190 | ||||||
|
|
|||||||
Nevada 1.1% | ||||||||
County of Clark Nevada, GOL, Stadium Improvement, Series A, 5.00%, 06/01/38 |
2,311 | 2,749,950 | ||||||
|
|
|||||||
New Jersey 1.8% | ||||||||
New Jersey State Turnpike Authority, Refunding RB, Series G, 4.00%, 01/01/43 |
1,606 | 1,698,932 | ||||||
New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 06/15/36 |
2,861 | 2,866,238 | ||||||
|
|
|||||||
4,565,170 | ||||||||
New York 9.9% | ||||||||
City of New York, GO, Refunding, Fiscal 2015, Series B, 4.00%, 08/01/32 |
1,600 | 1,707,408 | ||||||
City of New York Housing Development Corp., Refunding RB, Sustainable Neighborhood Bonds, Series A, 4.15%, 11/01/38 |
1,650 | 1,763,685 | ||||||
City of New York Transitional Finance Authority, BARB, Series S-1, 4.00%, 07/15/42(k) |
2,145 | 2,198,389 | ||||||
City of New York Water & Sewer System, Refunding RB, 2nd General Resolution, Fiscal 2013: |
||||||||
Series BB, 4.00%, 06/15/47 |
6,000 | 6,194,100 | ||||||
Series CC, 5.00%, 06/15/47 |
4,000 | 4,421,541 | ||||||
Hudson Yards Infrastructure Corp., RB, Senior-Fiscal 2012: |
||||||||
5.75%, 02/15/21(b)(k) |
1,083 | 1,121,569 | ||||||
5.75%, 02/15/47(k) |
666 | 689,955 | ||||||
New York Liberty Development Corp., ARB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43 |
4,500 | 4,718,793 | ||||||
State of New York Thruway Authority, Refunding RB, Transportation, Personal Income Tax, Series A, 5.00%, 03/15/31 |
2,360 | 2,467,663 | ||||||
|
|
|||||||
25,283,103 | ||||||||
Ohio 0.7% | ||||||||
Northeast Ohio Regional Sewer District, Refunding RB, 4.00%, 11/15/49(k) |
1,800 | 1,913,058 | ||||||
|
|
|||||||
Pennsylvania 1.4% | ||||||||
Commonwealth of Pennsylvania, GO, 1st Series, 4.00%, 03/01/36(k) |
2,399 | 2,647,891 |
(a) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(b) |
U.S. Government securities held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par. |
SCHEDULES OF INVESTMENTS | 19 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Investment Quality Municipal Trust, Inc. (BKN) |
(c) |
Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end. |
(d) |
Zero-coupon bond. |
(e) |
Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end. |
(f) |
Non-income producing security. |
(g) |
Issuer filed for bankruptcy and/or is in default. |
(h) |
When-issued security. |
(i) |
Security is collateralized by municipal bonds or U.S. Treasury obligations. |
(j) |
Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details. |
(k) |
All or a portion of the security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreements, which expire between August 15, 2020 to June 01, 2026, is $7,331,721. See Note 4 of the Notes to Financial Statements for details. |
(l) |
Annualized 7-day yield as of period end. |
(m) |
Investments in issuers considered to be an affiliate/affiliates of the Trust during the year ended April 30, 2020 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended were as follows: |
Affiliated Issuer |
Shares
Held at 04/30/19 |
Shares
Purchased |
Shares
Sold |
Shares
Held at 04/30/20 |
Value at
04/30/20 |
Income |
Net
Realized Gain (Loss) (a) |
Change in
Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||
BlackRock Liquidity Funds, MuniCash, Institutional Class |
903,538 | 3,099,560 | (b) | | 4,003,098 | $ | 4,003,899 | $ | 14,579 | $ | 3,034 | $ | 526 | |||||||||||||||||||
|
|
|
|
|
|
|
|
(a) |
Includes net capital gain distributions, if applicable. |
(b) |
Represents net shares purchased(sold). |
Derivative Financial Instruments Categorized by Risk Exposure
For the year ended April 30, 2020, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity
Contracts |
Credit
Contracts |
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate Contracts |
Other
Contracts |
Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | | $ | | $ | (4,804,290 | ) | $ | | $ | (4,804,290 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on: |
||||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | | $ | | $ | 165,984 | $ | | $ | 165,984 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts long |
$ | | (a) | |
Average notional value of contracts short |
16,068,395 |
(a) |
Derivative not held at any quarter-end. The risk exposure table serves as an indicator of activity during the period. |
For more information about the Trusts investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
20 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Investment Quality Municipal Trust, Inc. (BKN) |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments. For information about the Trusts policy regarding valuation of investments, refer to the Notes to Financial Statements.
The following tables summarize the Trusts investments categorized in the disclosure hierarchy:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: |
||||||||||||||||
Investments: |
||||||||||||||||
Long-Term Investments(a) |
$ | | $ | 429,713,541 | $ | | $ | 429,713,541 | ||||||||
Short-Term Securities |
4,003,899 | | | 4,003,899 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 4,003,899 | $ | 429,713,541 | $ | | $ | 433,717,440 | |||||||||
|
|
|
|
|
|
|
|
(a) |
See above Schedule of Investments for values in each state or political subdivision. |
The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: |
||||||||||||||||
TOB Trust Certificates |
$ | | $ | (56,112,087 | ) | $ | | $ | (56,112,087 | ) | ||||||
VMTP Shares at Liquidation Value |
| (125,900,000 | ) | | (125,900,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | | $ | (182,012,087 | ) | $ | | $ | (182,012,087 | ) | |||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
SCHEDULES OF INVESTMENTS | 21 |
Schedule of Investments April 30, 2020 |
BlackRock Long-Term Municipal Advantage Trust (BTA) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Municipal Bonds 130.5% |
||||||||
Alabama 1.9% | ||||||||
County of Jefferson Alabama Sewer, Refunding RB, Sub-Lien, Series D, 6.00%, 10/01/42 |
$ | 1,655 | $ | 1,865,086 | ||||
County of Tuscaloosa IDA, Refunding RB, Hunt Refining Project, Series A(a): |
||||||||
4.50%, 05/01/32 |
180 | 165,541 | ||||||
5.25%, 05/01/44 |
230 | 220,618 | ||||||
Madison Water & Wastewater Board, RB, 3.00%, 12/01/50 |
615 | 609,256 | ||||||
|
|
|||||||
2,860,501 | ||||||||
Alaska 0.7% | ||||||||
Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A, 5.00%, 06/01/46 |
1,045 | 1,023,640 | ||||||
|
|
|||||||
Arizona 3.7% | ||||||||
Arizona IDA, RB, Doral Academy of Nevada Fire Mesa & Red Rock Campus Projects, Series A, 5.00%, 07/15/39(a) |
250 | 230,305 | ||||||
Arizona IDA, Refunding RB, Series A(a): |
||||||||
Basis Schools, Inc. Projects, 5.13%, 07/01/37 |
360 | 337,392 | ||||||
Basis Schools, Inc. Projects, 5.38%, 07/01/50 |
925 | 842,934 | ||||||
Odyssey Preparatory Academy Project, 5.50%, 07/01/52 |
855 | 756,410 | ||||||
Arizona Industrial Development Authority, Refunding RB, Series G, 5.00%, 07/01/47(a) |
135 | 117,450 | ||||||
City of Phoenix Arizona IDA, RB, Series A: |
||||||||
Facility, Eagle College Preparatory Project, 5.00%, 07/01/33 |
870 | 809,056 | ||||||
Legacy Traditional Schools Projects, 5.00%, 07/01/46(a) |
1,255 | 1,145,237 | ||||||
City of Phoenix Arizona IDA, Refunding RB, Basis Schools, Inc. Projects,
Series A,
|
125 | 117,669 | ||||||
County of Maricopa IDA, Refunding RB, Honor health, Series A, 4.13%, 09/01/38 |
375 | 395,074 | ||||||
Salt Verde Financial Corp., RB, Senior, 5.00%, 12/01/37 |
725 | 894,643 | ||||||
|
|
|||||||
5,646,170 | ||||||||
Arkansas 0.5% | ||||||||
Arkansas Development Finance Authority, RB, Big River Steel Project, AMT, 4.50%, 09/01/49(a) |
925 | 789,904 | ||||||
|
|
|||||||
California 5.9% | ||||||||
California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F Housing, Series A: |
||||||||
5.25%, 08/15/39 |
70 | 75,603 | ||||||
5.25%, 08/15/49 |
175 | 185,451 | ||||||
City & County of San Francisco California Redevelopment Agency, Tax Allocation Bonds, Mission Bay South Redevelopment Project, Series D, 0.00%, 08/01/31(a)(b) |
1,265 | 708,640 | ||||||
City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior, Series A, 5.00%, 05/15/40 |
800 | 801,472 | ||||||
City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/23(c) |
165 | 194,916 | ||||||
County of California Tobacco Securitization Agency, Refunding RB, Golden Gate Tobacco Funding Corp., Series A, 5.00%, 06/01/47 |
140 | 134,420 | ||||||
County of Los Angeles California Tobacco Securitization Agency, RB, Asset-Backed, Los Angeles County Securitization Corp.(d): |
||||||||
5.70%, 06/01/46 |
1,000 | 999,990 | ||||||
5.60%, 06/01/36 |
2,000 | 1,999,980 | ||||||
Golden State Tobacco Securitization Corp., Refunding RB, Series A-2, 5.00%, 06/01/47 |
535 | 521,935 | ||||||
San Marcos Unified School District, GO, CAB, SAN, Election of 2010, Series B, 0.00%, 08/01/38(b) |
3,725 | 2,174,618 | ||||||
State of California, GO, Refunding, Various Purposes, 4.00%, 03/01/40 |
655 | 731,805 |
Security |
Par
(000) |
Value | ||||||
California (continued) | ||||||||
State of California Public Works Board, LRB, Various Capital Projects, Series I, 5.00%, 11/01/38 |
$ | 355 | $ | 386,414 | ||||
|
|
|||||||
8,915,244 | ||||||||
Colorado 1.8% | ||||||||
Centerra Metropolitan District No. 1, Tax Allocation Bonds, 5.00%, 12/01/47(a) |
275 | 229,119 | ||||||
Denver Convention Center Hotel Authority, Refunding RB, 5.00%, 12/01/40 |
1,550 | 1,549,969 | ||||||
Table Mountain Metropolitan District, GO, Series A, 5.25%, 12/01/45 |
991 | 925,901 | ||||||
|
|
|||||||
2,704,989 | ||||||||
Connecticut 0.6% | ||||||||
Mohegan Tribe of Indians of Connecticut, Refunding RB, Public Improvement, Priority Distribution, Series C, 6.25%, 02/01/30(a) |
860 | 889,231 | ||||||
|
|
|||||||
Delaware 2.3% | ||||||||
County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40 |
750 | 758,617 | ||||||
State of Delaware EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45 |
2,670 | 2,670,561 | ||||||
|
|
|||||||
3,429,178 | ||||||||
District of Columbia 1.3% | ||||||||
District of Columbia, Refunding RB, Kipp Charter School, Series A, 6.00%, 07/01/23(c) |
260 | 299,047 | ||||||
District of Columbia, Tax Allocation Bonds, City Market at O Street Project, 5.13%, 06/01/41 |
750 | 777,667 | ||||||
Metropolitan Washington Airports Authority Dulles Toll Road Revenue, Refunding RB, Subordinate, Dulles Metrorail and Capital Improvement Projects, 4.00%, 10/01/49 |
870 | 823,542 | ||||||
|
|
|||||||
1,900,256 | ||||||||
Florida 5.8% | ||||||||
Capital Region Community Development District, Refunding, Special Assessment, Capital Improvement: |
||||||||
Revenue Bond, Series A-1, 5.13%, 05/01/39 |
210 | 188,057 | ||||||
Series A-2, 4.60%, 05/01/31 |
515 | 474,181 | ||||||
Capital Trust Agency, Inc., RB, Paragon Academy of Technology and Sunshine, Series A, 5.75%, 06/01/54(a) |
450 | 372,991 | ||||||
County of Charlotte Florida IDA, RB, Town & Country Utilities Project, AMT(a): |
||||||||
5.00%, 10/01/34 |
120 | 114,550 | ||||||
5.00%, 10/01/49 |
560 | 483,286 | ||||||
County of Osceola Florida Transportation Revenue, Refunding RB, Series A-2(b): |
||||||||
0.00%, 10/01/46 |
775 | 260,276 | ||||||
0.00%, 10/01/47 |
745 | 239,666 | ||||||
0.00%, 10/01/48 |
525 | 161,653 | ||||||
0.00%, 10/01/49 |
435 | 128,086 | ||||||
Florida Development Finance Corp., RB, Solid Waste Disposal Facility, Waste Pro USA, Inc. Project, AMT, 5.00%, 08/01/29(a)(e) |
740 | 739,660 | ||||||
Lakewood Ranch Stewardship District, Special Assessment Bonds, Northeast Sector Project Phase 1B, Village of Lakewood Ranch Sector Projects: |
||||||||
5.30%, 05/01/39 |
310 | 323,401 | ||||||
4.75%, 05/01/29 |
270 | 266,863 | ||||||
5.45%, 05/01/48 |
550 | 572,797 | ||||||
Lakewood Ranch Stewardship District Special Assessment Bonds: |
||||||||
4.00%, 05/01/21 |
54 | 53,929 | ||||||
4.25%, 05/01/26 |
100 | 101,090 | ||||||
5.13%, 05/01/46 |
380 | 341,153 |
22 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Long-Term Municipal Advantage Trust (BTA) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Florida (continued) | ||||||||
Mid-Bay Florida Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21(c) |
$ | 1,080 | $ | 1,175,224 | ||||
Tolomato Community Development District, Refunding, Special Assessment Bonds(d): |
||||||||
Convertible CAB, Series A4, 0.00%, 05/01/40 |
120 | 98,567 | ||||||
Series 2015-2, 0.00%, 05/01/40 |
310 | 177,078 | ||||||
Tolomato Community Development District(f)(g): |
||||||||
Series 1, 0.00%, 05/01/40(d) |
505 | 378,063 | ||||||
Series 3, 6.61%, 05/01/40 |
340 | 3 | ||||||
Series 3, 6.65%, 05/01/40 |
275 | 3 | ||||||
Trout Creek Community Development District, Special Assessment Bonds: |
||||||||
5.50%, 05/01/49 |
570 | 577,792 | ||||||
5.00%, 05/01/28 |
160 | 165,168 | ||||||
Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 05/01/43 |
765 | 777,990 | ||||||
West Villages Improvement District, Special Assessment Bonds: |
||||||||
4.75%, 05/01/39 |
220 | 201,280 | ||||||
5.00%, 05/01/50 |
450 | 395,212 | ||||||
|
|
|||||||
8,768,019 | ||||||||
Georgia 2.9% | ||||||||
County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A (GTD), 5.50%, 08/15/54 |
240 | 262,318 | ||||||
Main Street Natural Gas, Inc., RB, Series A, 5.00%, 05/15/49 |
1,270 | 1,474,661 | ||||||
Municipal Electric Authority of Georgia, RB, Plant Vogtle Units 3 & 4 Project: |
||||||||
4.00%, 01/01/49 |
865 | 832,242 | ||||||
4.00%, 01/01/59 |
1,640 | 1,523,494 | ||||||
Municipal Electric Authority of Georgia, Refunding RB, Series A, 4.00%, 01/01/49 |
320 | 307,882 | ||||||
|
|
|||||||
4,400,597 | ||||||||
Illinois 10.5% | ||||||||
Chicago Board of Education, GO, Series D: |
||||||||
Dedicated Revenues, Series H, 5.00%, 12/01/36 |
935 | 901,284 | ||||||
Project, Series C, 5.25%, 12/01/35 |
795 | 787,503 | ||||||
Chicago Board of Education, GO, Refunding: |
||||||||
Dedicated Revenues, Series C, 5.00%, 12/01/27 |
415 | 420,150 | ||||||
Dedicated Revenues, Series C, 5.00%, 12/01/34 |
940 | 912,514 | ||||||
Dedicated Revenues, Series F, 5.00%, 12/01/22 |
325 | 330,886 | ||||||
Series C, 5.00%, 12/01/25 |
350 | 357,227 | ||||||
Chicago Board of Education, GO: |
||||||||
5.00%, 12/01/46 |
290 | 261,032 | ||||||
5.00%, 12/01/46 |
745 | 644,365 | ||||||
City of Chicago Illinois, GO, Refunding, Series A, 6.00%, 01/01/38 |
595 | 609,518 | ||||||
City of Chicago Illinois OHare International Airport, GARB, 3rd Lien, Series A, 5.75%, 01/01/39 |
400 | 408,132 | ||||||
City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40 |
360 | 378,529 | ||||||
County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38 |
350 | 354,704 | ||||||
Illinois Finance Authority, Refunding RB, Presence Health Network, Series C, 5.00%, 02/15/41 |
1,500 | 1,691,205 | ||||||
Metropolitan Pier & Exposition Authority, RB, Series A, McCormick Place Expansion Project: |
||||||||
Bonds, 5.00%, 06/15/57 |
555 | 494,239 | ||||||
5.50%, 06/15/53 |
200 | 194,454 | ||||||
Metropolitan Pier & Exposition Authority, Refunding RB: |
||||||||
McCormick Place Expansion Project, 4.00%, 06/15/50 |
570 | 474,645 | ||||||
McCormick Place Expansion Project, Series B (AGM), 5.00%, 06/15/50 |
1,790 | 1,794,296 |
Security |
Par
(000) |
Value | ||||||
Illinois (continued) | ||||||||
McCormick Place Expansion Project, Series B-2, 5.00%, 06/15/50 |
$ | 1,400 | $ | 1,400,042 | ||||
McCormik Place Expansion Project, Series B, 5.00%, 06/15/52 |
225 | 203,913 | ||||||
State of Illinois, GO: |
||||||||
5.00%, 05/01/27 |
500 | 491,785 | ||||||
5.00%, 01/01/28 |
1,005 | 984,910 | ||||||
5.00%, 03/01/37 |
755 | 675,378 | ||||||
Series A, 5.00%, 01/01/33 |
555 | 516,028 | ||||||
University of Illinois, RB, Auxiliary Facilities System, Series A, 5.00%, 04/01/44 |
475 | 491,872 | ||||||
|
|
|||||||
15,778,611 | ||||||||
Indiana 5.6% | ||||||||
City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT: |
||||||||
6.75%, 01/01/34 |
365 | 381,921 | ||||||
7.00%, 01/01/44 |
885 | 927,392 | ||||||
City of Vincennes Indiana, Refunding RB, Southwest Indiana Regional Youth Village Project, 6.25%, 01/01/29(a) |
960 | 960,653 | ||||||
County of Allen Indiana, RB, Story Point Fort Wayne Project, Series A-1(a): |
||||||||
6.63%, 01/15/34 |
135 | 133,458 | ||||||
6.75%, 01/15/43 |
200 | 191,456 | ||||||
6.88%, 01/15/52 |
560 | 529,810 | ||||||
Indiana Finance Authority, RB, Series A: |
||||||||
CWA Authority Project, 1st Lien, 5.25%, 10/01/38 |
1,285 | 1,352,861 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/44 |
160 | 163,749 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/48 |
520 | 533,728 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.25%, 01/01/51 |
2,190 | 2,243,699 | ||||||
Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 01/15/40 |
445 | 485,250 | ||||||
Town of Chesterton Indiana, RB, Story Point Chesterton Project, Series A-1, 6.38%, 01/15/51(a) |
560 | 497,017 | ||||||
|
|
|||||||
8,400,994 | ||||||||
Iowa 1.7% | ||||||||
Iowa Finance Authority, Refunding RB, Iowa Fertilizer Co. Project: |
||||||||
Series B, 5.25%, 12/01/50(e) |
825 | 786,605 | ||||||
Midwestern Disaster Area, 5.25%, 12/01/25 |
660 | 656,746 | ||||||
Iowa Student Loan Liquidity Corp., Refunding RB, AMT, Series B, 3.00%, 12/01/39 |
1,175 | 1,105,839 | ||||||
|
|
|||||||
2,549,190 | ||||||||
Kentucky 0.7% | ||||||||
Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 01/01/23(c) |
460 | 506,326 | ||||||
Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 07/01/43(d) |
565 | 527,925 | ||||||
|
|
|||||||
1,034,251 | ||||||||
Louisiana 2.7% | ||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, RB: |
||||||||
S/F Housing, University of Louisiana Monroe Project, 5.00%, 07/01/54(a) |
445 | 382,446 | ||||||
Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35 |
1,135 | 1,149,267 | ||||||
Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A: |
||||||||
5.50%, 05/15/30 |
350 | 350,490 |
SCHEDULES OF INVESTMENTS | 23 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Long-Term Municipal Advantage Trust (BTA) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Louisiana (continued) | ||||||||
5.25%, 05/15/31 |
$ | 300 | $ | 308,046 | ||||
5.25%, 05/15/32 |
380 | 399,145 | ||||||
5.25%, 05/15/33 |
415 | 435,667 | ||||||
5.25%, 05/15/35 |
945 | 1,001,917 | ||||||
|
|
|||||||
4,026,978 | ||||||||
Maine 0.7% | ||||||||
Maine Health & Higher Educational Facilities Authority, RB, Maine General Medical Center, 6.75%, 07/01/41 |
970 | 993,464 | ||||||
|
|
|||||||
Maryland 1.2% | ||||||||
Maryland EDC, Refunding RB, CNX Marine Terminal, Inc., 5.75%, 09/01/25 |
645 | 648,721 | ||||||
Maryland Health & Higher Educational Facilities Authority, RB, Legends Charter School Project, 7.00%, 03/01/55(a) |
1,480 | 1,155,377 | ||||||
|
|
|||||||
1,804,098 | ||||||||
Massachusetts 2.8% | ||||||||
Massachusetts Development Finance Agency, RB: |
||||||||
Emerson College Issue, Series A, 5.00%, 01/01/47 |
860 | 896,670 | ||||||
North Hill Communities Issue, Series A,
|
1,000 | 1,195,590 | ||||||
UMass Boston Student Housing Project, 5.00%, 10/01/48 |
945 | 941,929 | ||||||
Massachusetts Development Finance Agency, Refunding RB, Emmanuel College Issue, Series A, 5.00%, 10/01/35 |
500 | 548,050 | ||||||
Massachusetts HFA, Refunding RB, Series A, AMT, 4.45%, 12/01/42 |
625 | 645,038 | ||||||
|
|
|||||||
4,227,277 | ||||||||
Michigan 2.4% | ||||||||
City of Detroit Michigan, GO: |
||||||||
5.00%, 04/01/34 |
140 | 139,608 | ||||||
5.00%, 04/01/35 |
140 | 139,440 | ||||||
5.00%, 04/01/36 |
95 | 94,405 | ||||||
5.00%, 04/01/37 |
155 | 153,752 | ||||||
5.00%, 04/01/38 |
70 | 69,266 | ||||||
City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 07/01/39 |
1,970 | 2,091,884 | ||||||
Michigan Finance Authority, Refunding RB, Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 07/01/44 |
410 | 425,847 | ||||||
Michigan Strategic Fund, RB, I-75 Improvement Projects, AMT, 5.00%, 06/30/48 |
500 | 503,505 | ||||||
|
|
|||||||
3,617,707 | ||||||||
Minnesota 2.2% | ||||||||
Duluth Economic Development Authority, Refunding RB, Essentia Health Obligated Group, Series A: |
||||||||
4.25%, 02/15/48 |
1,940 | 1,970,710 | ||||||
5.25%, 02/15/58 |
655 | 712,968 | ||||||
Housing & Redevelopment Authority of The City of State Paul Minnesota, Refunding RB, Hmong College Academy Project, Series A, 5.50%, 09/01/36 |
690 | 684,521 | ||||||
|
|
|||||||
3,368,199 | ||||||||
Missouri 0.6% | ||||||||
Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44 |
85 | 91,520 | ||||||
City of St. Louis Missouri IDA, Refunding RB, BallPark Village Development Project, Series A: |
||||||||
4.38%, 11/15/35 |
330 | 310,467 | ||||||
4.75%, 11/15/47 |
365 | 330,289 | ||||||
State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 05/01/43 |
115 | 120,250 | ||||||
|
|
|||||||
852,526 |
Security |
Par
(000) |
Value | ||||||
Nebraska 0.2% | ||||||||
Central Plains Nebraska Energy Project, RB, Gas Project No. 3, 5.25%, 09/01/37 |
$ | 285 | $ | 303,400 | ||||
|
|
|||||||
New Jersey 10.6% | ||||||||
Casino Reinvestment Development Authority, Inc., Refunding RB: |
||||||||
5.25%, 11/01/39 |
475 | 457,093 | ||||||
5.25%, 11/01/44 |
1,160 | 1,078,359 | ||||||
County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 07/01/45(a) |
505 | 506,202 | ||||||
New Jersey EDA, ARB, Continental Airlines, Inc. Project, 5.13%, 09/15/23 |
1,410 | 1,401,822 | ||||||
New Jersey EDA, RB, School Facilities Construction, Series EEE, 5.00%, 06/15/43 |
195 | 189,170 | ||||||
New Jersey EDA, Refunding RB, Series BBB, 5.50%, 06/15/31 |
1,225 | 1,274,416 | ||||||
New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 04/01/31 |
785 | 765,304 | ||||||
New Jersey Higher Education Student Assistance Authority, Refunding RB, Sub-Series C, AMT, 3.63%, 12/01/49 |
645 | 586,163 | ||||||
New Jersey Transportation Trust Fund Authority, RB: |
||||||||
Transportation Program Bonds, Series S, 5.25%, 06/15/43 |
2,535 | 2,540,552 | ||||||
Transportation Program, Series AA, 5.00%, 06/15/45 |
585 | 562,881 | ||||||
Transportation System, Series B, 5.25%, 06/15/36 |
845 | 846,648 | ||||||
New Jersey Turnpike Authority, RB, Series A, 4.00%, 01/01/48 |
245 | 255,209 | ||||||
Tobacco Settlement Financing Corp., Refunding RB: |
||||||||
Series A, 5.00%, 06/01/35 |
730 | 815,658 | ||||||
Series A, 5.25%, 06/01/46 |
1,700 | 1,811,656 | ||||||
Sub-Series B, 5.00%, 06/01/46 |
2,825 | 2,840,029 | ||||||
|
|
|||||||
15,931,162 | ||||||||
New York 25.0% | ||||||||
City of New York, GO, Multi Modal, Series D-1, 4.00%, 03/01/44 |
615 | 660,264 | ||||||
City of New York Water & Sewer System, Refunding RB, 2nd General Resolution, Series HH, 5.00%, 06/15/31 |
2,830 | 2,943,398 | ||||||
Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A: |
||||||||
6.25%, 06/01/41(a) |
900 | 897,750 | ||||||
5.00%, 06/01/42 |
1,505 | 1,456,479 | ||||||
5.00%, 06/01/45 |
555 | 522,211 | ||||||
Counties of New York Tobacco Trust VI, Refunding RB, Tobacco Settlement Pass-Through, Series A-2B, 5.00%, 06/01/51 |
1,000 | 873,730 | ||||||
Erie Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, Series A, 5.00%, 06/01/45 |
910 | 831,822 | ||||||
Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012: |
||||||||
5.75%, 02/15/21(c) |
4,030 | 4,186,928 | ||||||
5.75%, 02/15/47 |
2,480 | 2,552,639 | ||||||
Metropolitan Transportation Authority, RB, Series B: |
||||||||
5.25%, 11/15/38 |
1,125 | 1,166,963 | ||||||
5.25%, 11/15/39 |
400 | 414,600 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, RB, Series B-1, 4.00%, 11/01/45 |
5,000 | 5,355,300 | ||||||
New York Liberty Development Corp., RB, World Trade Center Port Authority Consolidated, 5.25%, 12/15/43 |
6,140 | 6,438,711 | ||||||
New York Liberty Development Corp., Refunding RB: |
||||||||
3 World Trade Center Project, Class 1, 5.00%, 11/15/44(a) |
2,355 | 2,170,580 | ||||||
3 World Trade Center Project, Class 2, 5.15%, 11/15/34(a) |
160 | 153,366 | ||||||
3 World Trade Center Project, Class 2, 5.38%, 11/15/40(a) |
395 | 388,336 | ||||||
4 World Trade Center Project, 5.75%, 11/15/51 |
2,220 | 2,315,393 | ||||||
New York Transportation Development Corp., ARB, LaGuardia Airport Terminal B Redevelopment Project, Series A, AMT, 5.25%, 01/01/50 |
1,000 | 1,019,500 |
24 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Long-Term Municipal Advantage Trust (BTA) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
New York (continued) | ||||||||
Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8, 6.00%, 12/01/42 |
$ | 730 | $ | 734,424 | ||||
State of New York Dormitory Authority, Refunding RB, Orange Regional Medical Center, 5.00%, 12/01/33(a) |
410 | 441,160 | ||||||
State of New York Power Authority, Refunding RB, Series A, 4.00%, 11/15/60(h) |
565 | 595,742 | ||||||
Westchester Tobacco Asset Securitization Corp., Refunding RB, Tobacco Settlement Bonds, Sub-Series C, 4.00%, 06/01/42 |
1,690 | 1,430,585 | ||||||
|
|
|||||||
37,549,881 | ||||||||
North Carolina 0.4% | ||||||||
North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 03/01/21(c) |
260 | 274,745 | ||||||
North Carolina Turnpike Authority, RB, Senior Lien, Triangle Express Way System (AGM), 4.00%, 01/01/55 |
320 | 326,774 | ||||||
|
|
|||||||
601,519 | ||||||||
Ohio 4.7% | ||||||||
Buckeye Tobacco Settlement Financing Authority, Refunding RB, Senior, Class 2, Series B-2, 5.00%, 06/01/55 |
6,070 | 5,370,008 | ||||||
Ohio Air Quality Development Authority, RB, AMG Vanadium Project, AMT, 5.00%, 07/01/49(a) |
400 | 363,416 | ||||||
State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 06/30/53 |
1,220 | 1,338,523 | ||||||
|
|
|||||||
7,071,947 | ||||||||
Oklahoma 2.5% | ||||||||
Oklahoma Development Finance Authority, RB, OU Medicine Project, Series B: |
||||||||
5.00%, 08/15/38 |
1,450 | 1,474,621 | ||||||
5.25%, 08/15/43 |
1,305 | 1,342,493 | ||||||
Tulsa County Industrial Authority, Refunding RB, Montereau, Inc. Project, 5.25%, 11/15/45 |
925 | 886,113 | ||||||
|
|
|||||||
3,703,227 | ||||||||
Oregon 0.2% | ||||||||
County of Clackamas Oregon School District No. 12 North Clackamas, GO, CAB, Series A, 0.00%, 06/15/38(b) |
625 | 316,050 | ||||||
|
|
|||||||
Pennsylvania 2.2% | ||||||||
Allentown Neighborhood Improvement Zone Development Authority, RB, City Center Project, 5.00%, 05/01/42(a) |
470 | 451,811 | ||||||
City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 07/01/42 |
300 | 310,479 | ||||||
Pennsylvania Economic Development Financing Authority, RB, Pennsylvania Rapid Bridge Replacement, 5.00%, 12/31/38 |
465 | 470,357 | ||||||
Pennsylvania Economic Development Financing Authority, Refunding RB, National Gypsum Co., AMT, 5.50%, 11/01/44 |
720 | 617,846 | ||||||
Pennsylvania Higher Educational Facilities Authority, RB, University of Pennsylvania Health System Obligation, 4.00%, 08/15/44 |
805 | 850,982 | ||||||
Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44 |
520 | 559,785 | ||||||
|
|
|||||||
3,261,260 | ||||||||
Puerto Rico 6.2% | ||||||||
Childrens Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds, 5.63%, 05/15/43 |
820 | 807,782 | ||||||
Commonwealth of Puerto Rico Aqueduct & Sewer Authority, RB, Senior Lien, Series A, 5.25%, 07/01/42 |
2,125 | 1,997,458 | ||||||
Commonwealth of Puerto Rico Aqueduct & Sewer Authority, Refunding RB, Senior Lien, Series A: |
||||||||
6.00%, 07/01/38 |
395 | 391,729 |
Security |
Par
(000) |
Value | ||||||
Puerto Rico (continued) | ||||||||
6.00%, 07/01/44 |
$ | 715 | $ | 714,871 | ||||
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB, Restructured: |
||||||||
Series A-1, 4.75%, 07/01/53 |
1,374 | 1,237,741 | ||||||
Series A-1, 5.00%, 07/01/58 |
2,589 | 2,418,178 | ||||||
Series A-2, 4.33%, 07/01/40 |
851 | 760,028 | ||||||
Series A-2, 4.78%, 07/01/58 |
1,038 | 934,397 | ||||||
Series A-2, 4.33%, 07/01/40 |
72 | 64,055 | ||||||
|
|
|||||||
9,326,239 | ||||||||
Rhode Island 2.5% | ||||||||
Tobacco Settlement Financing Corp., Refunding RB: |
||||||||
Series A, 5.00%, 06/01/40 |
420 | 433,280 | ||||||
Series B, 4.50%, 06/01/45 |
1,875 | 1,911,281 | ||||||
Series B, 5.00%, 06/01/50 |
1,360 | 1,421,282 | ||||||
|
|
|||||||
3,765,843 | ||||||||
South Carolina 3.3% | ||||||||
South Carolina Jobs-Economic Development Authority, RB, The Woodlands at Furman Project, Series A, 5.00%, 11/15/54 |
165 | 137,932 | ||||||
State of South Carolina Jobs EDA, Refunding RB, Prisma Health Obligated Group, Series A, 5.00%, 05/01/43 |
1,110 | 1,199,233 | ||||||
State of South Carolina Public Service Authority, RB: |
||||||||
Santee Cooper, Series A, 5.50%, 12/01/54 |
1,840 | 1,942,009 | ||||||
Series E, 5.00%, 12/01/48 |
420 | 433,860 | ||||||
Series E, 5.50%, 12/01/53 |
750 | 788,295 | ||||||
State of South Carolina Public Service Authority, Refunding RB, Series E, 5.25%, 12/01/55 |
430 | 455,284 | ||||||
|
|
|||||||
4,956,613 | ||||||||
Tennessee 1.8% | ||||||||
County of Memphis-Shelby Tennessee Industrial Development Board, Refunding, Tax Allocation Bonds, Senior Tax Increment, Graceland Project, Series A: |
||||||||
5.50%, 07/01/37 |
490 | 455,940 | ||||||
5.63%, 01/01/46 |
570 | 515,018 | ||||||
County of Nashville & Davidson Metropolitan Government Health & Educational Facilities Board, Refunding RB, Lipscomb University Project, Series A: |
||||||||
4.00%, 10/01/49 |
290 | 270,448 | ||||||
5.25%, 10/01/58 |
1,430 | 1,524,423 | ||||||
|
|
|||||||
2,765,829 | ||||||||
Texas 7.3% | ||||||||
Brazos Higher Education Authority, Inc., RB, Subordinate, Student Loan Program, Series 1B (AMT), 3.00%, 04/01/40 |
285 | 241,161 | ||||||
Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.25%, 01/01/21(c) |
730 | 756,543 | ||||||
County of Brazoria Industrial Development Corp., RB, Gladieux Metals Recycling, AMT, 7.00%, 03/01/39 |
325 | 322,511 | ||||||
County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 01/01/23(c) |
210 | 243,260 | ||||||
County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Projects,
Series A,
|
5,200 | 2,612,428 | ||||||
Harris County-Houston Sports Authority, Refunding RB, CAB, Series A (AGM) (NPFGC), 0.00%, 11/15/34(b) |
3,000 | 1,732,800 | ||||||
Mission EDC, Refunding RB, Senior Lien, NatGasoline Project, AMT, 4.63%, 10/01/31(a) |
430 | 422,565 | ||||||
Newark Higher Education Finance Corp.,
RB,
|
||||||||
5.50%, 08/15/35 |
135 | 143,690 | ||||||
5.75%, 08/15/45 |
275 | 290,032 | ||||||
North Texas Tollway Authority, Refunding RB, 4.25%, 01/01/49 |
1,890 | 2,043,808 |
SCHEDULES OF INVESTMENTS | 25 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Long-Term Municipal Advantage Trust (BTA) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Florida 1.5% | ||||||||
Escambia County Health Facilities Authority, Refunding RB, Health Care Facilities Revenue Bonds, 4.00%, 08/15/45(j) |
$ | 2,321 | $ | 2,270,889 | ||||
|
|
|||||||
Georgia 0.7% | ||||||||
County of Dalton Whitfield Joint Development Authority, RB, Hamilton Health Care System Obligation, 4.00%, 08/15/48 |
1,025 | 1,057,154 | ||||||
|
|
|||||||
Idaho 1.5% | ||||||||
Idaho State Building Authority, RB, State Office Campus Project, Series A, 4.00%, 09/01/48 |
2,120 | 2,309,125 | ||||||
|
|
|||||||
Illinois 2.7% | ||||||||
Illinois Finance Authority, RB, The Carle Foundation, Series A (AGM), 6.00%, 08/15/41 |
2,340 | 2,462,031 | ||||||
State of Illinois Toll Highway Authority, RB, Series C, 5.00%, 01/01/38 |
1,498 | 1,637,072 | ||||||
|
|
|||||||
4,099,103 | ||||||||
Iowa 1.2% | ||||||||
Iowa Finance Authority, Refunding RB, UnityPoint Health, Series E, 4.00%, 08/15/46 |
1,815 | 1,857,235 | ||||||
|
|
|||||||
Massachusetts 6.5% | ||||||||
Massachusetts Housing Finance Agency, Refunding RB, Series A, AMT, 4.50%, 12/01/47 |
2,058 | 2,163,737 | ||||||
Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/21(c) |
7,112 | 7,548,846 | ||||||
|
|
|||||||
9,712,583 | ||||||||
Michigan 1.4% | ||||||||
Michigan Finance Authority, RB, Multi Model- McLaren Health Care, 4.00%, 02/15/47 |
2,000 | 2,067,659 | ||||||
|
|
|||||||
New York 2.6% | ||||||||
City of New York Housing Development Corp., Refunding RB, Sustainable Neighborhood Bonds, Series A, 4.15%, 11/01/38 |
2,390 | 2,554,671 | ||||||
Port Authority of New York & New Jersey, Refunding ARB, Series 194th, 5.25%, 10/15/55 |
1,215 | 1,339,100 | ||||||
|
|
|||||||
3,893,771 | ||||||||
North Carolina 1.7% | ||||||||
North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project, Series B, 5.00%, 10/01/55 |
1,180 | 1,345,802 | ||||||
North Carolina Housing Finance Agency, RB, S/F Housing, Series 39-B (Ginnie Mae, Fannie Mae & Freddie Mac), 4.00%, 01/01/48 |
1,163 | 1,241,175 | ||||||
|
|
|||||||
2,586,977 | ||||||||
Pennsylvania 3.0% | ||||||||
County of Lehigh Pennsylvania, Refunding RB, Lehigh Valley Health Network, 4.00%, 07/01/49(j) |
2,501 | 2,528,291 | ||||||
Pennsylvania Turnpike Commission, RB, Sub-Series A, 5.50%, 12/01/42 |
1,680 | 1,888,942 | ||||||
|
|
|||||||
4,417,233 | ||||||||
Rhode Island 1.8% | ||||||||
Rhode Island Health & Educational Building Corp., RB, Series A, 4.00%, 09/15/47 |
2,447 | 2,679,662 | ||||||
|
|
|||||||
Texas 8.8% | ||||||||
City of San Antonio Texas Electric & Gas Systems Revenue, RB, Junior Lien, 5.00%, 02/01/43 |
11,000 | 11,967,230 | ||||||
County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/21(c) |
1,170 | 1,243,160 | ||||||
|
|
|||||||
13,210,390 | ||||||||
Virginia 3.7% | ||||||||
Hampton Roads Transportation Accountability Commission, RB, Transportation Fund, Senior Lien,
Series A,
|
2,224 | 2,669,578 |
26 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Long-Term Municipal Advantage Trust (BTA) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Virginia (continued) | ||||||||
Virginia Small Business Financing Authority, Refunding RB, Sentara Healthcare, 8.29%, 11/01/40 |
$ | 2,949 | $ | 2,949,371 | ||||
|
|
|||||||
5,618,949 | ||||||||
West Virginia 1.3% | ||||||||
Morgantown Utility Board, Inc., RB, Series B, 4.00%, 12/01/48(j) |
1,891 | 1,998,689 | ||||||
|
|
|||||||
Total Municipal Bonds Transferred to Tender Option Bond
|
|
63,012,034 | ||||||
|
|
|||||||
Total Long-Term Investments
172.4%
|
|
259,167,606 | ||||||
|
|
|||||||
Shares | ||||||||
Short-Term Securities 0.4% | ||||||||
BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.15%(k)(l) |
676,970 | 677,105 | ||||||
|
|
|||||||
Total Short-Term Securities
0.4%
|
|
677,105 | ||||||
|
|
|||||||
Total Investments 172.8%
|
|
259,844,711 | ||||||
Other Assets Less Liabilities 2.1% |
|
3,162,446 | ||||||
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable (24.6)% |
|
(37,051,196 | ) | |||||
VRDP Shares, at Liquidation Value, Net of Deferred Offering Costs (50.3)% |
|
(75,612,012 | ) | |||||
|
|
|||||||
Net Assets Applicable to Common Shares 100.0% |
|
$ | 150,343,949 | |||||
|
|
(a) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(b) |
Zero-coupon bond. |
(c) |
U.S. Government securities held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par. |
(d) |
Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end. |
(e) |
Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end. |
(f) |
Issuer filed for bankruptcy and/or is in default. |
(g) |
Non-income producing security. |
(h) |
When-issued security. |
(i) |
Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details. |
(j) |
All or a portion of the security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreements, which expire between January 1, 2026 to February 15, 2028, is $6,412,176. See Note 4 of the Notes to Financial Statements for details. |
(k) |
Annualized 7-day yield as of period end. |
(l) |
Investments in issuers considered to be an affiliate/affiliates of the during the year ended April 30, 2020 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
Affiliated Issuer |
Shares
Held at 04/30/19 |
Shares
Purchased |
Shares
Sold |
Shares
Held at 04/30/20 |
Value at
04/30/20 |
Income |
Net
Realized Gain (Loss) (a) |
Change in
Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||
BlackRock Liquidity Funds, MuniCash, Institutional Class |
393,555 | 283,415 | (b) | | 676,970 | $ | 677,105 | $ | 9,324 | $ | 774 | $ | 7 | |||||||||||||||||||
|
|
|
|
|
|
|
|
(a) |
Includes net capital gain distributions, if applicable. |
(b) |
Represents net shares purchased(sold). |
Derivative Financial Instruments Categorized by Risk Exposure
For the year ended April 30, 2020, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity
Contracts |
Credit
Contracts |
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate Contracts |
Other
Contracts |
Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | | $ | | $ | (3,083,691 | ) | $ | | $ | (3,083,691 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on: |
||||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | | $ | | $ | 60,522 | $ | | $ | 60,522 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULES OF INVESTMENTS | 27 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Long-Term Municipal Advantage Trust (BTA) |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts Long |
$ | | (a) | |
Average notional value of contracts Short |
$ | 9,306,465 |
(a) |
Derivative not held at any quarter-end. The risk exposure table serves as an indicator of activity during the period. |
For more information about the Trusts investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments. For information about the Trusts policy regarding valuation of investments, refer to the Notes to Financial Statements.
The following tables summarize the Trusts investments categorized in the disclosure hierarchy:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: |
||||||||||||||||
Investments: |
|
|||||||||||||||
Long-Term Investments(a) |
$ | | $ | 259,167,606 | $ | | $ | 259,167,606 | ||||||||
Short-Term Securities |
677,105 | | | 677,105 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 677,105 | $ | 259,167,606 | $ | | $ | 259,844,711 | |||||||||
|
|
|
|
|
|
|
|
(a) |
See above Schedule of Investments for values in each state or political subdivision. |
The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: |
||||||||||||||||
TOB Trust Certificates |
$ | | $ | (36,907,873 | ) | $ | | $ | (36,907,873 | ) | ||||||
VRDP Shares at Liquidation Value |
| (76,000,000 | ) | | (76,000,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | | $ | (112,907,873 | ) | $ | | $ | (112,907,873 | ) | |||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
28 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments April 30, 2020 |
BlackRock Municipal Income Trust (BFK) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Municipal Bonds 127.5% |
||||||||
Alabama 2.7% | ||||||||
County of Jefferson Alabama Sewer, Refunding RB: |
||||||||
Senior Lien, Series A (AGM), 5.00%, 10/01/44 |
$ | 1,555 | $ | 1,702,865 | ||||
Senior Lien, Series A (AGM), 5.25%, 10/01/48 |
2,275 | 2,511,372 | ||||||
Sub-Lien, Series D, 6.00%, 10/01/42 |
5,740 | 6,468,636 | ||||||
Sub-Lien, Series D, 7.00%, 10/01/51 |
1,765 | 2,045,635 | ||||||
Lower Alabama Gas District, RB, Series A, 5.00%, 09/01/46 |
2,110 | 2,638,260 | ||||||
|
|
|||||||
15,366,768 | ||||||||
Arizona 4.7% | ||||||||
City of Phoenix Arizona IDA, RB, Legacy Traditional Schools Projects, Series A, 5.00%, 07/01/46(a) |
3,400 | 3,102,636 | ||||||
City of Phoenix Civic Improvement Corp., ARB, Series A, 4.00%, 07/01/45 |
2,610 | 2,610,966 | ||||||
Salt Verde Financial Corp., RB, Senior: |
||||||||
5.00%, 12/01/32 |
10,030 | 12,202,398 | ||||||
5.00%, 12/01/37 |
7,460 | 9,205,565 | ||||||
|
|
|||||||
27,121,565 | ||||||||
Arkansas 0.7% | ||||||||
Arkansas Development Finance Authority, RB, Big River Steel Project, AMT, 4.50%, 09/01/49(a) |
4,985 | 4,256,941 | ||||||
|
|
|||||||
California 7.5% | ||||||||
California Educational Facilities Authority, RB, Stanford University, Series V-1, 5.00%, 05/01/49 |
4,230 | 6,667,664 | ||||||
California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 08/15/20(b) |
3,115 | 3,160,915 | ||||||
California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 07/01/33 |
2,465 | 2,687,170 | ||||||
California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F Housing, Series A: |
||||||||
5.25%, 08/15/39 |
290 | 313,212 | ||||||
5.25%, 08/15/49 |
715 | 757,700 | ||||||
California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45(a) |
2,970 | 3,003,709 | ||||||
California Statewide Communities Development Authority, RB, Loma Linda University Medical Center, Series A(a): |
||||||||
5.00%, 12/01/41 |
1,030 | 1,024,181 | ||||||
5.00%, 12/01/46 |
885 | 865,857 | ||||||
City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior, Series A, 5.00%, 05/15/40 |
4,575 | 4,583,418 | ||||||
City of Stockton California Public Financing Authority, RB, Delta Water Supply Project,
Series A,
|
690 | 814,994 | ||||||
County of Riverside Transportation Commission, RB, CAB, Senior Lien, Series B(c): |
||||||||
0.00%, 06/01/41 |
5,000 | 1,950,850 | ||||||
0.00%, 06/01/42 |
6,000 | 2,212,380 | ||||||
0.00%, 06/01/43 |
5,000 | 1,736,900 | ||||||
Golden State Tobacco Securitization Corp., Refunding RB: |
||||||||
Series A-1, 5.25%, 06/01/47 |
1,070 | 1,071,402 | ||||||
Series A-2, 5.00%, 06/01/47 |
4,335 | 4,229,139 | ||||||
San Marcos Unified School District, GO, CAB, Election of 2010, Series B(c): |
||||||||
0.00%, 08/01/34 |
3,500 | 2,390,535 | ||||||
0.00%, 08/01/36 |
4,000 | 2,518,200 | ||||||
State of California, GO, Various Purposes, 6.00%, 03/01/33 |
1,670 | 1,675,778 | ||||||
State of California Public Works Board, LRB, Various Capital Projects, Series I, 5.00%, 11/01/38 |
1,495 | 1,627,293 | ||||||
|
|
|||||||
43,291,297 |
Security |
Par
(000) |
Value | ||||||
Colorado 1.8% | ||||||||
Arapahoe County School District No. 6 Littleton, GO, Series A, 5.50%, 12/01/43 |
$ | 3,485 | $ | 4,314,465 | ||||
Colorado Health Facilities Authority, Refunding RB, Commonspirit Health, Series A, 4.00%, 08/01/44 |
3,565 | 3,463,362 | ||||||
State of Colorado, COP, Building Excellent Schools, Series O, 4.00%, 03/15/44 |
2,580 | 2,838,051 | ||||||
|
|
|||||||
10,615,878 | ||||||||
Connecticut 1.1% | ||||||||
State of Connecticut, GO, Series A, 4.00%, 01/15/38 |
6,300 | 6,568,443 | ||||||
|
|
|||||||
Delaware 2.6% | ||||||||
County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40 |
2,225 | 2,250,565 | ||||||
Delaware Transportation Authority, RB, U.S. 301 Project, 5.00%, 06/01/55 |
2,280 | 2,539,327 | ||||||
State of Delaware EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45 |
10,080 | 10,082,117 | ||||||
|
|
|||||||
14,872,009 | ||||||||
District of Columbia 6.4% | ||||||||
District of Columbia, Refunding RB: |
||||||||
Georgetown University, 5.00%, 04/01/35 |
865 | 958,965 | ||||||
Kipp Charter School, Series A, 6.00%, 07/01/23(b) |
1,480 | 1,702,267 | ||||||
The Catholic University of America Issue, 5.00%, 10/01/48 |
4,590 | 5,116,932 | ||||||
District of Columbia Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, 6.75%, 05/15/40 |
23,035 | 23,428,668 | ||||||
Metropolitan Washington Airports Authority, Refunding ARB, Dulles Metrorail And Capital Improvement Projects, Series A, 5.00%, 10/01/53 |
3,990 | 4,097,251 | ||||||
Metropolitan Washington Airports Authority Dulles Toll Road Revenue, Refunding RB, Subordinate, Dulles Metrorail And Capital Improvement Projects, Series B, 4.00%, 10/01/53 |
1,550 | 1,480,157 | ||||||
|
|
|||||||
36,784,240 | ||||||||
Florida 3.0% | ||||||||
County of Collier Florida Health Facilities Authority, Refunding RB, Series A, 5.00%, 05/01/45 |
2,620 | 2,881,948 | ||||||
County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A-1,
|
2,280 | 2,321,701 | ||||||
County of Volusia Educational Facility Authority, Refunding RB, Embry Riddle Aeronautical Project: |
||||||||
5.00%, 10/15/44 |
1,160 | 1,296,683 | ||||||
5.00%, 10/15/49 |
2,375 | 2,656,438 | ||||||
Mid-Bay Florida Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21(b) |
5,885 | 6,403,880 | ||||||
Stevens Plantation Community Development District, RB, Special Assessment, Series A, 7.10%, 05/01/35(d)(e)(f) |
3,395 | 1,629,600 | ||||||
|
|
|||||||
17,190,250 | ||||||||
Georgia 2.0% | ||||||||
County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A (GTD), 5.50%, 08/15/54 |
1,010 | 1,103,920 | ||||||
Main Street Natural Gas, Inc., RB, Series A: |
||||||||
5.00%, 05/15/35 |
990 | 1,127,966 | ||||||
5.00%, 05/15/36 |
990 | 1,124,115 | ||||||
5.00%, 05/15/37 |
1,085 | 1,236,792 | ||||||
5.00%, 05/15/38 |
600 | 679,416 | ||||||
5.00%, 05/15/49 |
1,990 | 2,310,689 | ||||||
Municipal Electric Authority of Georgia, RB, Plant Vogtle Units 3 & 4 Project, 4.00%, 01/01/49 |
3,145 | 2,827,575 |
SCHEDULES OF INVESTMENTS | 29 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Municipal Income Trust (BFK) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Georgia (continued) | ||||||||
Municipal Electric Authority of Georgia, Refunding RB, Series A, 4.00%, 01/01/49 |
$ | 1,230 | $ | 1,183,420 | ||||
|
|
|||||||
11,593,893 | ||||||||
Hawaii 0.5% | ||||||||
State of Hawaii Harbor System, ARB, Series A, 5.25%, 07/01/30 |
2,660 | 2,677,157 | ||||||
|
|
|||||||
Idaho 0.3% | ||||||||
Idaho Health Facilities Authority, RB, Trinity Health Credit Group, Series A, 5.00%, 12/01/46 |
1,485 | 1,635,015 | ||||||
|
|
|||||||
Illinois 15.4% | ||||||||
Chicago Board of Education, GO, Series C: |
||||||||
Dedicated Revenues, Series H, 5.00%, 12/01/36 |
920 | 886,825 | ||||||
Project, 5.25%, 12/01/35 |
2,905 | 2,877,606 | ||||||
Chicago Board of Education, GO, Refunding: |
||||||||
Dedicated Revenues, Series D, 5.00%, 12/01/25 |
1,650 | 1,684,072 | ||||||
Dedicated Revenues, Series F, 5.00%, 12/01/22 |
1,250 | 1,272,637 | ||||||
Dedicated Revenues, Series G, 5.00%, 12/01/34 |
915 | 883,277 | ||||||
5.00%, 12/01/25 |
1,280 | 1,306,432 | ||||||
Chicago Board of Education, GO: |
||||||||
5.00%, 12/01/46 |
1,060 | 954,117 | ||||||
5.00%, 12/01/46 |
2,745 | 2,374,205 | ||||||
City of Chicago Illinois OHare International Airport, GARB, 3rd Lien, Series C, 6.50%, 01/01/21(b) |
11,385 | 11,810,230 | ||||||
City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40 |
2,055 | 2,160,771 | ||||||
City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien Project, 5.00%, 11/01/42 |
2,000 | 2,011,460 | ||||||
County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38 |
1,525 | 1,545,496 | ||||||
Illinois Finance Authority, RB, Chicago LLC, University of Illinois at Chicago Project, Series A: |
||||||||
5.00%, 02/15/47 |
405 | 401,610 | ||||||
5.00%, 02/15/50 |
205 | 202,278 | ||||||
Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project Bonds, Series A, 5.00%, 06/15/57 |
1,760 | 1,567,315 | ||||||
Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project: |
||||||||
4.00%, 06/15/50 |
2,710 | 2,256,644 | ||||||
Series B (AGM), 0.00%, 06/15/43 (c) |
10,455 | 3,695,947 | ||||||
Series B (AGM), 5.00%, 06/15/50 |
14,710 | 14,745,304 | ||||||
Series B-2, 5.00%, 06/15/50 |
3,905 | 3,905,117 | ||||||
Rail splitter Tobacco Settlement Authority, RB, 6.00%, 06/01/21(b) |
2,245 | 2,369,126 | ||||||
State of Illinois, GO, 5.00%, 02/01/39 |
2,990 | 2,654,313 | ||||||
State of Illinois, GO, Refunding: |
||||||||
Series A, 5.00%, 10/01/30 |
10,400 | 9,934,808 | ||||||
Series B, 5.00%, 10/01/28 |
1,965 | 1,915,168 | ||||||
State of Illinois, GO, Series A, 5.00%, 04/01/38 |
9,030 | 8,040,763 | ||||||
State of Illinois Toll Highway Authority, RB, Series C, 5.00%, 01/01/37 |
5,455 | 5,971,534 | ||||||
University of Illinois, RB, Auxiliary Facilities System, Series A, 5.00%, 04/01/44 |
1,910 | 1,977,843 | ||||||
|
|
|||||||
89,404,898 | ||||||||
Indiana 3.4% | ||||||||
City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT: |
||||||||
6.75%, 01/01/34 |
1,525 | 1,595,699 | ||||||
7.00%, 01/01/44 |
3,680 | 3,856,272 | ||||||
Indiana Finance Authority, RB, Series A: |
||||||||
CWA Authority Project, 1st Lien, 5.25%, 10/01/38 |
6,305 | 6,637,967 |
Security |
Par
(000) |
Value | ||||||
Indiana (continued) | ||||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/44 |
$ | 880 | $ | 900,618 | ||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/48 |
2,905 | 2,981,692 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.25%, 01/01/51 |
790 | 809,371 | ||||||
Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 01/15/40 |
2,490 | 2,715,221 | ||||||
|
|
|||||||
19,496,840 | ||||||||
Iowa 1.4% | ||||||||
Iowa Finance Authority, Refunding RB, Iowa Fertilizer Co. Project: |
||||||||
Series B, 5.25%, 12/01/50(g) |
5,515 | 5,258,332 | ||||||
Midwestern Disaster Area, 5.25%, 12/01/25 |
2,125 | 2,114,524 | ||||||
Midwestern Disaster Area, 5.88%, 12/01/26(a) |
805 | 816,946 | ||||||
|
|
|||||||
8,189,802 | ||||||||
Kentucky 1.2% | ||||||||
Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 01/01/23 (b) |
1,915 | 2,107,860 | ||||||
Kentucky Economic Development Finance Authority, Refunding RB, Louisville Arena Authority, Inc. (AGM), 5.00%, 12/01/45 |
2,515 | 2,799,572 | ||||||
Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 6.75%, 07/01/43(h) |
2,325 | 2,172,433 | ||||||
|
|
|||||||
7,079,865 | ||||||||
Louisiana 2.8% | ||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35 |
6,535 | 6,617,145 | ||||||
Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A: |
||||||||
5.50%, 05/15/30 |
1,980 | 1,982,772 | ||||||
5.25%, 05/15/31 |
1,690 | 1,735,326 | ||||||
5.25%, 05/15/32 |
2,160 | 2,268,821 | ||||||
5.25%, 05/15/33 |
2,345 | 2,461,781 | ||||||
5.25%, 05/15/35 |
985 | 1,044,326 | ||||||
|
|
|||||||
16,110,171 | ||||||||
Maryland 1.2% | ||||||||
Maryland EDC, Refunding RB, CNX Marine Terminal, Inc., 5.75%, 09/01/25 |
1,440 | 1,448,309 | ||||||
Maryland Health & Higher Educational Facilities Authority, RB, Trinity Health Credit Group, Series 2017, 5.00%, 12/01/46 |
840 | 924,857 | ||||||
Maryland Health & Higher Educational Facilities Authority, Refunding RB, Charlestown Community Project, 6.25%, 01/01/21(b) |
4,295 | 4,440,858 | ||||||
|
|
|||||||
6,814,024 | ||||||||
Michigan 3.2% | ||||||||
City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 07/01/39 |
8,665 | 9,201,104 | ||||||
Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 05/15/36 |
1,210 | 1,211,367 | ||||||
Michigan Finance Authority, Refunding RB: |
||||||||
Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 07/01/44 |
1,710 | 1,776,092 | ||||||
Series A, 4.00%, 12/01/49 |
1,640 | 1,685,313 | ||||||
Michigan State University, Refunding RB, Board of Trustees, Series B, 5.00%, 02/15/48 |
2,000 | 2,368,340 | ||||||
Michigan Strategic Fund, RB, I-75 Improvement Projects, AMT, 5.00%, 06/30/48 |
2,120 | 2,134,861 | ||||||
|
|
|||||||
18,377,077 |
30 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Municipal Income Trust (BFK) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Minnesota 1.1% | ||||||||
Duluth Economic Development Authority, Refunding RB, Essentia Health Obligated Group, Series A: |
||||||||
4.25%, 02/15/48 |
$ | 2,030 | $ | 2,062,135 | ||||
5.25%, 02/15/53 |
4,060 | 4,436,565 | ||||||
|
|
|||||||
6,498,700 | ||||||||
Missouri 0.2% | ||||||||
Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44 |
495 | 532,971 | ||||||
State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 05/01/43 |
480 | 501,912 | ||||||
|
|
|||||||
1,034,883 | ||||||||
Nebraska 0.8% | ||||||||
Central Plains Energy Project, RB, Gas Project No. 3: |
||||||||
5.25%, 09/01/37 |
1,610 | 1,713,942 | ||||||
5.00%, 09/01/42 |
2,815 | 2,978,748 | ||||||
|
|
|||||||
4,692,690 | ||||||||
New Hampshire 0.7% | ||||||||
New Hampshire Business Finance Authority, Refunding RB, Resource Recovery, Covanta Project(a): |
||||||||
Series B, 4.63%, 11/01/42 |
3,055 | 2,738,777 | ||||||
Series C, AMT, 4.88%, 11/01/42 |
1,585 | 1,432,792 | ||||||
|
|
|||||||
4,171,569 | ||||||||
New Jersey 15.5% | ||||||||
Casino Reinvestment Development Authority, Inc., Refunding RB: |
||||||||
5.25%, 11/01/39 |
3,280 | 3,156,344 | ||||||
5.25%, 11/01/44 |
2,980 | 2,770,268 | ||||||
County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 07/01/45(a) |
2,115 | 2,120,034 | ||||||
County of Middlesex New Jersey Improvement Authority, RB, Heldrich Center Hotel, Sub-Series B,
|
3,680 | 52,440 | ||||||
New Jersey EDA, RB: |
||||||||
Continental Airlines, Inc. Project, Series B, AMT, 5.63%, 11/15/30 |
2,035 | 2,020,938 | ||||||
Goethals Bridge Replacement Project, AMT, Private Activity Bond, 5.38%, 01/01/43 |
2,285 | 2,323,182 | ||||||
School Facilities Construction, 5.00%, 06/15/49 |
4,650 | 4,422,197 | ||||||
Series EEE, 5.00%, 06/15/48 |
7,320 | 6,972,739 | ||||||
Transit transportation Project, 4.00%, 11/01/38 |
1,030 | 914,434 | ||||||
Transit transportation Project, 4.00%, 11/01/39 |
825 | 729,531 | ||||||
New Jersey EDA, Refunding ARB, Port Network Container Terminal LLC Project, AMT, 5.00%, 10/01/47 |
2,905 | 2,719,341 | ||||||
New Jersey EDA, Refunding RB, Special Assessment, Kapkowski Road Landfill Project, 6.50%, 04/01/28 |
8,000 | 8,611,440 | ||||||
New Jersey State Turnpike Authority, RB: |
||||||||
Series A, 5.00%, 01/01/43 |
3,035 | 3,191,758 | ||||||
Series E, 5.00%, 01/01/45 |
5,095 | 5,532,049 | ||||||
New Jersey Transportation Trust Fund Authority, RB: |
||||||||
Series BB, 4.00%, 06/15/50 |
3,010 | 2,571,533 | ||||||
Series BB, 5.00%, 06/15/50 |
9,895 | 9,402,328 | ||||||
Transportation Program, Series AA, 5.00%, 06/15/44 |
3,765 | 3,637,630 | ||||||
Transportation System, Series A, 5.50%, 06/15/21(b) |
8,000 | 8,439,280 | ||||||
Transportation System, Series B, 5.25%, 06/15/36 |
4,810 | 4,819,380 | ||||||
Tobacco Settlement Financing Corp., Refunding RB: |
||||||||
Series A, 5.25%, 06/01/46 |
1,070 | 1,140,278 | ||||||
Sub-Series B, 5.00%, 06/01/46 |
14,320 | 14,396,182 | ||||||
|
|
|||||||
89,943,306 |
Security |
Par
(000) |
Value | ||||||
New York 9.8% | ||||||||
City of New York Transitional Finance Authority Future Tax Secured Revenue, RB, Fiscal 2012, Sub-Series E-1, 5.00%, 02/01/42 |
$ | 4,805 | $ | 5,048,469 | ||||
Counties of New York Tobacco Trust II, RB, Settlement Pass-Through, 5.75%, 06/01/43 |
840 | 841,999 | ||||||
Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A, 6.25%, 06/01/41(a) |
3,600 | 3,591,000 | ||||||
Counties of New York Tobacco Trust VI, Refunding RB, Tobacco Settlement Pass-Through, Series A-2B, 5.00%, 06/01/45 |
9,395 | 8,635,790 | ||||||
County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44 |
1,655 | 1,740,682 | ||||||
Metropolitan Transportation Authority, RB, Series B: |
||||||||
5.25%, 11/15/38 |
4,640 | 4,813,072 | ||||||
5.25%, 11/15/39 |
1,650 | 1,710,225 | ||||||
New York Liberty Development Corp., Refunding RB, 3 World Trade Center Project(a): |
||||||||
Class 1, 5.00%, 11/15/44 |
7,830 | 7,216,833 | ||||||
Class 2, 5.15%, 11/15/34 |
660 | 632,636 | ||||||
Class 2, 5.38%, 11/15/40 |
1,655 | 1,627,080 | ||||||
New York State Dormitory Authority, Refunding RB, Series D, 5.00%, 02/15/37 |
6,655 | 6,996,135 | ||||||
New York Transportation Development Corp., ARB, LaGuardia Airport Terminal B Redevelopment Project, Series A, AMT, 5.25%, 01/01/50 |
1,165 | 1,187,718 | ||||||
New York Transportation Development Corp., Refunding ARB, American Airlines, Inc., AMT, 5.00%, 08/01/31 |
1,065 | 1,034,466 | ||||||
Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8: |
||||||||
6.00%, 12/01/36 |
2,525 | 2,570,298 | ||||||
6.00%, 12/01/42 |
1,960 | 1,971,878 | ||||||
State of New York Environmental Facilities Corp., RB, Subordinated SRF Bonds, Series B, 5.00%, 06/15/48 |
3,535 | 4,181,905 | ||||||
State of New York Power Authority, RB, Series A, 4.00%, 11/15/60(i) |
2,655 | 2,799,459 | ||||||
|
|
|||||||
56,599,645 | ||||||||
North Carolina 0.4% | ||||||||
North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 03/01/21(b) |
1,130 | 1,194,082 | ||||||
University of North Carolina at Chapel Hill, RB, University of North Carolina Hospital at Chapel Hills, 5.00%, 02/01/49 |
1,080 | 1,381,039 | ||||||
|
|
|||||||
2,575,121 | ||||||||
North Dakota 0.3% | ||||||||
County of Cass North Dakota, Refunding RB, Essentia Health Obligated Group, Series B, 5.25%, 02/15/58 |
1,885 | 2,053,425 | ||||||
|
|
|||||||
Ohio 2.7% | ||||||||
Buckeye Tobacco Settlement Financing Authority, Refunding RB, Senior: |
||||||||
Class 1, Series A-2, 4.00%, 06/01/37 |
580 | 620,896 | ||||||
Class 1, Series A-2, 4.00%, 06/01/38 |
580 | 620,913 | ||||||
Class 1, Series A-2, 4.00%, 06/01/39 |
580 | 615,798 | ||||||
Class 1, Series A-2, 4.00%, 06/01/48 |
1,525 | 1,505,602 | ||||||
Class 2, Series B-2, 5.00%, 06/01/55 |
6,705 | 5,931,779 | ||||||
County of Franklin Ohio, RB: |
||||||||
OPRS Communities Obligation Group, Series A, 6.13%, 07/01/22(b) |
75 | 83,480 | ||||||
OPRS Communities Obligation Group, Series A, 6.13%, 07/01/40 |
1,205 | 1,224,593 |
SCHEDULES OF INVESTMENTS | 31 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Municipal Income Trust (BFK) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Ohio (continued) | ||||||||
Series A, 4.00%, 12/01/49 |
$ | 1,015 | $ | 1,069,739 | ||||
Trinity Health Credit Group, Series 2017, 5.00%, 12/01/46 |
800 | 889,888 | ||||||
Ohio Air Quality Development Authority, RB, AMG Vanadium Project, AMT, 5.00%, 07/01/49(a) |
1,480 | 1,344,639 | ||||||
State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 06/30/53 |
1,585 | 1,738,983 | ||||||
|
|
|||||||
15,646,310 | ||||||||
Oklahoma 1.9% | ||||||||
City of Oklahoma Turnpike Authority, RB, Series A, 4.00%, 01/01/48 |
4,065 | 4,396,623 | ||||||
Oklahoma Development Finance Authority, RB, OU Medicine Project, Series B, 5.25%, 08/15/48 |
2,350 | 2,418,103 | ||||||
Oklahoma Turnpike Authority, RB, 2nd Series C, 4.00%, 01/01/42 |
3,845 | 4,178,938 | ||||||
|
|
|||||||
10,993,664 | ||||||||
Pennsylvania 2.7% | ||||||||
Allentown Neighborhood Improvement Zone Development Authority, RB, Subordinate, City Center Project(a): |
||||||||
5.00%, 05/01/28 |
420 | 422,915 | ||||||
5.13%, 05/01/32 |
470 | 469,253 | ||||||
5.38%, 05/01/42 |
870 | 831,589 | ||||||
City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 07/01/42 |
1,240 | 1,283,313 | ||||||
County of Montgomery Higher Education & Health Authority, Refunding RB, Thomas Jefferson University, Series A: |
||||||||
4.00%, 09/01/49 |
1,135 | 1,141,867 | ||||||
5.00%, 09/01/43 |
2,505 | 2,749,814 | ||||||
Pennsylvania Economic Development Financing Authority, RB, AMT, 5.00%, 06/30/42 |
1,660 | 1,672,051 | ||||||
Pennsylvania Higher Educational Facilities Authority, RB, University of Pennsylvania Health System Obligation, 4.00%, 08/15/49 |
4,665 | 4,914,484 | ||||||
Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44 |
2,155 | 2,319,879 | ||||||
|
|
|||||||
15,805,165 | ||||||||
Puerto Rico 5.6% | ||||||||
Childrens Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds: |
||||||||
5.50%, 05/15/39 |
1,365 | 1,366,078 | ||||||
5.63%, 05/15/43 |
1,360 | 1,339,736 | ||||||
Commonwealth of Puerto Rico Aqueduct & Sewer Authority, RB, Senior Lien, Series A: |
||||||||
5.00%, 07/01/33 |
4,920 | 4,673,262 | ||||||
5.13%, 07/01/37 |
1,410 | 1,331,308 | ||||||
Commonwealth of Puerto Rico Aqueduct & Sewer Authority, Refunding RB, Senior Lien, Series A: |
||||||||
6.00%, 07/01/38 |
1,455 | 1,442,953 | ||||||
6.00%, 07/01/44 |
2,630 | 2,629,526 | ||||||
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB, Restructured: |
||||||||
CAB, Series A-1, 0.00%, 07/01/46(c) |
3,084 | 709,197 | ||||||
Series A-1, 4.75%, 07/01/53 |
3,143 | 2,831,309 | ||||||
Series A-1, 5.00%, 07/01/58 |
12,112 | 11,312,850 | ||||||
Series A-2, 4.33%, 07/01/40 |
1,950 | 1,741,545 | ||||||
Series A-2, 4.78%, 07/01/58 |
3,325 | 2,993,132 | ||||||
|
|
|||||||
32,370,896 | ||||||||
Rhode Island 2.5% | ||||||||
Tobacco Settlement Financing Corp., Refunding RB: |
||||||||
Series A, 5.00%, 06/01/35 |
3,060 | 3,221,048 | ||||||
Series B, 4.50%, 06/01/45 |
5,175 | 5,275,136 |
Security |
Par
(000) |
Value | ||||||
Rhode Island (continued) | ||||||||
Series B, 5.00%, 06/01/50 |
$ | 5,765 | $ | 6,024,771 | ||||
|
|
|||||||
14,520,955 | ||||||||
South Carolina 5.7% | ||||||||
South Carolina Jobs EDA, Refunding RB: |
||||||||
Anmed Health Project, 5.00%, 02/01/36 |
5,115 | 5,638,469 | ||||||
Prisma Health Obligated Group, Series A, 5.00%, 05/01/48 |
6,075 | 6,552,981 | ||||||
South Carolina Jobs-Economic Development Authority, RB, Bishop Gadsden Episcopal Retirement Community: |
||||||||
5.00%, 04/01/44 |
160 | 160,122 | ||||||
4.00%, 04/01/49 |
150 | 122,235 | ||||||
5.00%, 04/01/49 |
480 | 471,763 | ||||||
4.00%, 04/01/54 |
370 | 294,553 | ||||||
5.00%, 04/01/54 |
875 | 852,093 | ||||||
State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54 |
12,065 | 12,733,884 | ||||||
State of South Carolina Public Service Authority, Refunding RB: |
||||||||
Series A, 5.00%, 12/01/50 |
2,805 | 2,928,560 | ||||||
Series E, 5.25%, 12/01/55 |
3,335 | 3,531,098 | ||||||
|
|
|||||||
33,285,758 | ||||||||
Tennessee 0.7% | ||||||||
City of Chattanooga Health Educational & Housing Facility Board, Refunding RB, Commonspirit Health, Series A, 4.00%, 08/01/44 |
315 | 306,019 | ||||||
County of Nashville & Davidson Metropolitan Government Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 07/01/40 |
1,350 | 1,462,185 | ||||||
County of Nashville & Davidson Metropolitan Government Health & Educational Facilities Board, Refunding RB, Lipscomb University Project, Series A, 5.25%, 10/01/58 |
1,925 | 2,052,108 | ||||||
|
|
|||||||
3,820,312 | ||||||||
Texas 11.0% | ||||||||
Central Texas Regional Mobility Authority, Refunding RB: |
||||||||
Senior Lien, 6.25%, 01/01/21(b) |
4,210 | 4,363,076 | ||||||
Sub-Lien, 5.00%, 01/01/33 |
700 | 719,012 | ||||||
City of Austin Texas Airport System, ARB, AMT, 5.00%, 11/15/39 |
385 | 411,107 | ||||||
City of San Antonio Texas Electric & Gas Systems Revenue, Refunding RB, Series A, 5.00%, 02/01/48 |
2,295 | 2,742,594 | ||||||
County of Fort Bend Texas Industrial Development Corp., RB, NRG Energy Inc. Project, Series B, 4.75%, 11/01/42 |
470 | 481,167 | ||||||
County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B(b): |
||||||||
7.00%, 01/01/23 |
380 | 440,184 | ||||||
7.00%, 01/01/23 |
500 | 579,485 | ||||||
County of Harris Texas-Houston Sports Authority, Refunding RB(c): |
||||||||
3rd Lien, Series A (NPFGC), 0.00%, 11/15/24(b) |
6,000 | 2,618,580 | ||||||
3rd Lien, Series A (NPFGC), 0.00%, 11/15/37 |
20,120 | 7,471,763 | ||||||
CAB, Junior Lien, Series H (NPFGC), 0.00%, 11/15/35 |
5,000 | 2,729,750 | ||||||
CAB, Senior Lien, Series A (NPFGC) (AGM), 0.00%, 11/15/38 |
12,580 | 5,501,611 | ||||||
County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A(c): |
||||||||
0.00%, 09/15/40 |
9,780 | 4,185,840 | ||||||
0.00%, 09/15/41 |
5,420 | 2,198,352 | ||||||
County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Christus Health, Series B, 5.00%, 07/01/48 |
9,025 | 10,004,122 |
32 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Municipal Income Trust (BFK) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Texas (continued) | ||||||||
New Hope Cultural Education Facilities Corp., RB, Collegiate Housing Tarleton State University Project, 5.00%, 04/01/35 |
$ | 355 | $ | 362,420 | ||||
New Hope Cultural Education Facilities Finance Corp., Refunding RB, Jubilee Academic Center, Series A, 5.00%, 08/15/46(a) |
1,980 | 1,674,981 | ||||||
San Antonio Water System, Refunding RB, Junior Lien, Series A, 5.00%, 05/15/48 |
5,035 | 5,946,033 | ||||||
Texas Municipal Gas Acquisition & Supply Corp. III, RB, Natural Gas Utility Improvements, 5.00%, 12/15/32 |
2,835 | 2,936,011 | ||||||
Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, LBJ Infrastructure Group LLC, 7.00%, 06/30/40 |
6,000 | 6,014,520 | ||||||
Texas Transportation Commission, RB, First Tier Toll Revenue, 5.00%, 08/01/57 |
2,310 | 2,335,295 | ||||||
|
|
|||||||
63,715,903 | ||||||||
Utah 0.7% | ||||||||
City of Salt Lake Corp. Airport Revenue, ARB, Series A, AMT: |
||||||||
5.00%, 07/01/48 |
1,735 | 1,909,576 | ||||||
5.00%, 07/01/47 |
1,830 | 1,983,756 | ||||||
|
|
|||||||
3,893,332 | ||||||||
Virginia 1.5% | ||||||||
County of Front Royal & Warren IDA, RB, Valley Health System Obligated Group, 4.00%, 01/01/50 |
1,465 | 1,502,870 | ||||||
Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT: |
||||||||
5.25%, 01/01/32 |
3,155 | 3,210,055 | ||||||
6.00%, 01/01/37 |
3,790 | 3,906,846 | ||||||
|
|
|||||||
8,619,771 | ||||||||
Washington 1.8% | ||||||||
Port of Seattle Washington, ARB, Series A, AMT, 5.00%, 05/01/43 |
2,980 | 3,231,124 | ||||||
Port of Seattle Washington, RB, Intermediate Lien, Series C, AMT, 5.00%, 04/01/40 |
1,475 | 1,564,208 | ||||||
Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 01/01/45 |
4,420 | 4,738,240 | ||||||
Washington Health Care Facilities Authority, Refunding RB, Commonspirit Health, Series A, 4.00%, 08/01/44 |
685 | 665,471 | ||||||
|
|
|||||||
10,199,043 | ||||||||
|
|
|||||||
Total Municipal Bonds 127.5%
|
737,886,581 | |||||||
|
|
|||||||
Municipal Bonds Transferred to Tender Option Bond Trusts(j) 37.4% |
|
|||||||
California 1.2% |
||||||||
Bay Area Toll Authority, Refunding RB, San Francisco Bay Area Toll Bridge, 4.00%, 04/01/42(k) |
6,196 | 6,629,931 | ||||||
|
|
|||||||
Colorado 0.9% | ||||||||
City & County of Denver Colorado Airport System Revenue, Refunding ARB, Subordinate System, Series A, AMT, 5.25%, 12/01/48(k) |
4,475 | 4,996,165 | ||||||
|
|
|||||||
Georgia 1.8% | ||||||||
County of Dalton Whitfield Joint Development Authority, RB, Hamilton Health Care System Obligation, 4.00%, 08/15/48 |
7,220 | 7,446,492 | ||||||
Georgia Housing & Finance Authority, RB, S/F Housing, Series 2020, 3.60%, 12/01/26(a)(g) |
2,898 | 3,003,956 | ||||||
|
|
|||||||
10,450,448 |
Security |
Par
(000) |
Value | ||||||
Illinois 0.5% | ||||||||
Illinois Finance Authority, Refunding RB, Presence Health Network, Series C: |
||||||||
4.00%, 02/15/27(b) |
$ | 5 | $ | 5,713 | ||||
4.00%, 02/15/41 |
2,800 | 2,953,466 | ||||||
|
|
|||||||
2,959,179 | ||||||||
Massachusetts 3.3% | ||||||||
Commonwealth of Massachusetts Transportation Fund Revenue, RB, Rail Enhancement Program, Series A, 4.00%, 06/01/45 |
4,153 | 4,425,134 | ||||||
Massachusetts Development Finance Agency, Refunding RB, Partners Healthcare System, 5.00%, 07/01/47 |
9,088 | 9,959,468 | ||||||
Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/21(b) |
4,427 | 4,698,121 | ||||||
|
|
|||||||
19,082,723 | ||||||||
New York 16.2% | ||||||||
City of New York Water & Sewer System, Refunding RB, 2nd General Resolution, Series HH, 5.00%, 06/15/31(k) |
16,395 | 17,051,948 | ||||||
Hudson Yards Infrastructure Corp., RB, Senior-Fiscal 2012(k): |
||||||||
5.75%, 02/15/21(b) |
1,938 | 2,006,006 | ||||||
5.75%, 02/15/47 |
1,192 | 1,234,034 | ||||||
New York Liberty Development Corp., ARB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43 |
20,864 | 21,879,470 | ||||||
New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51(k) |
12,611 | 13,152,570 | ||||||
New York State Dormitory Authority, Refunding RB, Series D, 4.00%, 02/15/47 |
12,060 | 12,954,611 | ||||||
New York State Thruway Authority, Refunding RB, Subordinate, Series B, 4.00%, 01/01/50 |
5,805 | 5,960,170 | ||||||
Port Authority of New York & New Jersey, Refunding ARB, Series194th, 5.25%, 10/15/55 |
5,070 | 5,587,850 | ||||||
State of New York Urban Development Corp., RB, State Personal Income Tax, General Purpose, Series A, 4.00%, 03/15/46 |
13,155 | 14,179,248 | ||||||
|
|
|||||||
94,005,907 | ||||||||
North Carolina 1.0% | ||||||||
North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project, Series B, 5.00%, 10/01/55 |
4,960 | 5,656,930 | ||||||
|
|
|||||||
Pennsylvania 0.9% | ||||||||
Pennsylvania Turnpike Commission, RB, Sub-Series A, 5.50%, 12/01/42 |
4,652 | 5,230,844 | ||||||
|
|
|||||||
Rhode Island 0.6% | ||||||||
Narragansett Bay Commission, Refunding RB, Wastewater System, Series A, 4.00%, 09/01/22(b) |
3,137 | 3,374,278 | ||||||
|
|
|||||||
Texas 7.7% | ||||||||
City of San Antonio Texas Electric & Gas Systems Revenue, RB, Junior Lien, 5.00%, 02/01/43 |
4,900 | 5,330,857 | ||||||
County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/21(b) |
6,650 | 7,065,825 | ||||||
Lower Colorado River Authority, Refunding RB, LCRA Transmission Services Corporation Project, 4.00%, 05/15/43 |
4,140 | 4,247,060 | ||||||
San Antonio Public Facilities Corp., Refunding RB, Convention Center Refinancing and Expansion Project, 4.00%, 09/15/42 |
5,505 | 5,716,998 | ||||||
Texas Water Development Board, RB, State Water Implementation Fund, Series A, 4.00%, 10/15/49 |
13,920 | 15,546,830 | ||||||
University of Texas, Refunding RB, Financing System, Series B, 5.00%, 08/15/43 |
6,003 | 6,469,528 | ||||||
|
|
|||||||
44,377,098 |
SCHEDULES OF INVESTMENTS | 33 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Municipal Income Trust (BFK) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Virginia 1.7% | ||||||||
Virginia Small Business Financing Authority, Refunding RB, Bon Secours Health System, Series A, 4.00%, 12/01/49 |
$ | 9,678 | $ | 10,028,749 | ||||
|
|
|||||||
Washington 0.6% | ||||||||
Metropolitan Washington Airports Authority Dulles Toll Road Revenue, Refunding RB, Subordinate, Dulles Metrorail And Capital Improvement Projects, Series B (AGM), 4.00%, 10/01/53 |
3,639 | 3,683,798 | ||||||
|
|
|||||||
Wisconsin 1.0% | ||||||||
State of Wisconsin Health & Educational Facilities Authority, Refunding RB, The Medical College of Wisconsin, Inc., 4.00%, 12/01/46 |
5,575 | 5,944,446 | ||||||
|
|
|||||||
Total Municipal Bonds Transferred to Tender Option
|
|
216,420,496 | ||||||
|
|
|||||||
Total Long-Term Investments
164.9%
|
|
954,307,077 | ||||||
|
|
|||||||
Shares | ||||||||
Short-Term Securities 2.3% | ||||||||
BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.15%(l)(m) |
13,732,433 | 13,735,179 | ||||||
|
|
|||||||
Total Short-Term Securities
2.3%
|
|
13,735,179 | ||||||
Total Investments 167.2%
|
|
968,042,256 | ||||||
Other Assets Less Liabilities 3.0% |
|
17,528,805 | ||||||
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable (23.4)% |
|
(135,964,040 | ) | |||||
VMTP Shares, at Liquidation Value (46.8)% |
|
(270,800,000 | ) | |||||
|
|
|||||||
Net Assets Applicable to Common Shares 100.0% |
|
$ | 578,807,021 | |||||
|
|
(a) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(b) |
U.S. Government securities held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par. |
(c) |
Zero-coupon bond. |
(d) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(e) |
Issuer filed for bankruptcy and/or is in default. |
(f) |
Non-income producing security. |
(g) |
Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end. |
(h) |
Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end. |
(i) |
When-issued security. |
(j) |
Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details. |
(k) |
All or a portion of the security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreements, which expire between August 15, 2020 to June 1, 2026, is $27,599,129. See Note 4 of the Notes to Financial Statements for details. |
(l) |
Annualized 7-day yield as of period end. |
(m) |
Investments in issuers considered to be an affiliate/affiliates of the Trust during the year ended April 30, 2020 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
Affiliated Issuer |
Shares
Held at 04/30/19 |
Shares
Purchased |
Shares
Sold |
Shares
Held at 04/30/20 |
Value at
04/30/20 |
Income |
Net
Realized Gain (Loss) (a) |
Change in
Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||
BlackRock Liquidity Funds, MuniCash, Institutional Class |
18,183,806 | | (4,451,373 | )(b) | 13,732,433 | $ | 13,735,179 | $ | 97,242 | $ | 206 | $ | 7,094 | |||||||||||||||||||
|
|
|
|
|
|
|
|
(a) |
Includes net capital gain distributions, if applicable. |
(b) |
Represents net shares purchased/sold. |
Derivative Financial Instruments Categorized by Risk Exposure
For the year ended April 30, 2020, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity
Contracts |
Credit
Contracts |
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate
|
Other
Contracts |
Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | | $ | | $ | (10,474,133 | ) | $ | | $ | (10,474,133 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on: |
||||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | | $ | | $ | 213,210 | $ | | $ | 213,210 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Municipal Income Trust (BFK) |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts Long |
$ | | (a) | |
Average notional value of contracts Short |
$ | 33,069,951 |
(a) |
Derivative not held at any quarter-end. The risk exposure table serves as an indicator of activity during the period. |
For more information about the Trusts investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments. For information about the Trusts policy regarding valuation of investments, refer to the Notes to Financial Statements.
The following tables summarize the Trusts investments categorized in the disclosure hierarchy:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: |
||||||||||||||||
Investments: |
|
|||||||||||||||
Long-Term Investments(a) |
$ | | $ | 952,677,477 | $ | 1,629,600 | $ | 954,307,077 | ||||||||
Short-Term Securities |
13,735,179 | | | 13,735,179 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 13,735,179 | $ | 952,677,477 | $ | 1,629,600 | $ | 968,042,256 | |||||||||
|
|
|
|
|
|
|
|
(a) |
See above Schedule of Investments for values in each state or political subdivision. |
The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: |
|
|||||||||||||||
TOB Trust Certificates |
$ | | $ | (135,463,834 | ) | $ | | $ | (135,463,834 | ) | ||||||
VMTP Shares at Liquidation Value |
| (270,800,000 | ) | | (270,800,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | | $ | (406,263,834 | ) | $ | | $ | (406,263,834 | ) | |||||||
|
|
|
|
|
|
|
|
See notes to financial statements
SCHEDULES OF INVESTMENTS | 35 |
Schedule of Investments April 30, 2020 |
BlackRock Strategic Municipal Trust (BSD) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Municipal Bonds 120.0% |
||||||||
Alabama 2.5% | ||||||||
County of Jefferson Alabama Sewer, Refunding RB, Sub-Lien, Series D, 7.00%, 10/01/51 |
$ | 1,115 | $ | 1,292,285 | ||||
Madison Water & Wastewater Board, RB, 3.00%, 12/01/50 |
380 | 376,451 | ||||||
State of Alabama Docks Department, Refunding RB, 6.00%, 10/01/20(a) |
655 | 668,991 | ||||||
|
|
|||||||
2,337,727 | ||||||||
Alaska 0.1% | ||||||||
Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A, 4.63%, 06/01/23 |
70 | 70,069 | ||||||
|
|
|||||||
Arizona 2.1% | ||||||||
City of Phoenix Industrial Development Authority, RB, Downtown Phoenix Student Housing, 5.00%, 07/01/59 |
465 | 478,345 | ||||||
County of Maricopa IDA, Refunding RB, Honorhealth, Series A, 4.13%, 09/01/38 |
230 | 242,312 | ||||||
Salt Verde Financial Corp., RB, Senior, 5.00%, 12/01/37 |
1,000 | 1,233,990 | ||||||
|
|
|||||||
1,954,647 | ||||||||
Arkansas 0.8% | ||||||||
Arkansas Development Finance Authority, RB, Big River Steel Project, AMT, 4.50%, 09/01/49(b) |
835 | 713,048 | ||||||
|
|
|||||||
California 6.0% | ||||||||
California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 07/01/33 |
400 | 436,052 | ||||||
California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F Housing, Series A: |
||||||||
5.25%, 08/15/39 |
45 | 48,602 | ||||||
5.25%, 08/15/49 |
115 | 121,868 | ||||||
California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45(b) |
475 | 480,391 | ||||||
California School Finance Authority, RB, Alliance For College-Ready Public School Projects, Series A, 5.00%, 07/01/51(b) |
500 | 504,605 | ||||||
City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior, Series A, 5.00%, 05/15/40 |
735 | 736,352 | ||||||
City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/23(a) |
110 | 129,944 | ||||||
County of California Tobacco Securitization Agency, Refunding RB, Golden Gate Tobacco Funding Corp., Series A, 5.00%, 06/01/36 |
350 | 337,817 | ||||||
Golden State Tobacco Securitization Corp., Refunding RB, Series A-2, 5.00%, 06/01/47 |
880 | 858,510 | ||||||
State of California, GO, Refunding, Various Purposes, 4.00%, 03/01/40 |
405 | 452,490 | ||||||
State of California, GO, Various Purposes, 6.00%, 03/01/33 |
270 | 270,934 | ||||||
State of California Public Works Board, LRB, Various Capital Projects, Series I, 5.00%, 11/01/38 |
240 | 261,238 | ||||||
State of California Public Works Board, RB, Department of Corrections & Rehabilitation, Series F, 5.25%, 09/01/33 |
915 | 1,021,964 | ||||||
|
|
|||||||
5,660,767 | ||||||||
Colorado 1.7% | ||||||||
Denver Convention Center Hotel Authority, Refunding RB, 5.00%, 12/01/40 |
1,325 | 1,324,974 | ||||||
Regional Transportation District, COP, Refunding, Series A, 5.38%, 06/01/20(a) |
320 | 321,043 | ||||||
|
|
|||||||
1,646,017 | ||||||||
Delaware 2.2% | ||||||||
County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40 |
820 | 829,422 |
Security |
Par
(000) |
Value | ||||||
Delaware (continued) | ||||||||
State of Delaware EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45 |
$ | 1,210 | $ | 1,210,254 | ||||
|
|
|||||||
2,039,676 | ||||||||
District of Columbia 1.3% | ||||||||
District of Columbia, Tax Allocation Bonds, City Market at O Street Project, 5.13%, 06/01/41 |
690 | 715,454 | ||||||
Metropolitan Washington Airports Authority Dulles Toll Road Revenue, Refunding RB, Subordinate, Dulles Metrorail and Capital Improvement Projects, 4.00%, 10/01/49 |
530 | 501,698 | ||||||
|
|
|||||||
1,217,152 | ||||||||
Florida 2.7% | ||||||||
County of Broward Airport System Revenue, ARB, AMT, Series A, 4.00%, 10/01/49 |
330 | 332,426 | ||||||
County of Osceola Florida Transportation Revenue, Refunding RB, Series A-2(c): |
||||||||
0.00%, 10/01/46 |
475 | 159,524 | ||||||
0.00%, 10/01/47 |
460 | 147,982 | ||||||
0.00%, 10/01/48 |
325 | 100,071 | ||||||
0.00%, 10/01/49 |
265 | 78,029 | ||||||
Mid-Bay Florida Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21(a) |
950 | 1,033,761 | ||||||
Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 05/01/43 |
695 | 706,801 | ||||||
|
|
|||||||
2,558,594 | ||||||||
Georgia 2.9% | ||||||||
County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A (GTD), 5.50%, 08/15/54 |
160 | 174,878 | ||||||
Main Street Natural Gas, Inc., RB, Series A, 5.00%, 05/15/49 |
780 | 905,697 | ||||||
Municipal Electric Authority of Georgia, RB, Plant Vogtle Units 3 & 4 Project: |
||||||||
4.00%, 01/01/49 |
535 | 514,739 | ||||||
4.00%, 01/01/59 |
1,010 | 938,250 | ||||||
Municipal Electric Authority of Georgia, Refunding RB, Series A, 4.00%, 01/01/49 |
200 | 192,426 | ||||||
|
|
|||||||
2,725,990 | ||||||||
Hawaii 0.5% | ||||||||
State of Hawaii Harbor System, ARB, Series A, 5.25%, 07/01/30 |
425 | 427,741 | ||||||
|
|
|||||||
Illinois 17.6% | ||||||||
Chicago Board of Education, GO, Project, 5.25%, 12/01/35 |
490 | 485,379 | ||||||
Chicago Board of Education, GO, Refunding: |
||||||||
Dedicated Revenues, Series D, 5.00%, 12/01/27 |
280 | 283,612 | ||||||
Dedicated Revenues, Series D, 5.00%, 12/01/31 |
150 | 149,133 | ||||||
Dedicated Revenues, Series F, 5.00%, 12/01/22 |
205 | 208,712 | ||||||
Dedicated Revenues, Series G, 5.00%, 12/01/44 |
150 | 131,271 | ||||||
5.00%, 12/01/25 |
215 | 219,440 | ||||||
Chicago Board of Education, GO, Series C: |
||||||||
5.00%, 12/01/46 |
175 | 157,519 | ||||||
5.00%, 12/01/46 |
460 | 397,863 | ||||||
City of Chicago Illinois OHare International Airport, GARB, 3rd Lien: |
||||||||
5.63%, 01/01/35 |
155 | 158,111 | ||||||
Series A, 5.75%, 01/01/21(a) |
1,260 | 1,301,971 | ||||||
Series A, 5.75%, 01/01/39 |
240 | 244,879 | ||||||
Series C, 6.50%, 01/01/21(a) |
1,855 | 1,924,284 | ||||||
City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40 |
330 | 346,985 | ||||||
City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien Project, 5.00%, 11/01/42 |
500 | 502,865 |
36 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Strategic Municipal Trust (BSD) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Illinois (continued) | ||||||||
County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38 |
$ | 245 | $ | 248,293 | ||||
Illinois Finance Authority, Refunding RB: |
||||||||
Ascension Health, Series A, 5.00%, 11/15/21(a) |
305 | 324,328 | ||||||
Presence Health Network, Series C, 5.00%, 02/15/41 |
1,600 | 1,803,952 | ||||||
Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project Bonds, Series A, 5.00%, 06/15/57 |
340 | 302,777 | ||||||
Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project: |
||||||||
CAB, Series B (AGM), 0.00%, 06/15/44(c) |
2,980 | 1,008,164 | ||||||
4.00%, 06/15/50 |
350 | 291,448 | ||||||
Series B (AGM), 5.00%, 06/15/50 |
1,280 | 1,283,072 | ||||||
Series B-2, 5.00%, 06/15/50 |
795 | 795,024 | ||||||
Railsplitter Tobacco Settlement Authority, RB(a): |
||||||||
5.50%, 06/01/21 |
175 | 183,727 | ||||||
6.00%, 06/01/21 |
940 | 991,973 | ||||||
State of Illinois, GO, 5.00%, 03/01/37 |
455 | 407,016 | ||||||
State of Illinois, GO, Refunding, Series B, 5.00%, 10/01/27 |
225 | 220,808 | ||||||
State of Illinois, GO, Series A: |
||||||||
5.00%, 04/01/35 |
1,000 | 904,260 | ||||||
5.00%, 04/01/38 |
1,135 | 1,010,661 | ||||||
University of Illinois, RB, Auxiliary Facilities System, Series A, 5.00%, 04/01/44 |
310 | 321,011 | ||||||
|
|
|||||||
16,608,538 | ||||||||
Indiana 4.2% | ||||||||
City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT: |
||||||||
6.75%, 01/01/34 |
245 | 256,358 | ||||||
7.00%, 01/01/44 |
1,090 | 1,142,211 | ||||||
Indiana Finance Authority, RB, Series A: |
||||||||
CWA Authority Project, 1st Lien, 5.25%, 10/01/38 |
1,020 | 1,073,867 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/44 |
140 | 143,280 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/48 |
465 | 477,276 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.25%, 01/01/51 |
125 | 128,065 | ||||||
Indiana Finance Authority, Refunding RB, Marquette Project, 4.75%, 03/01/32 |
350 | 341,880 | ||||||
Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 01/15/40 |
400 | 436,180 | ||||||
|
|
|||||||
3,999,117 | ||||||||
Iowa 2.3% | ||||||||
Iowa Finance Authority, Refunding RB, Iowa Fertilizer Co. Project: |
||||||||
Series B, 5.25%, 12/01/50(d) |
890 | 848,580 | ||||||
Midwestern Disaster Area, 5.25%, 12/01/25 |
145 | 144,285 | ||||||
Midwestern Disaster Area, 5.88%, 12/01/26(b) |
130 | 131,929 | ||||||
Iowa Student Loan Liquidity Corp., Refunding RB, AMT, Series B, 3.00%, 12/01/39 |
1,150 | 1,082,311 | ||||||
|
|
|||||||
2,207,105 | ||||||||
Kentucky 5.4% | ||||||||
Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 01/01/23(a) |
325 | 357,731 | ||||||
Kentucky Economic Development Finance Authority, Refunding RB, Norton Healthcare, Inc., Series B (NPFGC), 0.00%, 10/01/24(c) |
5,000 | 4,435,100 | ||||||
Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 6.75%, 07/01/43(e) |
375 | 350,392 | ||||||
|
|
|||||||
5,143,223 |
Security |
Par
(000) |
Value | ||||||
Louisiana 2.8% | ||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35 |
$ | 1,055 | $ | 1,068,261 | ||||
Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A: |
||||||||
5.50%, 05/15/30 |
320 | 320,448 | ||||||
5.25%, 05/15/31 |
270 | 277,242 | ||||||
5.25%, 05/15/32 |
345 | 362,381 | ||||||
5.25%, 05/15/33 |
375 | 393,675 | ||||||
5.25%, 05/15/35 |
160 | 169,637 | ||||||
|
|
|||||||
2,591,644 | ||||||||
Maryland 1.4% | ||||||||
Maryland EDC, Refunding RB, CNX Marine Terminal, Inc., 5.75%, 09/01/25 |
645 | 648,722 | ||||||
Maryland Health & Higher Educational Facilities Authority, Refunding RB, Charlestown Community Project, 6.25%, 01/01/21(a) |
690 | 713,432 | ||||||
|
|
|||||||
1,362,154 | ||||||||
Massachusetts 1.2% | ||||||||
Massachusetts Development Finance Agency, RB: |
||||||||
Emerson College Issue, Series A, 5.00%, 01/01/47 |
540 | 563,026 | ||||||
UMass Boston Student Housing Project, 5.00%, 10/01/48 |
600 | 598,050 | ||||||
|
|
|||||||
1,161,076 | ||||||||
Michigan 2.7% | ||||||||
City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 07/01/39 |
1,925 | 2,044,100 | ||||||
Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 05/15/36 |
195 | 195,220 | ||||||
Michigan Finance Authority, Refunding RB, Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 07/01/44 |
275 | 285,629 | ||||||
|
|
|||||||
2,524,949 | ||||||||
Minnesota 1.7% | ||||||||
Duluth Economic Development Authority, Refunding RB, Essentia Health Obligated Group, Series A: |
||||||||
4.25%, 02/15/48 |
1,190 | 1,208,838 | ||||||
5.25%, 02/15/58 |
400 | 435,400 | ||||||
|
|
|||||||
1,644,238 | ||||||||
Missouri 0.6% | ||||||||
Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44 |
80 | 86,137 | ||||||
County of St. Louis Missouri IDA, Refunding RB, Friendship Village St. Louis Obligated Group, 5.00%, 09/01/37 |
500 | 435,585 | ||||||
State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 05/01/43 |
80 | 83,652 | ||||||
|
|
|||||||
605,374 | ||||||||
Nebraska 0.8% | ||||||||
Central Plains Energy Project, RB, Gas Project No. 3: |
||||||||
5.25%, 09/01/37 |
260 | 276,786 | ||||||
5.00%, 09/01/42 |
455 | 481,467 | ||||||
|
|
|||||||
758,253 | ||||||||
New Hampshire 0.7% | ||||||||
New Hampshire Business Finance Authority, Refunding RB, Resource Recovery, Covanta
|
||||||||
Series B, 4.63%, 11/01/42 |
490 | 439,280 | ||||||
Series C, AMT, 4.88%, 11/01/42 |
285 | 257,631 | ||||||
|
|
|||||||
696,911 |
SCHEDULES OF INVESTMENTS | 37 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Strategic Municipal Trust (BSD) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
New Jersey 12.4% | ||||||||
Casino Reinvestment Development Authority, Inc., Refunding RB: |
||||||||
5.25%, 11/01/39 |
$ | 320 | $ | 307,936 | ||||
5.25%, 11/01/44 |
610 | 567,068 | ||||||
County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 07/01/45(b) |
340 | 340,809 | ||||||
County of Middlesex New Jersey Improvement Authority, RB, Heldrich Center Hotel, Sub-Series B,
|
645 | 9,191 | ||||||
New Jersey EDA, ARB, Continental Airlines, Inc. Project, 5.13%, 09/15/23 |
1,090 | 1,083,678 | ||||||
New Jersey EDA, RB: |
||||||||
Goethals Bridge Replacement Project, AMT, Private Activity Bond, 5.38%, 01/01/43 |
500 | 508,355 | ||||||
School Facilities Construction, Series EEE, 5.00%, 06/15/43 |
1,540 | 1,493,954 | ||||||
New Jersey EDA, Refunding RB, Series BBB, 5.50%, 06/15/31 |
775 | 806,263 | ||||||
New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 04/01/31 |
705 | 687,312 | ||||||
New Jersey Transportation Trust Fund Authority, RB: |
||||||||
Federal Highway Reimbursement Revenue Notes, Series A, 5.00%, 06/15/28 |
500 | 552,000 | ||||||
Transportation Program, Series AA, 5.00%, 06/15/45 |
415 | 399,309 | ||||||
Transportation System, Series A, 5.50%, 06/15/21(a) |
575 | 606,573 | ||||||
Transportation System, Series B, 5.25%, 06/15/36 |
790 | 791,541 | ||||||
Rutgers The State University of New Jersey, Refunding RB, Series L, 5.00%, 05/01/23(a) |
165 | 185,506 | ||||||
Tobacco Settlement Financing Corp., Refunding RB: |
||||||||
Series A, 5.00%, 06/01/35 |
450 | 502,803 | ||||||
Series A, 5.25%, 06/01/46 |
1,065 | 1,134,949 | ||||||
Sub-Series B, 5.00%, 06/01/46 |
1,755 | 1,764,337 | ||||||
|
|
|||||||
11,741,584 | ||||||||
New York 10.2% | ||||||||
City of New York, GO, Multi Modal, Series D-1, 4.00%, 03/01/44 |
375 | 402,600 | ||||||
City of New York Transitional Finance Authority Future Tax Secured Revenue, RB, Fiscal 2012, Sub-Series E-1, 5.00%, 02/01/42 |
770 | 809,016 | ||||||
Counties of Buffalo & Erie New York Industrial Land Development Corp., Refunding RB, The Charter School for Applied Technologies Project, Series A, 5.00%, 06/01/35 |
500 | 531,875 | ||||||
Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A, 6.25%, 06/01/41(b) |
600 | 598,500 | ||||||
County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44 |
270 | 284,488 | ||||||
Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/38 |
750 | 777,975 | ||||||
New York City Housing Development Corp., RB, M/F Housing, Series C-1A, 4.20%, 11/01/44 |
1,500 | 1,553,580 | ||||||
New York Liberty Development Corp., Refunding RB, 3 World Trade Center Project(b): |
||||||||
Class 1, 5.00%, 11/15/44 |
1,365 | 1,258,107 | ||||||
Class 2, 5.15%, 11/15/34 |
105 | 100,647 | ||||||
Class 2, 5.38%, 11/15/40 |
265 | 260,529 | ||||||
New York Transportation Development Corp., ARB, LaGuardia Airport Terminal B Redevelopment Project, Series A, AMT, 5.25%, 01/01/50 |
1,000 | 1,019,500 | ||||||
Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8: |
||||||||
6.00%, 12/01/36 |
410 | 417,355 | ||||||
6.00%, 12/01/42 |
395 | 397,394 |
Security |
Par
(000) |
Value | ||||||
New York (continued) | ||||||||
State of New York Power Authority, RB, Series A, 4.00%, 11/15/60(h) |
$ | 350 | $ | 369,044 | ||||
State of New York Thruway Authority, Refunding RB, Subordinate, Series B, 4.00%, 01/01/45 |
805 | 829,778 | ||||||
|
|
|||||||
9,610,388 | ||||||||
North Carolina 0.8% | ||||||||
North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 03/01/21(a) |
185 | 195,491 | ||||||
North Carolina Turnpike Authority, RB, Senior Lien, Triangle Express Way System (AGM), 4.00%, 01/01/55 |
195 | 199,128 | ||||||
University of North Carolina at Chapel Hill, RB, University of North Carolina Hospital at Chapal Hills, 5.00%, 02/01/45 |
295 | 382,146 | ||||||
|
|
|||||||
776,765 | ||||||||
Ohio 2.0% | ||||||||
Buckeye Tobacco Settlement Financing Authority, Refunding RB, Senior, Class 2, Series B-2, 5.00%, 06/01/55 |
1,125 | 995,265 | ||||||
County of Allen Ohio Hospital Facilities, Refunding RB, Mercy Health, Series A, 4.00%, 11/01/44 |
450 | 454,711 | ||||||
County of Franklin Ohio, RB, OPRS Communities Obligation Group, Series A: |
||||||||
6.13%, 07/01/22(a) |
15 | 16,696 | ||||||
6.13%, 07/01/40 |
195 | 198,171 | ||||||
Ohio Air Quality Development Authority, RB, AMG Vanadium Project, AMT, 5.00%, 07/01/49(b) |
250 | 227,135 | ||||||
|
|
|||||||
1,891,978 | ||||||||
Oklahoma 1.0% | ||||||||
Oklahoma Development Finance Authority, RB, OU Medicine Project, Series B, 5.25%, 08/15/48 |
390 | 401,302 | ||||||
Tulsa County Industrial Authority, Refunding RB, Montereau, Inc. Project, 5.25%, 11/15/45 |
585 | 560,407 | ||||||
|
|
|||||||
961,709 | ||||||||
Oregon 1.0% | ||||||||
County of Clackamas Oregon School District No. 12 North Clackamas, GO, CAB, Series A, 0.00%, 06/15/38(c) |
395 | 199,744 | ||||||
State of Oregon Facilities Authority, RB, Student Housing, CHF-Ashland, Southern Oregon University Project (AGM), 5.00%, 07/01/44 |
715 | 757,814 | ||||||
|
|
|||||||
957,558 | ||||||||
Pennsylvania 2.6% | ||||||||
Allentown Neighborhood Improvement Zone Development Authority, RB, Subordinate, City Center Project(b): |
||||||||
5.00%, 05/01/28 |
90 | 90,625 | ||||||
5.13%, 05/01/32 |
100 | 99,841 | ||||||
5.38%, 05/01/42 |
145 | 138,598 | ||||||
City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 07/01/42 |
200 | 206,986 | ||||||
Pennsylvania Economic Development Financing Authority, RB, AMT, 5.00%, 06/30/42 |
650 | 654,719 | ||||||
Pennsylvania Economic Development Financing Authority, Refunding RB, National Gypsum Co., AMT, 5.50%, 11/01/44 |
480 | 411,897 | ||||||
Pennsylvania Higher Educational Facilities Authority, RB, University of Pennsylvania Health System Obligation, 4.00%, 08/15/44 |
490 | 517,989 | ||||||
Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44 |
345 | 371,396 | ||||||
|
|
|||||||
2,492,051 | ||||||||
Puerto Rico 5.7% | ||||||||
Childrens Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds, 5.63%, 05/15/43 |
395 | 389,115 |
38 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Strategic Municipal Trust (BSD) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Puerto Rico (continued) | ||||||||
Commonwealth of Puerto Rico Aqueduct & Sewer Authority, RB, Senior Lien, Series A: |
||||||||
5.00%, 07/01/33 |
$ | 830 | $ | 788,375 | ||||
5.13%, 07/01/37 |
240 | 226,606 | ||||||
Commonwealth of Puerto Rico Aqueduct & Sewer Authority, Refunding RB, Senior Lien, Series A: |
||||||||
6.00%, 07/01/38 |
245 | 242,971 | ||||||
6.00%, 07/01/44 |
440 | 439,921 | ||||||
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB, Restructured: |
||||||||
Series A-1, 4.75%, 07/01/53 |
528 | 475,638 | ||||||
Series A-1, 5.00%, 07/01/58 |
2,167 | 2,024,021 | ||||||
Series A-2, 4.33%, 07/01/40 |
345 | 308,120 | ||||||
Series A-2, 4.78%, 07/01/58 |
567 | 510,408 | ||||||
|
|
|||||||
5,405,175 | ||||||||
Rhode Island 2.7% | ||||||||
Tobacco Settlement Financing Corp., Refunding RB, Series B: |
||||||||
4.50%, 06/01/45 |
830 | 846,060 | ||||||
5.00%, 06/01/50 |
1,580 | 1,651,195 | ||||||
|
|
|||||||
2,497,255 | ||||||||
South Carolina 3.7% | ||||||||
State of South Carolina Jobs EDA, Refunding RB, Prisma Health Obligated Group, Series A, 5.00%, 05/01/43 |
680 | 734,665 | ||||||
State of South Carolina Ports Authority, ARB, AMT, 5.25%, 07/01/25(a) |
335 | 399,277 | ||||||
State of South Carolina Public Service Authority, RB: |
||||||||
Santee Cooper, Series A, 5.50%, 12/01/54 |
1,235 | 1,303,468 | ||||||
Series E, 5.50%, 12/01/53 |
500 | 525,530 | ||||||
State of South Carolina Public Service Authority, Refunding RB, Series E, 5.25%, 12/01/55 |
540 | 571,752 | ||||||
|
|
|||||||
3,534,692 | ||||||||
Tennessee 0.5% | ||||||||
City of Chattanooga Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 01/01/23(a) |
440 | 487,494 | ||||||
|
|
|||||||
Texas 9.4% | ||||||||
Brazos Higher Education Authority, Inc., RB, Subordinate, Student Loan Program, Series 1B (AMT), 3.00%, 04/01/40 |
175 | 148,082 | ||||||
Central Texas Regional Mobility Authority, Refunding RB: |
||||||||
Senior Lien, 6.25%, 01/01/21(a) |
680 | 704,725 | ||||||
Sub-Lien, 5.00%, 01/01/33 |
115 | 118,123 | ||||||
City of Houston Texas Airport System, Refunding ARB, United Airlines, Inc. Terminal E Project, AMT, 5.00%, 07/01/29 |
135 | 133,615 | ||||||
Clifton Higher Education Finance Corp., RB, Idea Public Schools, 6.00%, 08/15/43 |
230 | 253,941 | ||||||
County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 01/01/23(a) |
145 | 168,051 | ||||||
County of Harris Texas-Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series A (NPFGC) (AGM), 0.00%, 11/15/38(c) |
4,750 | 2,077,317 | ||||||
County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Projects, Series A, 0.00%, 09/15/37(c) |
4,485 | 2,253,219 | ||||||
North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 09/01/31(a)(c) |
640 | 328,864 | ||||||
North Texas Tollway Authority, Refunding RB, 4.25%, 01/01/49 |
565 | 610,980 | ||||||
Texas Private Activity Bond Surface Transportation Corp., RB: |
||||||||
Segment 3C Project, AMT, 5.00%, 06/30/58 |
650 | 672,496 |
SCHEDULES OF INVESTMENTS | 39 |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Strategic Municipal Trust (BSD) (Percentages shown are based on Net Assets) |
Security |
Par
(000) |
Value | ||||||
Illinois 2.3% | ||||||||
State of Illinois Toll Highway Authority, RB, Series C, 5.00%, 01/01/38 |
$ | 1,997 | $ | 2,181,747 | ||||
|
|
|||||||
Iowa 1.2% | ||||||||
Iowa Finance Authority, Refunding RB, UnityPoint Health, Series E, 4.00%, 08/15/46 |
1,125 | 1,151,179 | ||||||
|
|
|||||||
Massachusetts 2.3% | ||||||||
Massachusetts Housing Finance Agency, Refunding RB, Series A, AMT, 4.50%, 12/01/47 |
1,305 | 1,371,384 | ||||||
Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/21(a) |
720 | 764,440 | ||||||
|
|
|||||||
2,135,824 | ||||||||
Michigan 3.7% | ||||||||
Michigan Finance Authority, RB, Multi Model- McLaren Health Care, 4.00%, 02/15/47 |
1,248 | 1,290,344 | ||||||
Michigan State Housing Development Authority, RB, M/F Housing, Series A, 4.15%, 10/01/53 |
2,117 | 2,237,073 | ||||||
|
|
|||||||
3,527,417 | ||||||||
New York 9.1% | ||||||||
City of New York Housing Development Corp., Refunding RB, Sustainable Neighborhood Bonds, Series A, 4.15%, 11/01/38 |
1,460 | 1,560,594 | ||||||
Hudson Yards Infrastructure Corp., RB, Senior-Fiscal 2012(j): |
||||||||
5.75%, 02/15/21(a) |
310 | 320,448 | ||||||
5.75%, 02/15/47 |
190 | 197,130 | ||||||
New York Liberty Development Corp., ARB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43 |
3,375 | 3,539,095 | ||||||
New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51(j) |
2,030 | 2,117,345 | ||||||
Port Authority of New York & New Jersey, Refunding ARB, Series194th, 5.25%, 10/15/55 |
810 | 892,733 | ||||||
|
|
|||||||
8,627,345 | ||||||||
North Carolina 1.8% | ||||||||
North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project, Series B, 5.00%, 10/01/55 |
800 | 912,408 | ||||||
North Carolina Housing Finance Agency, RB, S/F Housing, Series 39-B (Ginnie Mae, Fannie Mae & Freddie Mac), 4.00%, 01/01/48(b)(d) |
717 | 765,327 | ||||||
|
|
|||||||
1,677,735 | ||||||||
Pennsylvania 7.1% | ||||||||
County of Lehigh Pennsylvania, Refunding RB, Lehigh Valley Health Network, 4.00%, 07/01/49(b)(d)(j) |
2,501 | 2,528,291 | ||||||
County of Westmoreland Pennsylvania Municipal Authority, Refunding RB, (BAM), 5.00%, 08/15/38 |
1,034 | 1,178,927 | ||||||
Pennsylvania Turnpike Commission, RB, Sub-Series A, 5.50%, 12/01/42 |
1,379 | 1,550,707 | ||||||
Pennsylvania Turnpike Commission, Refunding RB, Sub Series B-2 (AGM), 5.00%, 06/01/35 |
1,280 | 1,469,530 | ||||||
|
|
|||||||
6,727,455 | ||||||||
Rhode Island 1.8% | ||||||||
Rhode Island Health & Educational Building Corp., RB, Series A, 4.00%, 09/15/47 |
1,532 | 1,676,843 | ||||||
|
|
|||||||
Texas 3.2% | ||||||||
City of San Antonio Texas Electric & Gas Systems Revenue, RB, Junior Lien, 5.00%, 02/01/43 |
780 | 848,585 | ||||||
County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/21(a) |
1,080 | 1,147,533 | ||||||
University of Texas, Refunding RB, Financing System, Series B, 5.00%, 08/15/43 |
975 | 1,051,298 | ||||||
|
|
|||||||
3,047,416 |
(a) |
U.S. Government securities held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par. |
(b) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(c) |
Zero-coupon bond. |
(d) |
Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end. |
(e) |
Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end. |
(f) |
Non-income producing security. |
(g) |
Issuer filed for bankruptcy and/or is in default. |
(h) |
When-issued security. |
(i) |
Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details. |
(j) |
All or a portion of the security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreements, which expire between August 15, 2020 to February 15, 2028, is $6,151,734. See Note 4 of the Notes to Financial Statements for details. |
(k) |
Annualized 7-day yield as of period end. |
40 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (continued) April 30, 2020 |
BlackRock Strategic Municipal Trust (BSD) |
(l) |
Investments in issuers considered to be an affiliate/affiliates of the Trust during the year ended April 30, 2020 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
Affiliated Issuer |
Shares
Held at 04/30/19 |
Shares
Purchased |
Shares
Sold |
Shares
Held at 04/30/20 |
Value at
04/30/20 |
Income |
Net
Realized Gain (Loss) (a) |
Change in
Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||
BlackRock Liquidity Funds, MuniCash, Institutional Class |
| 1,394,020 | (b) | | 1,394,020 | $ | 1,394,299 | $ | 6,194 | $ | 1,413 | $ | | |||||||||||||||||||
|
|
|
|
|
|
|
|
(a) |
Includes net capital gain distributions, if applicable. |
(b) |
Represents net shares purchased (sold). |
Derivative Financial Instruments Categorized by Risk Exposure
For the year ended April 30, 2020, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity
Contracts |
Credit
Contracts |
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate Contracts |
Other
Contracts |
Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | | $ | | $ | (2,008,429 | ) | $ | | $ | (2,008,429 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on: |
|
|||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | | $ | | $ | 42,843 | $ | | $ | 42,843 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments:
Futures contracts: |
||||
Average notional value of contracts short |
$ | 6,223,203 |
For more information about the Trusts investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments. For information about the Trusts policy regarding valuation of investments, refer to the Notes to Financial Statements.
The following tables summarize the Trusts investments categorized in the disclosure hierarchy:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: |
||||||||||||||||
Investments: |
||||||||||||||||
Long-Term Investments(a) |
$ | | $ | 158,930,335 | $ | | $ | 158,930,335 | ||||||||
Short-Term Securities |
1,394,299 | | | 1,394,299 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 1,394,299 | $ | 158,930,335 | $ | | $ | 160,324,634 | |||||||||
|
|
|
|
|
|
|
|
(a) |
See above Schedule of Investments for values in each state or political subdivision. |
The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: |
||||||||||||||||
TOB Trust Certificates |
$ | | $ | (25,654,427 | ) | $ | | $ | (25,654,427 | ) | ||||||
VMTP Shares at Liquidation Value |
| (42,900,000 | ) | | (42,900,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | | $ | (68,554,427 | ) | $ | | $ | (68,554,427 | ) | |||||||
|
|
|
|
|
|
|
|
SCHEDULES OF INVESTMENTS | 41 |
Statements of Assets and Liabilities
April 30, 2020
See notes to financial statements.
42 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Year Ended April 30, 2020
(a) |
Related to TOB Trusts, VRDP Shares and/or VMTP Shares. |
See notes to financial statements.
FINANCIAL STATEMENTS | 43 |
Statements of Changes in Net Assets
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
44 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (continued)
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 45 |
Year Ended April 30, 2020
46 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
(For a share outstanding throughout each period)
BKN | ||||||||||||||||||||
Year Ended April 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Net asset value, beginning of year |
$ | 15.75 | $ | 15.26 | $ | 15.39 | $ | 16.83 | $ | 16.09 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
0.71 | 0.71 | 0.73 | 0.79 | 0.88 | |||||||||||||||
Net realized and unrealized gain (loss) |
(0.88 | ) | 0.46 | 0.02 | (1.12 | ) | 0.77 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
(0.17 | ) | 1.17 | 0.75 | (0.33 | ) | 1.65 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions to Common Shareholders(b) |
||||||||||||||||||||
From net investment income |
(0.69 | ) | (0.68 | ) | (0.73 | ) | (0.85 | ) | (0.91 | ) | ||||||||||
From net realized gain |
| (0.00 | )(c) | (0.15 | ) | (0.26 | ) | | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total distributions to Common Shareholders |
(0.69 | ) | (0.68 | ) | (0.88 | ) | (1.11 | ) | (0.91 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 14.89 | $ | 15.75 | $ | 15.26 | $ | 15.39 | $ | 16.83 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Market price, end of year |
$ | 14.75 | $ | 14.31 | $ | 13.57 | $ | 14.59 | $ | 16.94 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return Applicable to Common Shareholders(d) |
||||||||||||||||||||
Based on net asset value |
(1.16 | )% | 8.45 | % | 5.34 | % | (1.84 | )% | 10.92 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Based on market price |
7.77 | % | 10.81 | % | (1.20 | )% | (7.55 | )% | 15.15 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets Applicable to Common Shareholders |
||||||||||||||||||||
Total expenses |
2.31 | % | 2.53 | % | 2.12 | % | 1.84 | % | 1.46 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly |
2.31 | % | 2.53 | % | 2.11 | % | 1.84 | % | 1.46 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense and fees, and amortization of offering costs(e) |
0.93 | % | 0.94 | % | 0.90 | % | 0.90 | % | 0.89 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income to Common Shareholders |
4.39 | % | 4.64 | % | 4.64 | % | 4.87 | % | 5.48 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets applicable to Common Shareholders, end of year (000) |
$ | 255,884 | $ | 270,707 | $ | 262,198 | $ | 264,551 | $ | 289,003 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
VMTP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 125,900 | $ | 125,900 | $ | 125,900 | $ | 125,900 | $ | 125,900 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Asset coverage per VMTP Shares at $100,000 liquidation value, end of year |
$ | 303,244 | $ | 315,017 | $ | 308,259 | $ | 310,128 | $ | 329,549 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Borrowings outstanding, end of year (000) |
$ | 56,112 | $ | 51,999 | $ | 41,043 | $ | 30,783 | $ | 31,286 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate |
16 | % | 29 | % | 31 | % | 36 | % | 28 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Based on average Common Shares outstanding. |
(b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) |
Amount is greater than $(0.005) per share. |
(d) |
Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
(e) |
Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 47 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BTA | ||||||||||||||||||||
Year Ended April 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Net asset value, beginning of year |
$ | 12.47 | $ | 12.28 | $ | 12.27 | $ | 12.89 | $ | 12.51 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
0.60 | 0.62 | 0.65 | 0.67 | 0.68 | |||||||||||||||
Net realized and unrealized gain (loss) |
(1.26 | ) | 0.20 | 0.01 | (0.63 | ) | 0.40 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
(0.66 | ) | 0.82 | 0.66 | 0.04 | 1.08 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions to Common Shareholders from net investment income(b) |
(0.61 | ) | (0.63 | ) | (0.65 | ) | (0.66 | ) | (0.70 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 11.20 | $ | 12.47 | $ | 12.28 | $ | 12.27 | $ | 12.89 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Market price, end of year |
$ | 10.92 | $ | 11.88 | $ | 11.20 | $ | 11.66 | $ | 12.28 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return Applicable to Common Shareholders(c) |
||||||||||||||||||||
Based on net asset value |
(5.70 | )% | 7.34 | % | 5.76 | % | 0.53 | % | 9.51 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Based on market price |
(3.49 | )% | 12.12 | % | 1.50 | % | 0.28 | % | 14.39 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets Applicable to Common Shareholders |
||||||||||||||||||||
Total expenses |
2.54 | % | 2.67 | % | 2.33 | % | 2.00 | % | 1.59 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly |
2.54 | % | 2.67 | % | 2.33 | % | 2.00 | % | 1.59 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense and fees, and amortization of offering costs(d)(e) |
1.13 | % | 1.13 | % | 1.14 | % | 1.13 | % | 1.11 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income to Common Shareholders |
4.71 | % | 5.11 | % | 5.21 | % | 5.32 | % | 5.45 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets applicable to Common Shareholders, end of year (000) |
$ | 150,344 | $ | 167,431 | $ | 164,787 | $ | 164,745 | $ | 173,050 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
VRDP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 76,000 | $ | 76,000 | $ | 76,000 | $ | 76,000 | $ | 76,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Asset coverage per VRDP Shares at $100,000 liquidation value, end of year |
$ | 297,821 | $ | 320,304 | $ | 316,825 | $ | 316,770 | $ | 327,697 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Borrowings outstanding, end of year (000) |
$ | 36,908 | $ | 34,595 | $ | 36,025 | $ | 32,093 | $ | 25,970 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate |
34 | % | 31 | % | 44 | % | 43 | % | 29 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Based on average Common Shares outstanding. |
(b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) |
Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
(d) |
The total expense ratio after fees waived and/or reimbursed and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees were as follows: |
Year Ended April 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Expense ratios |
1.12 | % | 1.12 | % | 1.47 | % | 1.52 | % | | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(e) |
Interest expense, fees and amortization of offering costs related to TOBs and/or VRDP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
See notes to financial statements.
48 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BFK | ||||||||||||||||||||
Year Ended April 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Net asset value, beginning of year |
$ | 14.17 | $ | 13.98 | $ | 14.24 | $ | 15.20 | $ | 14.91 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
0.67 | 0.68 | 0.73 | 0.81 | 0.87 | |||||||||||||||
Net realized and unrealized gain (loss) |
(1.28 | ) | 0.21 | (0.22 | ) | (0.92 | ) | 0.32 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
(0.61 | ) | 0.89 | 0.51 | (0.11 | ) | 1.19 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions to Common Shareholders from net investment income(b) |
(0.65 | ) | (0.70 | ) | (0.77 | ) | (0.85 | ) | (0.90 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 12.91 | $ | 14.17 | $ | 13.98 | $ | 14.24 | $ | 15.20 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Market price, end of year |
$ | 12.14 | $ | 13.79 | $ | 12.78 | $ | 14.00 | $ | 15.44 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return Applicable to Common Shareholders(c) |
||||||||||||||||||||
Based on net asset value |
(4.51 | )% | 6.98 | % | 3.74 | % | (0.78 | )% | 8.57 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Based on market price |
(7.74 | )% | 13.89 | % | (3.54 | )% | (3.96 | )% | 14.76 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets Applicable to Common Shareholders |
||||||||||||||||||||
Total expenses |
2.30 | % | 2.55 | % | 2.31 | % | 1.99 | % | 1.61 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly |
2.30 | % | 2.55 | % | 2.27 | % | 1.98 | % | 1.61 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense and fees, and amortization of offering costs(d) |
1.02 | % | 1.04 | % | 1.03 | % | 1.06 | % | 1.03 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income to Common Shareholders |
4.68 | % | 4.87 | % | 5.06 | % | 5.45 | % | 5.85 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets applicable to Common Shareholders, end of year (000) |
$ | 578,807 | $ | 635,076 | $ | 626,604 | $ | 638,047 | $ | 680,502 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
VMTP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 270,800 | $ | 270,800 | $ | 270,800 | $ | 270,800 | $ | 270,800 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Asset coverage per VMTP Shares at $100,000 liquidation value, end of year |
$ | 313,740 | $ | 334,518 | $ | 331,390 | $ | 335,616 | $ | 351,293 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Borrowings outstanding, end of year (000) |
$ | 135,464 | $ | 119,624 | $ | 128,156 | $ | 146,562 | $ | 128,554 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate |
17 | % | 19 | % | 9 | % | 13 | % | 7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Based on average Common Shares outstanding. |
(b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) |
Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
(d) |
Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 49 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BSD | ||||||||||||||||||||
Year Ended April 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Net asset value, beginning of year |
$ | 14.15 | $ | 13.96 | $ | 14.21 | $ | 15.04 | $ | 14.76 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
0.66 | 0.68 | 0.72 | 0.78 | 0.82 | |||||||||||||||
Net realized and unrealized gain (loss) |
(1.21 | ) | 0.20 | (0.20 | ) | (0.82 | ) | 0.31 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
(0.55 | ) | 0.88 | 0.52 | (0.04 | ) | 1.13 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions to Common Shareholders from net investment income(b) |
(0.66 | ) | (0.69 | ) | (0.77 | ) | (0.79 | ) | (0.85 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 12.94 | $ | 14.15 | $ | 13.96 | $ | 14.21 | $ | 15.04 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Market price, end of year |
$ | 12.17 | $ | 13.21 | $ | 12.65 | $ | 13.67 | $ | 15.02 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return Applicable to Common Shareholders(c) |
||||||||||||||||||||
Based on net asset value |
(4.10 | )% | 6.99 | % | 3.89 | % | (0.19 | )% | 8.32 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Based on market price |
(3.38 | )% | 10.23 | % | (2.15 | )% | (3.85 | )% | 14.05 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets Applicable to Common Shareholders |
||||||||||||||||||||
Total expenses |
2.60 | % | 2.81 | % | 2.46 | % | 2.08 | % | 1.72 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly |
2.60 | % | 2.81 | % | 2.46 | % | 2.08 | % | 1.72 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense and fees, and amortization of offering costs(d) |
1.21 | % | 1.19 | % | 1.20 | % | 1.15 | % | 1.15 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income to Common Shareholders |
4.61 | % | 4.92 | % | 5.05 | % | 5.28 | % | 5.61 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets applicable to Common Shareholders, end of year (000) |
$ | 94,555 | $ | 103,430 | $ | 101,995 | $ | 103,827 | $ | 109,864 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
VMTP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 42,900 | $ | 42,900 | $ | 42,900 | $ | 42,900 | $ | 42,900 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Asset coverage per VMTP Shares at $100,000 liquidation value, end of year |
$ | 320,407 | $ | 341,094 | $ | 337,750 | $ | 342,022 | $ | 356,093 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Borrowings outstanding, end of year (000) |
$ | 25,654 | $ | 26,839 | $ | 27,378 | $ | 24,984 | $ | 20,839 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate |
33 | % | 28 | % | 34 | % | 45 | % | 11 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Based on average Common Shares outstanding. |
(b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) |
Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
(d) |
Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
See notes to financial statements.
50 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
1. |
ORGANIZATION |
The following are registered under the Investment Company Act of 1940, as amended (the 1940 Act), as closed-end management investment companies and are referred to herein collectively as the Trusts, or individually as a Trust:
Trust Name | Herein Referred To As | Organized |
Diversification
Classification |
|||
BlackRock Investment Quality Municipal Trust, Inc. |
BKN | Maryland | Diversified | |||
BlackRock Long-Term Municipal Advantage Trust |
BTA | Delaware | Diversified* | |||
BlackRock Municipal Income Trust |
BFK | Delaware | Diversified | |||
BlackRock Strategic Municipal Trust |
BSD | Delaware | Diversified |
* |
The Trusts classification changed from non-diversified to diversified during the reporting period. |
The Board of Directors or Trustees, as applicable, of the Trusts are collectively referred to throughout this report as the Board of Trustees or the Board, and the trustees, thereof are collectively referred to throughout this report as Trustees. The Trusts determine and make available for publication the net asset values (NAVs) of their Common Shares on a daily basis.
The Trusts, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the Manager) or its affiliates, are included in a complex of non-index fixed-income mutual funds and all BlackRock-advised closed-end funds referred to as the BlackRock Fixed-Income Complex.
2. |
SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Trust is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income and non-cash dividend income are recorded on the ex-dividend date. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on an accrual basis.
Segregation and Collateralization: In cases where a Trust enters into certain investments (e.g., futures contracts) or certain borrowings (e.g., TOB Trust transactions) that would be treated as senior securities for 1940 Act purposes, a Trust may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments or borrowings. Doing so allows the investment or borrowings to be excluded from treatment as a senior security. Furthermore, if required by an exchange or counterparty agreement, the Trusts may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.
Distributions: Distributions from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.
Distributions to Preferred Shareholders are accrued and determined as described in Note 10.
Deferred Compensation Plan: Under the Deferred Compensation Plan (the Plan) approved by each Trusts Board, the trustees who are not interested persons of the Trusts, as defined in the 1940 Act (Independent Trustees), may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain funds in the BlackRock Fixed-Income Complex selected by the Independent Trustees. This has the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts directly in certain funds in the BlackRock Fixed-Income Complex.
The Plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Trust, as applicable. Deferred compensation liabilities are included in the Trustees and Officers fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Trusts until such amounts are distributed in accordance with the Plan.
Recent Accounting Standards: The Trusts have adopted Financial Accounting Standards Board Accounting Standards Update 2017-08 to amend the amortization period for certain purchased callable debt securities held at a premium. Under the new standard, the Trusts have changed the amortization period for the premium on certain purchased callable debt securities with non-contingent call features to the earliest call date. In accordance with the transition provisions of the standard, the Trusts applied the amendments on a modified retrospective basis beginning with the fiscal period ended April 30, 2020. The adjusted cost basis of securities at April 30, 2019 are as follows:
BKN |
$ | 411,215,379 | ||
BTA |
260,423,250 | |||
BFK |
955,374,421 | |||
BSD |
160,982,606 |
This change in accounting policy has been made to comply with the newly issued accounting standard and had no impact on accumulated earnings (loss) or the NAV of the Trusts.
NOTES TO FINANCIAL STATEMENTS | 51 |
Notes to Financial Statements (continued)
Indemnifications: In the normal course of business, a Trust enters into contracts that contain a variety of representations that provide general indemnification. A Trusts maximum exposure under these arrangements is unknown because it involves future potential claims against a Trust, which cannot be predicted with any certainty.
Other: Expenses directly related to a Trust are charged to that Trust. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.
3. |
INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: The Trusts investments are valued at fair value (also referred to as market value within the financial statements) as of the close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Trusts would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trusts determine the fair values of their financial instruments using various independent dealers or pricing services under policies approved by the Board. If a securitys market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with a policy approved by the Board as reflecting fair value. The BlackRock Global Valuation Methodologies Committee (the Global Valuation Committee) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Trusts assets and liabilities:
|
Municipal investments (including commitments to purchase such investments on a when-issued basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. |
|
Investments in open-end U.S. mutual funds are valued at NAV each business day. |
|
Futures contracts traded on exchanges are valued at their last sale price. |
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (Fair Valued Investments). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Trust might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arms-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.
Fair Value Hierarchy: Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial statement purposes as follows:
|
Level 1 Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Trust has the ability to access |
|
Level 2 Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other marketcorroborated inputs) |
|
Level 3 Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Global Valuation Committees assumptions used in determining the fair value of investments and derivative financial instruments) |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
4. |
SECURITIES AND OTHER INVESTMENTS |
Zero-Coupon Bonds: Zero-coupon bonds are normally issued at a significant discount from face value and do not provide for periodic interest payments. These bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.
Forward Commitments, When-Issued and Delayed Delivery Securities: Certain trusts may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. A trust
52 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, a trust may be required to pay more at settlement than the security is worth. In addition, a trust is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, a trust assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, a trusts maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions.
Municipal Bonds Transferred to TOB Trusts: Certain trusts leverage their assets through the use of TOB Trust transactions. The trusts transfer municipal bonds into a special purpose trust (a TOB Trust). A TOB Trust issues two classes of beneficial interests: short-term floating rate interests (TOB Trust Certificates), which are sold to third party investors, and residual inverse floating rate interests (TOB Residuals), which are issued to the participating trusts that contributed the municipal bonds to the TOB Trust. The TOB Trust Certificates have interest rates that reset weekly and their holders have the option to tender such certificates to the TOB Trust for redemption at par and any accrued interest at each reset date. The TOB Residuals held by a trust provide the trust with the right to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates to the TOB Trust at par plus accrued interest. The trusts may withdraw a corresponding share of the municipal bonds from the TOB Trust. Other trusts managed by the investment adviser may also contribute municipal bonds to a TOB Trust into which a trust has contributed bonds. If multiple BlackRock-advised funds participate in the same TOB Trust, the economic rights and obligations under the TOB Residuals will be shared among the trusts ratably in proportion to their participation in the TOB Trust.
TOB Trusts are supported by a liquidity facility provided by a third party bank or other financial institution (the Liquidity Provider) that allows the holders of the TOB Trust Certificates to tender their certificates in exchange for payment of par plus accrued interest on any business day. The tendered TOB Trust Certificates are remarketed by a Remarketing Agent. In the event of a failed remarketing, the TOB Trust may draw upon a loan from the Liquidity Provider to purchase the tendered TOB Trust Certificates. Any loans made by the Liquidity Provider will be secured by the purchased TOB Trust Certificates held by the TOB Trust and will be subject to an increased interest rate based on number of days the loan is outstanding.
The TOB Trust may be collapsed without the consent of a trust, upon the occurrence of a termination event, as defined in the TOB Trust agreement. Upon the occurrence of a termination event, a TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee of the TOB Trust, the Remarketing Agent and the Liquidity Provider. Upon certain termination events, TOB Trust Certificates holders will be paid before the TOB Residuals holders (i.e., the Trusts) whereas in other termination events, TOB Trust Certificates holders and TOB Residuals holders will be paid pro rata.
While a trusts investment policies and restrictions expressly permit investments in inverse floating rate securities, such as TOB Residuals, they restrict the ability of a trust to borrow money for purposes of making investments. Each trusts transfer of the municipal bonds to a TOB Trust is considered a secured borrowing for financial reporting purposes. The cash received by the TOB Trust from the sale of the TOB Trust Certificates, less certain transaction expenses, is paid to a trust. A trust typically invests the cash received in additional municipal bonds.
Accounting for TOB Trusts: The municipal bonds deposited into a TOB Trust are presented in a trusts Schedules of Investments and the TOB Trust Certificates are shown in Other Liabilities in the Statements of Assets and Liabilities. Any loans drawn by the TOB Trust pursuant to the liquidity facility to purchase tendered TOB Trust Certificates are shown as Loan for TOB Trust Certificates. The carrying amount of a trusts payable to the holder of the TOB Trust Certificates as reported in the Statements of Assets and Liabilities as TOB Trust Certificates approximates its fair value.
Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by a trust on an accrual basis. Interest expense incurred on the TOB Trust transaction and other expenses related to remarketing, administration, trustee, liquidity and other services to a TOB Trust are shown as interest expense, fees and amortization of offering costs in the Statements of Operations. Fees paid upon creation of the TOB Trust are recorded as debt issuance costs and are amortized to interest expense, fees and amortization of offering costs in the Statements of Operations to the expected maturity of the TOB Trust. In connection with the restructurings of the TOB Trusts to non-bank sponsored TOB Trusts, the trusts incurred non-recurring, legal and restructuring fees, which are recorded as interest expense, fees and amortization of deferred offering costs in the Statements of Operations. Amounts recorded within interest expense, fees and amortization of offering costs in the Statements of Operations are:
Interest Expense | Liquidity Fees | Other Expenses | Total | |||||||||||||
BKN |
$ | 806,229 | $ | 231,456 | $ | 76,648 | $ | 1,114,333 | ||||||||
BTA |
533,127 | 159,873 | 48,562 | 741,562 | ||||||||||||
BFK |
1,706,735 | 479,689 | 166,671 | 2,353,095 | ||||||||||||
BSD |
384,601 | 108,637 | 39,482 | 532,720 |
For the year ended April 30, 2020, the following table is a summary of each Trusts TOB Trusts:
Underlying
Municipal Bonds Transferred to TOB Trusts (a) |
Liability for
TOB Trust Certificates (b) |
Range of
Interest Rates on TOB Trust Certificates at Period End |
Average
TOB Trust Certificates Outstanding |
Daily Weighted
Average Rate of Interest and Other Expenses on TOB Trusts |
||||||||||||||||
BKN |
$ | 92,743,919 | $ | 56,112,087 | 0.25% 0.44% | $ | 55,461,252 | 2.01 | % | |||||||||||
BTA |
63,012,034 | 36,907,873 | 0.19% 0.40% | 36,459,468 | 2.03 | |||||||||||||||
BFK |
216,420,496 | 135,463,834 | 0.16% 0.73% | 117,780,251 | 1.99 | |||||||||||||||
BSD |
45,475,500 | 25,654,427 | 0.19% 0.40% | 26,156,330 | 2.04 |
(a) |
The municipal bonds transferred to a TOB Trust are generally high grade municipal bonds. In certain cases, when municipal bonds transferred are lower grade municipal bonds, the TOB Trust transaction may include a credit enhancement feature that provides for the timely payment of principal and interest on the bonds to the TOB Trust by a credit |
NOTES TO FINANCIAL STATEMENTS | 53 |
Notes to Financial Statements (continued)
enhancement provider in the event of default of the municipal bond. The TOB Trust would be responsible for the payment of the credit enhancement fee and the trusts, as TOB Residuals holders, would be responsible for reimbursement of any payments of principal and interest made by the credit enhancement provider. The maximum potential amounts owed by the trusts, for such reimbursements, as applicable, are included in the maximum potential amounts disclosed for recourse TOB Trusts. |
(b) |
TOB Trusts may be structured on a non-recourse or recourse basis. When a Trust invests in TOB Trusts on a non-recourse basis, the Liquidity Provider may be required to make a payment under the liquidity facility to allow the TOB Trust to repurchase TOB Trust Certificates. The Liquidity Provider will be reimbursed from the liquidation of bonds held in the TOB Trust. If a trust invests in a TOB Trust on a recourse basis, a trust enters into a reimbursement agreement with the Liquidity Provider where a trust is required to reimburse the Liquidity Provider for any shortfall between the amount paid by the Liquidity Provider and proceeds received from liquidation of municipal bonds held in the TOB Trust (the Liquidation Shortfall). As a result, if a trust invests in a recourse TOB Trust, the trust will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB Trust, these losses will be shared ratably, including the maximum potential amounts owed by a trust at April 30, 2020, in proportion to their participation in the TOB Trust. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by a trust at April 30, 2020. |
For the year ended April 30, 2020, the following table is a summary of each Trusts Loan for TOB Trust Certificates:
Loans
Outstanding at Period End |
Range of
Interest Rates on Loans at Period End |
Average
Loans Outstanding |
Daily Weighted
Average Rate of Interest and Other Expenses on Loans |
|||||||||||||
BKN |
$ | | | % | 35,211 | 0.69 | % | |||||||||
BTA |
| | 34,774 | 0.71 | ||||||||||||
BFK |
| | 183,314 | 0.70 | ||||||||||||
BSD |
| | 4,440 | 0.71 |
5. |
DERIVATIVE FINANCIAL INSTRUMENTS |
The Trusts engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Trusts and/or to manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or over-the-counter.
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are agreements between the Trusts and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Trusts are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contracts size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.
Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Trusts agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (variation margin). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest, foreign currency exchange rates or underlying assets.
6. |
INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory: Each Trust entered into an Investment Advisory Agreement with the Manager, the Trusts investment adviser and an indirect, wholly-owned subsidiary of BlackRock, Inc. (BlackRock), to provide investment advisory and administrative services. The Manager is responsible for the management of each Trusts portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Trust.
For such services, each Trust, except BTA, pays the Manager a monthly fee at an annual rate equal to the following percentages of the average weekly value of each Trusts managed assets. For such services, BTA pays the Manager a monthly fee at an annual rate equal to a percentage of the average weekly value of the Trusts net assets.
BKN | BTA | BFK | BSD | |||||||||||||
Investment advisory fees |
0.35 | % | 1.00 | % | 0.60 | % | 0.60 | % |
For purposes of calculating these fees, managed assets are determined as total assets of the Trust (including any assets attributable to money borrowed for investment purposes) less the sum of its accrued liabilities (other than money borrowed for investment purposes).
For purposes of calculating this fee, net assets mean the total assets of BTA minus the sum of its accrued liabilities (which includes liabilities represented by TOB Trusts and the liquidation preference of any outstanding preferred shares). It is understood that the liquidation preference of any outstanding preferred shares (other than accumulated dividends) and TOB Trusts is not considered a liability in determining the Trusts NAV.
Administration: BKN has an Administration Agreement with the Manager. The administration fee paid monthly to the Manager is computed at an annual rate of 0.15% of the Trusts average weekly managed assets.
54 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
Waivers: With respect to each Trust, the Manager contractually agreed to waive its investment advisory fees by the amount of investment advisory fees each Trust pays to the Manager indirectly through its investment in affiliated money market funds (the affiliated money market fund waiver) through June 30, 2021. The contractual agreement may be terminated upon 90 days notice by a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of a Trust. Prior to December 1, 2019, this waiver was voluntary. These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended April 30, 2020, the amounts waived were as follows:
BKN | BTA | BFK | BSD | |||||||||||||
Amounts waived |
$ | 1,062 | $ | 715 | $ | 7,436 | $ | 486 |
The Manager contractually agreed to waive its investment advisory fee with respect to any portion of each Trusts assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2021. The agreement can be renewed for annual periods thereafter, and may be terminated on 90 days notice, each subject to approval by a majority of the Trusts Independent Trustees. For the year ended April 30, 2020, there were no fees waived and/or reimbursed by the Manager pursuant to this agreement.
Trustees and Officers: Certain trustees and/or officers of the Trusts are directors and/or officers of BlackRock or its affiliates. The Trusts reimburse the Manager for a portion of the compensation paid to the Trusts Chief Compliance Officer, which is included in Trustees and Officer in the Statements of Operations.
7. |
PURCHASES AND SALES |
For the year ended April 30, 2020, purchases and sales of investments, excluding short-term securities, were as follows:
BKN | BTA | BFK | BSD | |||||||||||||
Purchases |
$ | 71,422,796 | $ | 96,326,329 | $ | 182,919,882 | $ | 57,573,886 | ||||||||
Sales |
75,405,612 | 97,646,793 | 175,508,289 | 62,825,548 |
8. |
INCOME TAX INFORMATION |
It is each Trusts policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Each Trust files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Trusts U.S. federal tax returns generally remains open for each of the four years ended April 30, 2020. The statutes of limitations on each Trusts state and local tax returns may remain open for an additional year depending upon the jurisdiction.
Management has analyzed tax laws and regulations and their application to the Trusts as of April 30, 2020, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Trusts financial statements.
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAVs per share. As of period end, the following permanent differences, attributable to non-deductible expenses, were reclassified to the following accounts:
BKN | BTA | BFK | BSD | |||||||||||||
Paid-in capital |
$ | | $ | (15,246 | ) | $ | | $ | | |||||||
Accumulated earnings (loss) |
| 15,246 | | |
The tax character of distributions paid was as follows:
BKN | BTA | BFK | BSD | |||||||||||||
Tax-exempt income(a) |
||||||||||||||||
4/30/2020 |
$ | 14,558,611 | $ | 9,760,994 | $ | 35,115,253 | $ | 5,783,822 | ||||||||
4/30/2019 |
14,921,159 | 10,243,262 | 38,294,903 | 6,079,943 | ||||||||||||
Ordinary income(b) |
||||||||||||||||
4/30/2020 |
5,740 | 5,750 | 9,315 | 2,581 | ||||||||||||
4/30/2019 |
5,659 | 14,385 | 7,143 | 8,866 | ||||||||||||
Long-term capital gains |
||||||||||||||||
4/30/2020 |
| | | | ||||||||||||
4/30/2019 |
64,261 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
4/30/2020 |
$ | 14,564,351 | $ | 9,766,744 | $ | 35,124,568 | $ | 5,786,403 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
4/30/2019 |
$ | 14,991,079 | $ | 10,257,647 | $ | 38,302,046 | $ | 6,088,809 | ||||||||
|
|
|
|
|
|
|
|
(a) |
The Trusts designate these amounts paid during the fiscal year ended April 30, 2020, as exempt-interest dividends. |
(b) |
Ordinary income consists primarily of taxable income recognized from market discount. Additionally, all ordinary income distributions are comprised of interest-related dividends and are eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations. |
NOTES TO FINANCIAL STATEMENTS | 55 |
Notes to Financial Statements (continued)
As of period end, the tax components of accumulated earnings (losses) were as follows:
BKN | BTA | BFK | BSD | |||||||||||||
Undistributed tax-exempt income |
$ | 1,521,625 | $ | 211,515 | $ | 2,468,018 | $ | 102,149 | ||||||||
Undistributed ordinary income |
360 | 59,619 | 11,358 | 4,516 | ||||||||||||
Non-expiring capital loss carryforwards(a) |
(5,567,479 | ) | (7,394,560 | ) | (23,510,500 | ) | (3,167,920 | ) | ||||||||
Net unrealized gains(b) |
21,202,119 | 1,188,605 | 8,950,229 | 3,371,922 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 17,156,625 | $ | (5,934,821 | ) | $ | (12,080,895 | ) | $ | 310,667 | |||||||
|
|
|
|
|
|
|
|
(a) |
Amounts available to offset future realized capital gains. |
(b) |
The differences between book-basis and tax-basis net unrealized gains were attributable primarily to the tax deferral of losses on wash sales, amortization methods of premiums and discounts on fixed income securities, the accrual of income on securities in default, the treatment of residual interests in tender option bond trusts and the deferral of compensation to Trustees. |
As of April 30, 2020, gross unrealized appreciation and depreciation for investments based on cost for U.S federal income tax purposes were as follows:
BKN | BTA | BFK | BSD | |||||||||||||
Tax cost |
$ | 356,349,673 | $ | 221,728,971 | $ | 823,419,667 | $ | 131,284,107 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross unrealized appreciation |
$ | 29,300,367 | $ | 8,841,346 | $ | 36,992,413 | $ | 6,683,289 | ||||||||
Gross unrealized depreciation |
(8,036,847 | ) | (7,633,479 | ) | (27,833,658 | ) | (3,297,189 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net unrealized appreciation |
$ | 21,263,520 | $ | 1,207,867 | $ | 9,158,755 | $ | 3,386,100 | ||||||||
|
|
|
|
|
|
|
|
9. |
PRINCIPAL RISKS |
Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.
Inventories of municipal bonds held by brokers and dealers may decrease, which would lessen their ability to make a market in these securities. Such a reduction in market making capacity could potentially decrease a Trusts ability to buy or sell bonds. As a result, a Trust may sell a security at a lower price, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative impact on performance. If a Trust needed to sell large blocks of bonds, those sales could further reduce the bonds prices and impact performance.
In the normal course of business, certain Trusts invest in securities or other instruments and may enter into certain transactions, and such activities subject each Trust to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Trusts and their investments.
Each Trust may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Trust to reinvest in lower yielding securities. Each Trust may also be exposed to reinvestment risk, which is the risk that income from each Trusts portfolio will decline if each Trust invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below each Trust portfolios current earnings rate.
The Trusts may hold a significant amount of bonds subject to calls by the issuers at defined dates and prices. When bonds are called by issuers and the Trusts reinvest the proceeds received, such investments may be in securities with lower yields than the bonds originally held, and correspondingly, could adversely impact the yield and total return performance of a Trust.
A Trust structures and sponsors the TOB Trusts in which it holds TOB Residuals and has certain duties and responsibilities, which may give rise to certain additional risks including, but not limited to, compliance, securities law and operational risks.
Should short-term interest rates rise, the Trusts investments in the TOB Trusts may adversely affect the Trusts net investment income and dividends to Common Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Trusts NAVs per share.
The U.S. Securities and Exchange Commission (SEC) and various federal banking and housing agencies have adopted credit risk retention rules for securitizations (the Risk Retention Rules). The Risk Retention Rules would require the sponsor of a TOB Trust to retain at least 5% of the credit risk of the underlying assets supporting the TOB Trusts municipal bonds. The Risk Retention Rules may adversely affect the Trusts ability to engage in TOB Trust transactions or increase the costs of such transactions in certain circumstances.
TOB Trusts constitute an important component of the municipal bond market. Any modifications or changes to rules governing TOB Trusts may adversely impact the municipal market and the Trusts, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. The ultimate impact of any potential modifications on the TOB Trust market and the overall municipal market is not yet certain.
Each Trust may invest without limitation in illiquid or less liquid investments or investments in which no secondary market is readily available or which are otherwise illiquid, including private placement securities. A Trust may not be able to readily dispose of such investments at prices that approximate those at which a Trust could sell such
56 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
investments if they were more widely traded and, as a result of such illiquidity, a Trust may have to sell other investments or engage in borrowing transactions if necessary to raise funds to meet its obligations. Limited liquidity can also affect the market price of investments, thereby adversely affecting a Trusts net asset value and ability to make dividend distributions. Privately issued debt securities are often of below investment grade quality, frequently are unrated and present many of the same risks as investing in below investment grade public debt securities.
An outbreak of respiratory disease caused by a novel coronavirus has developed into a global pandemic and has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this pandemic, and other global health crises that may arise in the future, could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time. This pandemic may result in substantial market volatility and may adversely impact the prices and liquidity of a funds investments. The impact of the pandemic may be short term or may last for an extended period of time.
Counterparty Credit Risk: The Trusts may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Trusts manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Trusts to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Trusts exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Trusts.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Trusts since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Trust does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing brokers customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing brokers customers, potentially resulting in losses to the Trusts.
Concentration Risk: Certain Trusts invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Trusts may be subject to a greater risk of rising interest rates due to the current period of historically low rates.
10. |
CAPITAL SHARE TRANSACTIONS |
BTA, BFK, and BSD are authorized to issue an unlimited number of shares, all of which were initially classified as Common Shares. BKN is authorized to issue 200 million shares, all of which were initially classified as Common Shares. The par value for each Trusts Common Shares is $0.001, except for BKN, which is $0.01. The par value for each Trusts Preferred Shares outstanding is $0.001, except for BKN, which is $0.01. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without the approval of Common Shareholders.
Common Shares
For the periods shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:
Year Ended April 30, | BTA | BSD | ||||||
2020 |
3,780 | 148 | ||||||
2019 |
| |
For the year ended April 30, 2020 and April 30, 2019, shares issued and outstanding remained constant for BKN and BFK.
The Trusts participate in an open market share repurchase program (the Repurchase Program). From December 1, 2018 through November 30, 2019, each Trust may repurchase up to 5% of its outstanding common shares under the Repurchase Program, based on common shares outstanding as of the close of business on November 30, 2018, subject to certain conditions. From December 1, 2019 through November 30, 2020, each Trust may repurchase up to 5% of its outstanding common shares under the Repurchase Program, based on common shares outstanding as of the close of business on November 30, 2019, subject to certain conditions. There is no assurance that the Trusts will purchase shares in any particular amounts. For the year ended April 30, 2020, the Trusts did not repurchase any shares.
Preferred Shares
A Trusts Preferred Shares rank prior to its Common Shares as to the payment of dividends by the Trust and distribution of assets upon dissolution or liquidation of the Trust. The 1940 Act prohibits the declaration of any dividend on Common Shares or the repurchase of Common Shares if the Trust fails to maintain asset coverage of at least 200% of the liquidation preference of the Trusts outstanding Preferred Shares. In addition, pursuant to the Preferred Shares governing instruments, a Trust is restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with its Preferred Shares or repurchasing such shares if the Trust fails to
NOTES TO FINANCIAL STATEMENTS | 57 |
Notes to Financial Statements (continued)
declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares governing instruments or comply with the basic maintenance amount requirement of the ratings agencies rating the Preferred Shares.
Holders of Preferred Shares have voting rights equal to the voting rights of holders of Common Shares (one vote per share) and vote together with holders of Common Shares (one vote per share) as a single class on certain matters. Holders of Preferred Shares, voting as a separate class, are also entitled to (i) elect two members of the Board, (ii) elect the full Board if dividends on the Preferred Shares are not paid for a period of two years and (iii) a separate class vote to amend the Preferred Share governing documents. In addition, the 1940 Act requires the approval of the holders of a majority of any outstanding Preferred Shares, voting as a separate class, to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Trusts sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.
VRDP Shares
BTA (for purposes of this section, a VRDP Trust), has issued Series W-7 VRDP Shares, $100,000 liquidation preference per share, in one or more privately negotiated offerings to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended (the Securities Act). The VRDP Shares include a liquidity feature and may be subject to a special rate period. As of period end, the VRDP Shares outstanding were as follows:
Issue Date |
Shares
Issued |
Aggregate
Principal |
Maturity
Date |
|||||||||||||
BTA |
10/29/15 | 760 | $ | 76,000,000 | 11/01/45 |
Redemption Terms: A VRDP Trust is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date, a VRDP Trust is required to begin to segregate liquid assets with the Trusts custodian to fund the redemption. In addition, a VRDP Trust is required to redeem certain of its outstanding VRDP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, the VRDP Shares may also be redeemed, in whole or in part, at any time at the option of a VRDP Trust. The redemption price per VRDP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends.
Liquidity Feature: VRDP Shares are subject to a fee agreement between the VRDP Trust and the liquidity provider that requires a per annum liquidity fee and, in some cases, an upfront or initial commitment fee, payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations. As of period end, the fee agreement is set to expire, unless renewed or terminated in advance, as follows:
BTA | ||||
Expiration Date . . . . . . . . . . . . . . . . . . . . . . |
04/15/21 |
The VRDP Shares are also subject to a purchase agreement in connection with the liquidity feature. In the event a purchase agreement is not renewed or is terminated in advance, and the VRDP Shares do not become subject to a purchase agreement with an alternate liquidity provider, the VRDP Shares will be subject to mandatory purchase by the liquidity provider prior to the termination of the purchase agreement. In the event of such mandatory purchase, a VRDP Trust is required to redeem the VRDP Shares six months after the purchase date. Immediately after such mandatory purchase, the VRDP Trust is required to begin to segregate liquid assets with its custodian to fund the redemption. There is no assurance that a VRDP Trust will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.
Remarketing: A VRDP Trust may incur remarketing fees on the aggregate principal amount of all its VRDP Shares, which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. During any special rate period (as described below), a VRDP Trust may incur nominal or no remarketing fees.
Ratings: As of period end, the VRDP Shares were assigned the following ratings:
Moodys Long-term Rating |
Fitch Long-term Rating |
|||||||
BTA |
N/A | AAA |
Any short-term ratings on VRDP Shares are directly related to the short-term ratings of the liquidity provider for such VRDP Shares. Changes in the credit quality of the liquidity provider could cause a change in the short-term credit ratings of the VRDP Shares as rated by Moodys and Fitch. The liquidity provider may be terminated prior to the scheduled termination date if the liquidity provider fails to maintain short-term debt ratings in one of the two highest rating categories.
Special Rate Period: A VRDP Trust has commenced a special rate period with respect to its VRDP Shares, during which the VRDP Shares will not be subject to any remarketing and the dividend rate will be based on a predetermined methodology. During a special rate period, short-term ratings on VRDP Shares are withdrawn. BTAs special rate period has commenced on October 29, 2015 and has a current expiration date of April 15, 2021.
Prior to the expiration date, the VRDP Trust and the VRDP Shares holder may mutually agree to extend the special rate period. If a special rate period is not extended, the VRDP Shares will revert to remarketable securities upon the termination of the special rate period and will be remarketed and available for purchase by qualified institutional investors.
During the special rate period: (i) the liquidity and fee agreements remain in effect, (ii) VRDP Shares remain subject to mandatory redemption by the VRDP Trust on the maturity date, (iii) VRDP Shares will not be remarketed or subject to optional or mandatory tender events, (iv) the VRDP Trust is required to comply with the same asset
58 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
coverage, basic maintenance amount and leverage requirements for the VRDP Shares as is required when the VRDP Shares are not in a special rate period, (v) the VRDP Trust will pay dividends monthly based on the sum of an agreed upon reference rate and a percentage per annum based on the long-term ratings assigned to the VRDP Shares and (vi) the VRDP Trust will pay nominal or no fees to the liquidity provider and remarketing agent.
Dividends: Except during the Special Rate Period as described above, dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. A change in the short-term credit rating of the liquidity provider or the VRDP Shares may adversely affect the dividend rate paid on such shares, although the dividend rate paid on the VRDP Shares is not directly based upon either short-term rating. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed.
For the year ended April 30, 2020, the annualized dividend rate for the VRDP Shares was 2.15%.
For the year ended April 30, 2020, VRDP Shares issued and outstanding of BTA remained constant.
VMTP Shares
BKN, BFK and BSD (for purposes of this section, a VMTP Trust) have issued Series W-7 VMTP Shares, $100,000 liquidation preference per share, in one or more privately negotiated offerings to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act. The VMTP Shares are subject to certain restrictions on transfer, and a VMTP Trust may also be required to register its VMTP Shares for sale under the Securities Act under certain circumstances. As of period end, the VMTP Shares outstanding and assigned long-term ratings were as follows:
Issue
Date |
Shares
Issued |
Aggregate
Principal |
Term Redemption Date |
Moodys Rating | Fitch Rating | |||||||||||||||||||
BKN |
12/16/11 | 1,259 | 125,900,000 | 07/02/21 | Aa1 | AAA | ||||||||||||||||||
BFK |
12/16/11 | 2,708 | 270,800,000 | 07/02/21 | Aa1 | AAA | ||||||||||||||||||
BSD |
12/16/11 | 429 | 42,900,000 | 07/02/21 | Aa1 | AAA |
Redemption Terms: A VMTP Trust is required to redeem its VMTP Shares on the term redemption date, unless earlier redeemed or repurchased or unless extended. There is no assurance that a term will be extended further or that any VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP Shares. Six months prior to the term redemption date, a VMTP Trust is required to begin to segregate liquid assets with its custodian to fund the redemption. In addition, a VMTP Trust is required to redeem certain of its outstanding VMTP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, VMTP Shares may be redeemed, in whole or in part, at any time at the option of the VMTP Trust. The redemption price per VMTP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends.
Dividends: Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the Securities Industry and Financial Markets Association Municipal Swap Index or to a percentage of the one-month LIBOR rate, as set forth in the VMTP Shares governing instrument. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by the ratings agencies then rating the VMTP Shares.
The dividend rate on VMTP Shares is subject to a step-up spread if the VMTP Trust fails to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and complying with certain asset coverage and leverage requirements.
For the year ended April 30, 2020, the average annualized dividend rates for the VMTP Shares were as follows:
BKN | BFK | BSD | ||||||||||
Rate |
2.18 | % | 2.18 | % | 2.18 | % |
For the year ended April 30, 2020, VMTP Shares issued and outstanding of each VMTP Trust remained constant.
Offering Costs: BKN, BTA, BFK and BSD incurred costs in connection with the issuance of VRDP and VMTP Shares, which were recorded as a direct deduction from the carrying value of the related debt liability and will be amortized over the life of the VRDP and VMTP Shares with the exception of any upfront fees paid by a VRDP Trust to the liquidity provider which, if any, were amortized over the life of the liquidity agreement. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.
Financial Reporting: The VRDP and VMTP Shares are considered debt of the issuer; therefore, the liquidation preference, which approximates fair value of the VRDP and VMTP Shares, is recorded as a liability in the Statements of Assets and Liabilities net of deferred offering costs. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VRDP and VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP and VMTP Shares are treated as equity for tax purposes. Dividends paid to
NOTES TO FINANCIAL STATEMENTS | 59 |
Notes to Financial Statements (continued)
holders of the VRDP and VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes. Dividends and amortization of deferred offering costs on VRDP and VMTP Shares are included in interest expense, fees and amortization of offering costs in the Statements of Operations:
Dividends Accrued |
Deferred Offering Costs Amortization |
|||||||
BKN |
$ | 2,740,480 | $ | | ||||
BTA |
1,631,280 | 15,246 | ||||||
BFK |
5,894,534 | | ||||||
BSD |
933,809 | |
11. |
SUBSEQUENT EVENTS |
Managements evaluation of the impact of all subsequent events on the Trusts financial statements was completed through the date the financial statements were issued and the following items were noted:
The Trusts declared and paid distributions to Common Shareholders and Preferred Shareholders as follows:
Common Dividend Per
Share |
Preferred Shares (c) | |||||||||||||||||||||||
Paid (a) | Declared (b) | Shares | Series | Declared | ||||||||||||||||||||
BKN |
$ | 0.059000 | $ | 0.063000 | VMTP | W-7 | $ | 114,842 | ||||||||||||||||
BTA |
0.050500 | 0.050500 | VRDP | W-7 | 65,534 | |||||||||||||||||||
BFK |
0.053500 | 0.056500 | VMTP | W-7 | 247,015 | |||||||||||||||||||
BSD |
0.055000 | 0.055000 | VMTP | W-7 | 39,132 |
(a) |
Net investment income dividend paid on June 1, 2020 to Common Shareholders of record on May 15, 2020. |
(b) |
Net investment income dividend declared on June 1, 2020 payable to Common Shareholders of record on June 15, 2020. |
(c) |
Dividends declared for period May 1, 2020 to May 31, 2020. |
On June 16, 2020, the Board of Trustees of BSD and the Board of Trustees of BlackRock Municipal Income Trust II (BLE) each approved the reorganization of BSD with and into BLE. The reorganization is expected to occur in or before the first quarter of 2021 and is subject to the approvals by each Funds shareholders and the satisfaction of customary closing conditions.
60 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors/Trustees of BlackRock Investment Quality Municipal Trust, Inc., BlackRock Long-Term Municipal Advantage Trust, BlackRock Municipal Income Trust, and BlackRock Strategic Municipal Trust:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of BlackRock Investment Quality Municipal Trust, Inc., BlackRock Long-Term Municipal Advantage Trust, BlackRock Municipal Income Trust, and BlackRock Strategic Municipal Trust (the Funds), including the schedules of investments, as of April 30, 2020, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of April 30, 2020, and the results of their operations and their cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on the Funds financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Boston, Massachusetts
June 22, 2020
We have served as the auditor of one or more BlackRock investment companies since 1992.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 61 |
Automatic Dividend Reinvestment Plan
Pursuant to each Trusts Dividend Reinvestment Plan (the Reinvestment Plan), Common Shareholders are automatically enrolled to have all distributions of dividends and capital gains and other distributions reinvested by Computershare Trust Company, N.A. (the Reinvestment Plan Agent) in the respective Trusts Common Shares pursuant to the Reinvestment Plan. Shareholders who do not participate in the Reinvestment 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 name or other nominee name, then to the nominee) by the Reinvestment Plan Agent, which serves as agent for the shareholders in administering the Reinvestment Plan.
After BKN, BTA, BFK and BSD declare a dividend or determine to make a capital gain or other distribution, the Reinvestment Plan Agent will acquire shares for the participants accounts, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Trusts (newly issued shares) or (ii) by purchase of outstanding shares on the open market or on the Trusts primary exchange (open-market purchases). If, on the dividend payment date, the net asset value per share (NAV) is equal to or less than the market price per share plus estimated brokerage commissions (such condition often referred to as a market premium), the Reinvestment Plan Agent will invest the dividend amount in newly issued shares acquired on behalf of the participants. The number of newly issued shares to be credited to each participants account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the dividend payment date, the dollar amount of the dividend will be divided by 95% of the market price on the dividend payment date. If, on the dividend payment date, the NAV is greater than the market price per share plus estimated brokerage commissions (such condition often referred to as a market discount), the Reinvestment Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Reinvestment Plan Agent is unable to invest the full dividend amount in open-market purchases, or if the market discount shifts to a market premium during the purchase period, the Reinvestment Plan Agent will invest any un-invested portion in newly issued shares. Investments in newly issued shares made in this manner would be made pursuant to the same process described above and the date of issue for such newly issued shares will substitute for the dividend payment date.
You may elect not to participate in the Reinvestment Plan and to receive all dividends in cash by contacting the Reinvestment Plan Agent, at the address set forth below.
Participation in the Reinvestment Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Reinvestment Plan Agent prior to the dividend record date. Additionally, the Reinvestment Plan Agent seeks to process notices received after the record date but prior to the payable date and such notices often will become effective by the payable date. Where late notices are not processed by the applicable payable date, such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.
The Reinvestment Plan Agents fees for the handling of the reinvestment of distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Reinvestment Plan Agents open-market purchases in connection with the reinvestment of all distributions. The automatic reinvestment of all distributions will not relieve participants of any U.S. federal, state or local income tax that may be payable on such dividends or distributions.
Each Trust reserves the right to amend or terminate the Reinvestment Plan. There is no direct service charge to participants in the Reinvestment Plan; however, each Trust reserves the right to amend the Reinvestment Plan to include a service charge payable by the participants. Participants that request a sale of shares are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission fee. All correspondence concerning the Reinvestment Plan should be directed to Computershare Trust Company, N.A. through the internet at computershare.com/blackrock, or in writing to Computershare, P.O. Box 505000, Louisville, KY 40233, Telephone: (800) 699-1236. Overnight correspondence should be directed to the Reinvestment Plan Agent at Computershare, 462 South 4th Street, Suite 1600, Louisville, KY 40202.
62 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Trustee and Officer Information
Independent Trustees (a) | ||||||||
Name
Year of Birth (b) |
Position(s) Held
(Length of Service) (c) |
Principal Occupation(s) During Past Five Years |
Number of BlackRock-Advised
Registered Investment Companies (RICs) Consisting of Investment Portfolios (Portfolios) Overseen (d) |
Public Company and
Other Investment Company Directorships Held During Past Five Years |
||||
Richard E. Cavanagh 1946 |
Co-Chair of the Board and Trustee
(Since 2007) |
Director, The Guardian Life Insurance Company of America since 1998; Board Chair, Volunteers of America (a not-for-profit organization) from 2015 to 2018 (board member since 2009); Director, Arch Chemicals (chemical and allied products) from 1999 to 2011; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Faculty Member/Adjunct Lecturer, Harvard University since 2007 and Executive Dean from 1987 to 1995; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007. | 87 RICs consisting of 111 Portfolios | None | ||||
Karen P. Robards 1950 |
Co-Chair of the Board and Trustee
(Since 2007) |
Principal of Robards & Company, LLC (consulting and private investing) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Director of Enable Injections, LLC (medical devices) since 2019; Investment Banker at Morgan Stanley from 1976 to 1987. | 87 RICs consisting of 111 Portfolios |
Greenhill & Co., Inc.; AtriCure, Inc. (medical devices) from 2000 until 2017
|
||||
Michael J. Castellano 1946 |
Trustee
(Since 2011) |
Chief Financial Officer of Lazard Group LLC from 2001 to 2011; Chief Financial Officer of Lazard Ltd from 2004 to 2011; Director, Support Our Aging Religious (non-profit) from 2009 to June 2015 and since 2017; Director, National Advisory Board of Church Management at Villanova University since 2010; Trustee, Domestic Church Media Foundation since 2012; Director, CircleBlack Inc. (financial technology company) since 2015. | 87 RICs consisting of 111 Portfolios | None | ||||
Cynthia L. Egan 1955 |
Trustee
(Since 2016) |
Advisor, U.S. Department of the Treasury from 2014 to 2015; President, Retirement Plan Services, for T. Rowe Price Group, Inc. from 2007 to 2012; executive positions within Fidelity Investments from 1989 to 2007. | 87 RICs consisting of 111 Portfolios |
Unum (insurance); The Hanover Insurance Group (insurance); Envestnet (investment platform) from 2013 until 2016
|
||||
Frank J. Fabozzi (d) 1948 |
Trustee
(Since 2007) |
Editor of The Journal of Portfolio Management since 1986; Professor of Finance, EDHEC Business School (France) since 2011; Visiting Professor, Princeton University for the 2013 to 2014 academic year and Spring 2017 semester; Professor in the Practice of Finance, Yale University School of Management from 1994 to 2011 and currently a Teaching Fellow in Yales Executive Programs; Board Member, BlackRock Equity-Liquidity Funds from 2014 to 2016; affiliated professor Karlsruhe Institute of Technology from 2008 to 2011; Visiting Professor, Rutgers University for the Spring 2019 semester; Visiting Professor, New York University for the 2019 academic year. | 88 RICs consisting of 112 Portfolios | None | ||||
R. Glenn Hubbard 1958 |
Trustee
(Since 2007) |
Dean, Columbia Business School from 2004 to 2019; Faculty member, Columbia Business School since 1988. | 87 RICs consisting of 111 Portfolios | ADP (data and information services); Metropolitan Life Insurance Company (insurance); KKR Financial Corporation (finance) from 2004 until 2014 |
TRUSTEE AND OFFICER INFORMATION | 63 |
Trustee and Officer Information (continued)
Independent Trustees (a) (continued) | ||||||||
Name
Year of Birth (b) |
Position(s) Held
(Length of Service) (c) |
Principal Occupation(s) During Past Five Years |
Number of BlackRock-Advised
Registered Investment Companies (RICs) Consisting of Investment Portfolios (Portfolios) Overseen (d) |
Public Company and
Other Investment Company Directorships Held During Past Five Years |
||||
W. Carl Kester (d) 1951 |
Trustee
(Since 2007) |
George Fisher Baker Jr. Professor of Business Administration, Harvard Business School since 2008; Deputy Dean for Academic Affairs from 2006 to 2010; Chairman of the Finance Unit, from 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program from 1999 to 2005; Member of the faculty of Harvard Business School since 1981. | 88 RICs consisting of 112 Portfolios | None | ||||
Catherine A. Lynch (d) 1961 |
Trustee
(Since 2016) |
Chief Executive Officer, Chief Investment Officer and various other positions, National Railroad Retirement Investment Trust from 2003 to 2016; Associate Vice President for Treasury Management, The George Washington University from 1999 to 2003; Assistant Treasurer, Episcopal Church of America from 1995 to 1999. | 88 RICs consisting of 112 Portfolios | None | ||||
Interested Trustees (a)(e) | ||||||||
Name
Year of Birth (b) |
Position(s) Held
(Length of Service) (c) |
Principal Occupation(s) During Past Five Years |
Number of BlackRock-Advised
Registered Investment Companies (RICs) Consisting of Investment Portfolios (Portfolios) Overseen (d) |
Public Company and Other
Investment Company Directorships Held During Past Five Years |
||||
Robert Fairbairn 1965 |
Trustee
(Since 2018) |
Vice Chairman of BlackRock, Inc. since 2019; Member of BlackRocks Global Executive and Global Operating Committees; Co-Chair of BlackRocks Human Capital Committee; Senior Managing Director of BlackRock, Inc. from 2010 to 2019; oversaw BlackRocks Strategic Partner Program and Strategic Product Management Group from 2012 to 2019; Member of the Board of Managers of BlackRock Investments, LLC from 2011 to 2018; Global Head of BlackRocks Retail and iShares® businesses from 2012 to 2016. | 123 RICs consisting of 261 Portfolios | None | ||||
John M. Perlowski (d) 1964 |
Trustee
(Since 2014); President and Chief Executive Officer (Since 2011) |
Managing Director of BlackRock, Inc. since 2009; Head of BlackRock Global Accounting and Product Services since 2009; Advisory Director of Family Resource Network (charitable foundation) since 2009. | 124 RICs consisting of 262 Portfolios | None | ||||
(a) The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. (b) Each Independent Trustee holds office until his or her successor is duly elected and qualifies or until his or her earlier death, resignation, retirement or removal as provided by the Trusts by-laws or charter or statute, or until December 31 of the year in which he or she turns 75. Trustees who are interested persons, as defined in the Investment Company Act serve until their successor is duly elected and qualifies or until their earlier death, resignation, retirement or removal as provided by the Trusts by-laws or statute, or until December 31 of the year in which they turn 72. The Board may determine to extend the terms of Independent Trustees on a case-by-case basis, as appropriate. (c) Following the combination of Merrill Lynch Investment Managers, L.P. (MLIM) and BlackRock, Inc. in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. Certain Independent Trustees first became members of the boards of other legacy MLIM or legacy BlackRock funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; R. Glenn Hubbard, 2004; W. Carl Kester, 1995; and Karen P. Robards, 1998. (d) Dr. Fabozzi, Dr. Kester, Ms. Lynch and Mr. Perlowski are also trustees of the BlackRock Credit Strategies Fund. (e) Mr. Fairbairn and Mr. Perlowski are both interested persons, as defined in the 1940 Act, of the Trust based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Multi-Asset Complex. |
64 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Trustee and Officer Information (continued)
Officers Who Are Not Trustees (a) | ||||
Name
Year of Birth (b) |
Position(s) Held
(Length of Service) |
Principal Occupation(s) During Past Five Years | ||
Jonathan Diorio 1980 |
Vice President
(Since 2015) |
Managing Director of BlackRock, Inc. since 2015; Director of BlackRock, Inc. from 2011 to 2015. | ||
Neal J. Andrews 1966 |
Chief Financial Officer
(Since 2007) |
Chief Financial Officer of the iShares® exchange traded funds from 2019 to 2020; Managing Director of BlackRock, Inc. since 2006. | ||
Jay M. Fife 1970 |
Treasurer
(Since 2007) |
Managing Director of BlackRock, Inc. since 2007. | ||
Charles Park 1967 |
Chief Compliance Officer
(Since 2014) |
Anti-Money Laundering Compliance Officer for certain BlackRock-advised Funds from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income Complex since 2014; Principal of and Chief Compliance Officer for iShares® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (BFA) since 2006; Chief Compliance Officer for the BFA-advised iShares® exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012. | ||
Janey Ahn 1975 |
Secretary
(Since 2012) |
Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017. | ||
(a) The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. (b) Officers of the Trust serve at the pleasure of the Board. |
Effective February 19, 2020, Henry Gabbay resigned as a Trustee of the Trusts.
Investment Adviser
BlackRock Advisors, LLC
Wilmington, DE 19809
Custodian and Accounting Agent
State Street Bank and Trust Company
Boston, MA 02111
Transfer Agent
Computershare Trust Company, N.A.
Canton, MA 02021
VRDP Liquidity Provider
Bank of America, N.A.
New York, NY 10036
VRDP Remarketing Agent
BofA Securities, Inc.
New York, NY 10036
VRDP Tender and Paying Agent and VMTP Redemption and Paying Agent
The Bank of New York Mellon
New York, NY 10286
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Boston, MA 02116
Legal Counsel
Willkie Farr & Gallagher LLP
New York, NY 10019
Address of the Trusts
100 Bellevue Parkway
Wilmington, DE 19809
TRUSTEE AND OFFICER INFORMATION | 65 |
Trust Certification
The Trusts are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSEs listing standards. The Trusts filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.
Dividend Policy
Each Trusts dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of distributions, the Trusts may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the distributions paid by the Trusts for any particular month may be more or less than the amount of net investment income earned by the Trusts during such month. The Trusts current accumulated but undistributed net investment income, if any, is disclosed as accumulated earnings (loss) in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.
General Information
The Trusts do not make available copies of their Statements of Additional Information because the Trusts shares are not continuously offered, which means that the Statement of Additional Information of each Trust has not been updated after completion of the respective Trusts offerings and the information contained in each Trusts Statement of Additional Information may have become outdated.
Except if noted otherwise herein, there were no material changes in the Trusts investment objectives or policies or to the Trusts charters or by-laws that would delay or prevent a change of control of the Trusts that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. Except if noted otherwise herein, there have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts portfolios.
In accordance with Section 23(c) of the Investment Company Act of 1940, each Trust may from time to time purchase shares of its common stock in the open market or in private transactions.
Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Trusts may be found on BlackRocks website, which can be accessed at blackrock.com. Any reference to BlackRocks website in this report is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRocks website in this report.
Electronic Delivery
Shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual shareholder reports by enrolling in the electronic delivery program. Electronic copies of shareholder reports are available on BlackRocks website.
To enroll in electronic delivery:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment advisers, banks or brokerages may offer this service.
Householding
The Trusts will mail only one copy of shareholder documents, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called householding and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Trusts at (800) 882-0052.
Availability of Quarterly Schedule of Investments
The Trusts file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT, and for reporting periods ended prior to March 31, 2019, filed such information on Form N-Q. The Trusts Forms N-PORT and N-Q are available on the SECs website at sec.gov. The Trusts Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 882-0052; (2) at blackrock.com; and (3) on the SECs website at sec.gov.
Availability of Proxy Voting Record
Information about how the Trusts voted proxies relating to securities held in the Trusts portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at blackrock.com; or by calling (800) 882-0052; and (2) on the SECs website at sec.gov.
66 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Additional Information (continued)
Availability of Trust Updates
BlackRock will update performance and certain other data for the Trusts on a monthly basis on its website in the Closed-end Funds section of blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to check the website for updated performance information and the release of other material information about the Trusts. This reference to BlackRocks website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRocks website in this report.
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, Clients) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
ADDITIONAL INFORMATION | 67 |
Glossary of Terms Used in this Report
Portfolio Abbreviations | ||
AGC | Assured Guarantee Corp. | |
AGM | Assured Guaranty Municipal Corp. | |
AMBAC | American Municipal Bond Assurance Corp. | |
AMT | Alternative Minimum Tax (subject to) | |
ARB | Airport Revenue Bonds | |
BAM | Build America Mutual Assurance Co. | |
BARB | Building Aid Revenue Bonds | |
CAB | Capital Appreciation Bonds | |
COP | Certificates of Participation | |
EDA | Economic Development Authority | |
EDC | Economic Development Corp. | |
FHA | Federal Housing Administration | |
GARB | General Airport Revenue Bonds | |
GO | General Obligation Bonds | |
GTD | Guaranteed | |
HDA | Housing Development Authority | |
HFA | Housing Finance Agency | |
IDA | Industrial Development Authority | |
ISD | Independent School District | |
LRB | Lease Revenue Bonds | |
M/F | Multi-Family | |
NPFGC | National Public Finance Guarantee Corp. | |
PILOT | Payment in Lieu of Taxes | |
PSF-GTD | Permanent School Fund Guaranteed | |
RB | Revenue Bonds | |
S/F | Single-Family | |
SAN | State Aid Notes | |
SRF | State Revolving Fund |
68 | 2020 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Want to know more?
blackrock.com | 800-882-0052
This report is intended for current holders. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Trusts have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in short-term interest rates may reduce the Common Shares yield. Statements and other information herein are as dated and are subject to change.
CEMUNI5-4/20-AR
|
|
Item 3 |
Audit Committee Financial Expert The registrants board of directors (the board of directors), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent: |
Michael Castellano
Frank J. Fabozzi
Catherine A. Lynch
Karen P. Robards
The registrants board of directors has determined that Karen P. Robards qualifies as an audit committee financial expert pursuant to Item 3(c)(4) of Form N-CSR.
Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.
Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an expert for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.
Item 4 |
Principal Accountant Fees and Services |
The following table presents fees billed by Deloitte & Touche LLP (D&T) in each of the last two fiscal years for the services rendered to the Fund:
2
(a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees | |||||||||||||
Entity Name |
Current
Fiscal Year End |
Previous
Fiscal Year End |
Current
Fiscal Year End |
Previous
Fiscal Year End |
Current
Fiscal Year End |
Previous
Fiscal Year End |
Current
Fiscal Year End |
Previous
Fiscal Year End |
||||||||
BlackRock Municipal Income Trust | $36,720 | $37,026 | $0 | $0 | $20,400 | $21,000 | $0 | $0 |
The following table presents fees billed by D&T that were required to be approved by the registrants audit committee (the Committee) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (the Investment Adviser or BlackRock) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (Affiliated Service Providers):
Current Fiscal Year End | Previous Fiscal Year End | |||
(b) Audit-Related Fees1 |
$0 | $0 | ||
(c) Tax Fees2 |
$0 | $0 | ||
(d) All Other Fees3 |
$1,984,000 | $2,050,500 |
1 The nature of the services includes assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees, including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters, out-of-pocket expenses and internal control reviews not required by regulators.
2 The nature of the services includes tax compliance and/or tax preparation, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews, taxable income and tax distribution calculations.
3 Non-audit fees of $1,984,000 and $2,050,500 for the current fiscal year and previous fiscal year, respectively, were paid to the Funds principal accountant in their entirety by BlackRock, in connection with services provided to the Affiliated Service Providers of the Fund and of certain other funds sponsored and advised by BlackRock or its affiliates for a service organization review and an accounting research tool subscription. These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Affiliated Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are (a) consistent with the SECs auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (general pre-approval). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.
Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g.,
3
unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.
(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) The aggregate non-audit fees, defined as the sum of the fees shown under Audit-Related Fees, Tax Fees and All Other Fees, paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Affiliated Service Providers were:
Entity Name |
Current Fiscal
Year End |
Previous Fiscal
Year End |
||||
BlackRock Municipal Income Trust | $20,400 | $21,000 |
Additionally, the amounts billed by D&T in connection with services provided to the Affiliated Service Providers of the Fund and of other funds sponsored or advised by BlackRock or its affiliates during the current and previous fiscal years for a service organization review and an accounting research tool subscription were:
Current Fiscal Year End |
Previous Fiscal Year End |
|
$1,984,000 | $2,050,500 |
These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.
(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser, and the Affiliated Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountants independence.
Item 5 |
Audit Committee of Listed Registrant |
(a) |
The following individuals are members of the registrants separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)): |
Michael Castellano
Frank J. Fabozzi
4
Catherine A. Lynch
Karen P. Robards
(b) |
Not Applicable |
Item 6 |
Investments |
(a) The registrants Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
Item 7 |
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies The board of directors has delegated the voting of proxies for the Funds portfolio securities to the Investment Adviser pursuant to the Investment Advisers proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Funds stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Advisers Equity Investment Policy Oversight Committee, or a sub-committee thereof (the Oversight Committee) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Advisers clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Advisers Portfolio Management Group and/or the Investment Advisers Legal and Compliance Department and concluding that the vote cast is in its clients best interest notwithstanding the conflict. A copy of the Funds Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL, a copy of the Funds Global Corporate Governance & Engagement Principles are attached as Exhibit 99.GLOBAL.CORP.GOV and a copy of the Funds Corporate Governance and Proxy Voting Guidelines for U.S. Securities are attached as Exhibit 99.US.CORP.GOV. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SECs website at http://www.sec.gov. |
Item 8 |
Portfolio Managers of Closed-End Management Investment Companies |
(a)(1) |
As of the date of filing this Report: |
The registrant is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, and Walter OConnor, Managing Director at BlackRock. Each is a member of BlackRocks municipal tax-exempt management group. Each is jointly responsible for the day-to-day management of the registrants portfolio, which includes setting the registrants overall investment strategy, overseeing the management of the registrant and selection of its investments. Messrs. Jaeckel
5
and OConnor have both been members of the registrants portfolio management team since 2006.
Portfolio Manager | Biography | |||
Theodore R. Jaeckel, Jr. |
Managing Director of BlackRock since 2006; Managing Director of Merrill Lynch Investment Managers, L.P. (MLIM) from 2005 to 2006; Director of MLIM from 1997 to 2005. | |||
Walter OConnor |
Managing Director of BlackRock since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003. |
(a)(2) |
As of April 30, 2020: |
(ii) Number of Other Accounts Managed and Assets by Account Type |
(iii) Number of Other Accounts and Assets for Which Advisory Fee is Performance-Based |
|||||||||||
(i) Name of Portfolio Manager |
Other Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
Other Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||
Theodore R. Jaeckel, Jr. |
33 |
0 |
0 |
0 |
0 |
0 |
||||||
$27.52 Billion
|
$0 |
$0 |
$0 |
$0 |
$0 |
|||||||
Walter OConnor |
29 |
0 |
0 |
0 |
0 |
0 |
||||||
$24.74 Billion
|
$0 |
$0 |
$0 |
$0 |
$0 |
(iv) Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, Inc., its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, Inc. or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock, Inc.s (or its affiliates or significant shareholders) officers, directors or employees are directors or officers, or companies as to which BlackRock, Inc. or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. It should also be noted that a
6
portfolio manager may be managing certain hedge fund and/or long only accounts, or may be part of a team managing certain hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the portfolio managers of this fund are not entitled to receive a portion of incentive fees of other accounts.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock, Inc. has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.
(a)(3) As of April 30, 2020:
Portfolio Manager Compensation Overview
The discussion below describes the portfolio managers compensation as of April 30, 2020.
BlackRocks financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.
Base Compensation. Generally, portfolio managers receive base compensation based on their position with the firm.
Discretionary Incentive Compensation
Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio managers group within BlackRock, the investment performance, including risk-adjusted returns, of the firms assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individuals performance and contribution to the overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. Among other things, BlackRocks Chief Investment Officers make a subjective determination with respect to each portfolio managers compensation based on the performance of the Fund and other accounts managed by each portfolio manager relative to the various benchmarks. Performance of fixed income funds is measured on a pre-tax and/or after-tax basis over various time periods including 1-, 3- and 5- year periods, as applicable. With respect to these portfolio managers, such benchmarks for the Fund and other accounts are: a combination of market-based indices (e.g.,
7
Standard & Poors Municipal Bond Index), certain customized indices and certain fund industry peer groups.
Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards that notionally track the return of certain BlackRock investment products.
Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year at risk based on BlackRocks ability to sustain and improve its performance over future periods. In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award to aid in retention, align interests with long-term shareholders and motivate performance. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.
For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage, which provides direct alignment of portfolio manager discretionary incentive compensation with investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Only portfolio managers who manage specified products and whose total compensation is above a specified threshold are eligible to participate in the deferred cash award program.
Other Compensation Benefits. In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:
Incentive Savings Plans BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($285,000 for 2020). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of
8
common stock or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to participate in these plans.
(a)(4) Beneficial Ownership of Securities As of April 30, 2020:
Portfolio Manager |
Dollar Range of Equity Securities
of the Fund Beneficially Owned |
|
Theodore R. Jaeckel, Jr. |
$100,001 - $500,000 | |
Walter OConnor |
None |
(b) Not Applicable
Item 9 |
Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers Not Applicable due to no such purchases during the period covered by this report. |
Item 10 |
Submission of Matters to a Vote of Security Holders There have been no material changes to these procedures. |
Item 11 |
Controls and Procedures |
(a) The registrants principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the 1940 Act)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
(b) There were no changes in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrants internal control over financial reporting.
Item 12 |
Disclosure of Securities Lending Activities for Closed-End Management Investment Companies Not Applicable |
Item 13 |
Exhibits attached hereto |
(a)(1) Code of Ethics See Item 2
(a)(2) Section 302 Certifications are attached
(a)(3) Not Applicable
(a)(4) Not Applicable
(b) Section 906 Certifications are attached
9
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Municipal Income Trust | ||
By: | /s/ John M. Perlowski | |
John M. Perlowski | ||
Chief Executive Officer (principal executive officer) of | ||
BlackRock Municipal Income Trust |
Date: July 2, 2020
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ John M. Perlowski | |
John M. Perlowski | ||
Chief Executive Officer (principal executive officer) of | ||
BlackRock Municipal Income Trust |
Date: July 2, 2020
By: | /s/ Neal J. Andrews | |
Neal J. Andrews | ||
Chief Financial Officer (principal financial officer) of | ||
BlackRock Municipal Income Trust |
Date: July 2, 2020
10
EX-99. CERT
CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, John M. Perlowski, Chief Executive Officer (principal executive officer) of BlackRock Municipal Income Trust, certify that:
1. I have reviewed this report on Form N-CSR of BlackRock Municipal Income Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: July 2, 2020
/s/ John M. Perlowski |
John M. Perlowski |
Chief Executive Officer (principal executive officer) of |
BlackRock Municipal Income Trust |
EX-99. CERT
CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Neal J. Andrews, Chief Financial Officer (principal financial officer) of BlackRock Municipal Income Trust, certify that:
1. I have reviewed this report on Form N-CSR of BlackRock Municipal Income Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: July 2, 2020
/s/ Neal J. Andrews |
Neal J. Andrews |
Chief Financial Officer (principal financial officer) of |
BlackRock Municipal Income Trust |
Exhibit 99.906CERT
Certification Pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. § 1350, the undersigned officer of BlackRock Municipal Income Trust (the Registrant), hereby certifies, to the best of his knowledge, that the Registrants Report on Form N-CSR for the period ended April 30, 2020 (the Report) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: July 2, 2020
/s/ John M. Perlowski |
John M. Perlowski |
Chief Executive Officer (principal executive officer) of |
BlackRock Municipal Income Trust |
Pursuant to 18 U.S.C. § 1350, the undersigned officer of BlackRock Municipal Income Trust (the Registrant), hereby certifies, to the best of his knowledge, that the Registrants Report on Form N-CSR for the period ended April 30, 2020 (the Report) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: July 2, 2020
/s/ Neal J. Andrews |
Neal J. Andrews |
Chief Financial Officer (principal financial officer) of |
BlackRock Municipal Income Trust |
This certification is being furnished pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission.
Closed-End Fund Proxy Voting Policy
September 5, 2019
Closed-End Fund Proxy Voting Policy |
||
Procedures Governing Delegation of Proxy Voting to Fund Adviser
|
Effective Date: September 5, 2019 | ||
Applies to the following types of Funds registered under the 1940 Act: | ||
☐ | Open-End Mutual Funds (including money market funds) | |
☐ | Money Market Funds Only | |
☐ | iShares ETFs | |
☒ | Closed-End Funds | |
☐ | Other | |
The Boards of Trustees/Directors (the Directors) of the closed-end funds advised by BlackRock Advisors, LLC (BlackRock) (the Funds) have the responsibility for the oversight of voting proxies relating to portfolio securities of the Funds, and have determined that it is in the best interests of the Funds and their shareholders to delegate that responsibility to BlackRock as part of BlackRocks authority to manage, acquire and dispose of account assets, all as contemplated by the Funds respective investment management agreements.
BlackRock has adopted guidelines and procedures (together and as from time to time amended, the BlackRock Proxy Voting Guidelines) governing proxy voting by accounts managed by BlackRock. BlackRock will cast votes on behalf of each of the Funds on specific proxy issues in respect of securities held by each such Fund in accordance with the BlackRock Proxy Voting Guidelines; provided, however, that in the case of underlying closed-end funds (including business development companies and other similarly-situated asset pools) held by the Funds that have, or are proposing to adopt, a classified board structure, BlackRock will typically (a) vote in favor of proposals to adopt classification and against proposals to eliminate classification, and (b) not vote against directors as a result of their adoption of a classified board structure.
BlackRock will report on an annual basis to the Directors on (1) a summary of all proxy votes that BlackRock has made on behalf of the Funds in the preceding year together with a representation that all votes were in accordance with the BlackRock Proxy Voting Guidelines (as modified pursuant to the immediately preceding paragraph), and (2) any changes to the BlackRock Proxy Voting Guidelines that have not previously been reported.
Public | ||||
|
Page 1 of 1 |
BlackRock
Investment
Stewardship
Global Corporate Governance &
Engagement Principles
January 2020
If you would like additional information, please contact:
ContactStewardship@blackrock.com
BLACKROCK
BlackRocks purpose is to help more and more people experience financial well-being. As a fiduciary to our clients, we provide the investment and technology solutions they need when planning for their most important goals. We manage assets on behalf of institutional and individual clients, across a full spectrum of investment strategies, asset classes and regions. Our client base includes pension plans, endowments, foundations, charities, official institutions, insurers and other financial institutions, as well as individuals around the world.
Philosophy on corporate governance
BlackRock Investment Stewardship (BIS) activities are focused on maximizing long-term value for our clients. BIS does this through engagement with boards and management of investee companies and, for those clients who have given us authority, through voting at shareholder meetings.
We believe that there are certain fundamental rights attached to shareholding. Companies and their boards should be accountable to shareholders and structured with appropriate checks and balances to ensure that they operate in shareholders best interests. Effective voting rights are central to the rights of ownership and there should be one vote for one share. Shareholders should have the right to elect, remove and nominate directors, approve the appointment of the auditor and to amend the corporate charter or by-laws. Shareholders should be able to vote on matters that are material to the protection of their investment, including but not limited to, changes to the purpose of the business, dilution levels and pre-emptive rights, and the distribution of income and capital structure. In order to make informed decisions, we believe that shareholders have the right to sufficient and timely information.
Our primary focus is on the performance of the board of directors. As the agent of shareholders, the board should set the companys strategic aims within a framework of prudent and effective controls, which enables risk to be assessed and managed. The board should provide direction and leadership to management and oversee managements performance. Our starting position is to be supportive of boards in their oversight efforts on shareholders behalf and we would generally expect to support the items of business they put to a vote at shareholder meetings. Votes cast against or withheld from resolutions proposed by the board are a signal that we are concerned that the directors or management have either not acted in the best interests of shareholders or have not responded adequately to shareholder concerns. We assess voting matters on a case-by-case basis and in light of each companys unique circumstances taking into consideration regional best practices and long-term value creation.
These principles set out our approach to engaging with companies, provide guidance on our position on corporate governance and outline how our views might be reflected in our voting decisions. Corporate governance practices can vary internationally, so our expectations in relation to individual companies are based on the legal and regulatory framework of each local market. However, we believe there are overarching principles of corporate governance that apply globally and provide a framework for more detailed, market-specific assessments.
We believe BlackRock has a responsibility in relation to monitoring and providing feedback to companies, sometimes known as stewardship. These ownership responsibilities include engaging with management or board members on corporate governance matters, voting proxies in the best long-term economic interests of our clients, and engaging with regulatory bodies to ensure a sound policy framework consistent with promoting long-term shareholder value creation. We also believe in the responsibility to our clients to have appropriate resources and oversight structures. Our approach is set out in the section below titled BlackRocks oversight of its investment stewardship activities and is further detailed in a team profile on our website.
3
Corporate governance, engagement and voting
We recognize that accepted standards of corporate governance differ between markets, but we believe there are sufficient common threads globally to identify an overarching set of principles. The objective of our investment stewardship activities is the protection and enhancement of the value of our clients investments in public corporations. Thus, these principles focus on practices and structures that we consider to be supportive of long-term value creation. We discuss below the principles under six key themes. In our regional and market-specific voting guidelines we explain how these principles inform our voting decisions in relation to specific resolutions that may appear on the agenda of a shareholder meeting in the relevant market.
The six key themes are:
● |
Boards and directors |
● |
Auditors and audit-related issues |
● |
Capital structure, mergers, asset sales and other special transactions |
● |
Compensation and benefits |
● |
Environmental and social issues |
● |
General corporate governance matters and shareholder protections |
At a minimum, we expect companies to observe the accepted corporate governance standards in their domestic market or to explain why doing so is not in the interests of shareholders. Where company reporting and disclosure is inadequate or the approach taken is inconsistent with our view of what is in the best interests of shareholders, we will engage with the company and/or use our vote to encourage a change in practice. In making voting decisions, we perform independent research and analysis, such as reviewing relevant information published by the company and apply our voting guidelines to achieve the outcome we believe best protects our clients long-term economic interests. We also work closely with our active portfolio managers, and may take into account internal and external research.
BlackRock views engagement as an important activity; engagement provides us with the opportunity to improve our understanding of the challenges and opportunities that investee companies are facing and their governance structures. Engagement also allows us to share our philosophy and approach to investment and corporate governance with companies to enhance their understanding of our objectives. Our engagements often focus on providing our feedback on company disclosures, particularly where we believe they could be enhanced. There are a range of approaches we may take in engaging companies depending on the nature of the issue under consideration, the company and the market.
BlackRocks engagements emphasize direct dialogue with corporate leadership on the governance issues identified in these principles that have a material impact on financial performance. These engagements enable us to cast informed votes aligned with clients long-term economic interests. We generally prefer to engage in the first instance where we have concerns and give management time to address or resolve the issue. As a long-term investor, we are patient and persistent in working with our portfolio companies to have an open dialogue and develop mutual understanding of governance matters, to promote the adoption of best practices and to assess the merits of a companys approach to its governance. We monitor the companies in which we invest and engage with them constructively and privately where we believe doing so helps protect shareholders interests. We do not try to micro-manage companies, or tell management and boards what to do. We present our views as a long-term shareholder and listen to companies responses. The materiality and immediacy of a given issue will generally determine the level of our engagement and whom we seek to engage at the company, which could be management representatives or board directors.
4
The performance of the board is critical to the economic success of the company and to the protection of shareholders interests. Board members serve as agents of shareholders in overseeing the strategic direction and operation of the company. For this reason, BlackRock focuses on directors in many of our engagements and sees the election of directors as one of our most important responsibilities in the proxy voting context.
We expect the board of directors to promote and protect shareholder interests by:
● |
establishing an appropriate corporate governance structure |
● |
supporting and overseeing management in setting long-term strategic goals, applicable measures of value-creation and milestones that will demonstrate progress, and steps taken if any obstacles are anticipated or incurred |
● |
ensuring the integrity of financial statements |
● |
making independent decisions regarding mergers, acquisitions and disposals |
● |
establishing appropriate executive compensation structures |
● |
addressing business issues, including environmental and social issues, when they have the potential to materially impact company reputation and performance |
There should be clear definitions of the role of the board, the committees of the board and senior management such that the responsibilities of each are well understood and accepted. Companies should report publicly the approach taken to governance (including in relation to board structure) and why this approach is in the best interest of shareholders. We will seek to engage with the appropriate directors where we have concerns about the performance of the board or the company, the broad strategy of the company, or the performance of individual board members. We believe that when a company is not effectively addressing a material issue, its directors should be held accountable.
BlackRock believes that directors should stand for re-election on a regular basis. We assess directors nominated for election or re-election in the context of the composition of the board as a whole. There should be detailed disclosure of the relevant credentials of the individual directors in order for shareholders to assess the caliber of an individual nominee. We expect there to be a sufficient number of independent directors on the board to ensure the protection of the interests of all shareholders. Common impediments to independence may include but are not limited to:
● |
current or former employment at the company or a subsidiary within the past several years |
● |
being, or representing, a shareholder with a substantial shareholding in the company |
● |
interlocking directorships |
● |
having any other interest, business or other relationship which could, or could reasonably be perceived to, materially interfere with the directors ability to act in the best interests of the company |
BlackRock believes that the operation of the board is enhanced when there is a clearly independent, senior non-executive director to chair it or, where the chairman is also the CEO (or is otherwise not independent), an independent lead director. The role of this director is to enhance the effectiveness of the independent members of the board through shaping the agenda, ensuring adequate information is provided to the board and encouraging independent participation in board deliberations. The lead independent board director should be available to shareholders in those situations where a director is best placed to explain and justify a companys approach.
To ensure that the board remains effective, regular reviews of board performance should be carried out and assessments made of gaps in skills or experience amongst the members. BlackRock believes it is beneficial for new directors to be brought onto the board periodically to refresh the groups thinking and to ensure both continuity and adequate succession planning. In identifying potential candidates, boards should take into consideration the multiple dimensions of diversity, including personal factors such as gender, ethnicity, and age; as well as professional characteristics, such as a directors industry, area of expertise, and geographic location. The board should review these dimensions of the current directors and
5
how they might be augmented by incoming directors. We believe that directors are in the best position to assess the optimal size for the board, but we would be concerned if a board seemed too small to have an appropriate balance of directors or too large to be effective.
There are matters for which the board has responsibility that may involve a conflict of interest for executives or for affiliated directors. BlackRock believes that shareholders interests are best served when the board forms committees of fully independent directors to deal with such matters. In many markets, these committees of the board specialize in audit, director nominations and compensation matters. An ad hoc committee might also be formed to decide on a special transaction, particularly one with a related party or to investigate a significant adverse event.
Auditors and audit-related issues
Comprehensive disclosure provides investors with a sense of the companys long-term operational risk management practices and, more broadly, the quality of the boards oversight. In the absence of robust disclosures, we may reasonably conclude that companies are not adequately managing risk.
BlackRock recognizes the critical importance of financial statements, which should provide a true and fair picture of a companys financial condition. We will hold the members of the audit committee or equivalent responsible for overseeing the management of the audit function. We take particular note of cases involving significant financial restatements or ad hoc notifications of material financial weakness.
The integrity of financial statements depends on the auditor being free of any impediments to being an effective check on management. To that end, we believe it is important that auditors are, and are seen to be, independent. Where the audit firm provides services to the company in addition to the audit, the fees earned should be disclosed and explained. Audit committees should have in place a procedure for assessing annually the independence of the auditor.
Capital structure, mergers, asset sales and other special transactions
The capital structure of a company is critical to its owners, the shareholders, as it impacts the value of their investment and the priority of their interest in the company relative to that of other equity or debt investors. Pre-emptive rights are a key protection for shareholders against the dilution of their interests.
Effective voting rights are central to the rights of ownership and we believe strongly in one vote for one share as a guiding principle that supports good corporate governance. Shareholders, as the residual claimants, have the strongest interest in protecting company value, and voting power should match economic exposure.
We are concerned that the creation of a dual share class may result in an over-concentration of power in the hands of a few shareholders, thus disenfranchising other shareholders and amplifying the potential conflict of interest, which the one share, one vote principle is designed to mitigate. However, we recognize that in certain circumstances, companies may have a valid argument for dual-class listings, at least for a limited period of time. We believe that such companies should review these dual-class structures on a regular basis or as company circumstances change. Additionally, they should receive shareholder approval of their capital structure on a periodic basis via a management proposal in the companys proxy. The proposal should give unaffiliated shareholders the opportunity to affirm the current structure or establish mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs to shareholders.
In assessing mergers, asset sales or other special transactions, BlackRocks primary consideration is the long-term economic interests of shareholders. Boards proposing a transaction need to clearly explain the economic and strategic rationale behind it. We will review a proposed transaction to determine the degree to which it enhances long-term shareholder value. We would prefer that proposed transactions have the unanimous support of the board and have been negotiated at arms length. We may seek reassurance from the board that executives and/or board members financial interests in a given transaction have not adversely affected their ability to place shareholders interests before their own. Where the transaction involves related parties, we would expect the recommendation to support it to come from the independent directors and it is good practice to be approved by a separate vote of the non-conflicted shareholders.
BlackRock believes that shareholders have a right to dispose of company shares in the open market without unnecessary restriction. In our view, corporate mechanisms designed to limit shareholders ability to sell their shares are contrary to
6
basic property rights. Such mechanisms can serve to protect and entrench interests other than those of the shareholders. We believe that shareholders are broadly capable of making decisions in their own best interests. We expect any so-called shareholder rights plans proposed by a board to be subject to shareholder approval upon introduction and periodically thereafter for continuation.
BlackRock expects a companys board of directors to put in place a compensation structure that incentivizes and rewards executives appropriately and is aligned with shareholder interests, particularly generating sustainable long-term shareholder returns. We would expect the compensation committee to take into account the specific circumstances of the company and the key individuals the board is trying to incentivize. We encourage companies to ensure that their compensation plans incorporate appropriate and challenging performance conditions consistent with corporate strategy and market practice. We use third party research, in addition to our own analysis, to evaluate existing and proposed compensation structures. We hold members of the compensation committee or equivalent board members accountable for poor compensation practices or structures.
BlackRock believes that there should be a clear link between variable pay and company performance that drives shareholder returns. We are not supportive of one-off or special bonuses unrelated to company or individual performance. We acknowledge that the use of peer group evaluation by compensation committees can help ensure competitive pay; however, we are concerned when increases in total compensation at a company are justified solely on peer benchmarking rather than outperformance. We support incentive plans that foster the sustainable achievement of results relative to competitors. The vesting timeframes associated with incentive plans should facilitate a focus on long-term value creation. We believe consideration should be given to building claw back provisions into incentive plans such that executives would be required to forgo rewards when they are not justified by actual performance. Compensation committees should guard against contractual arrangements that would entitle executives to material compensation for early termination of their contract. Finally, pension contributions and other deferred compensation arrangements should be reasonable in light of market practice.
Non-executive directors should be compensated in a manner that is commensurate with the time and effort expended in fulfilling their professional responsibilities. Additionally, these compensation arrangements should not risk compromising their independence or aligning their interests too closely with those of the management, whom they are charged with overseeing.
Environmental and social issues
Our fiduciary duty to clients is to protect and enhance their economic interest in the companies in which we invest on their behalf. It is within this context that we undertake our corporate governance activities. We believe that well-managed companies will deal effectively with the material environmental and social (E&S) factors relevant to their businesses. Robust disclosure is essential for investors to effectively gauge companies business practices and planning related to E&S risks and opportunities.
BlackRock expects companies to issue reports aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the standards put forward by the Sustainability Accounting Standards Board (SASB). We view the SASB and TCFD frameworks as complementary in achieving the goal of disclosing more financially material information, particularly as it relates to industry-specific metrics and target setting. TCFDs recommendations provide an overarching framework for disclosure on the business implications of climate change, and potentially other E&S factors. We find SASBs industry-specific guidance (as identified in its materiality map) beneficial in helping companies identify and discuss their governance, risk assessments, and performance against these key performance indicators (KPIs). Any global standards adopted, peer group benchmarking undertaken, and verification processes in place should also be disclosed and discussed in this context.
BlackRock has been engaging with companies for several years on disclosure of material E&S factors. Given the increased understanding of sustainability risks and opportunities, and the need for better information to assess them, we specifically ask companies to:
7
1) |
publish a disclosure in line with industry-specific SASB guidelines by year-end, if they have not already done so, or disclose a similar set of data in a way that is relevant to their particular business; and |
2) |
disclose climate-related risks in line with the TCFDs recommendations, if they have not already done so. This should include the companys plan for operating under a scenario where the Paris Agreements goal of limiting global warming to less than two degrees is fully realized, as expressed by the TCFD guidelines. |
See our commentary on our approach to engagement on TCFD and SASB aligned reporting for greater detail of our expectations.
We will use these disclosures and our engagements to ascertain whether companies are properly managing and overseeing these risks within their business and adequately planning for the future. In the absence of robust disclosures, investors, including BlackRock, will increasingly conclude that companies are not adequately managing risk.
We believe that when a company is not effectively addressing a material issue, its directors should be held accountable. We will generally engage directly with the board or management of a company when we identify issues. We may vote against the election of directors where we have concerns that a company might not be dealing with E&S factors appropriately. Sometimes we may reflect such concerns by supporting a shareholder proposal on the issue, where there seems to be either a significant potential threat or realized harm to shareholders interests caused by poor management of material E&S factors.
In deciding our course of action, we will assess the companys disclosures and the nature of our engagement with the company on the issue over time, including whether:
● |
The company has already taken sufficient steps to address the concern |
● |
The company is in the process of actively implementing a response |
● |
There is a clear and material economic disadvantage to the company in the near-term if the issue is not addressed in the manner requested by the shareholder proposal |
We do not see it as our role to make social or political judgments on behalf of clients. Our consideration of these E&S factors is consistent with protecting the long-term economic interest of our clients assets. We expect investee companies to comply, at a minimum, with the laws and regulations of the jurisdictions in which they operate. They should explain how they manage situations where local laws or regulations that significantly impact the companys operations are contradictory or ambiguous to global norms.
Climate risk
Within the framework laid out above, as well as our guidance on How BlackRock Investment Stewardship engages on climate risk, we believe that climate presents significant investment risks and opportunities that may impact the long-term financial sustainability of companies. We believe that the reporting frameworks developed by TCFD and SASB provide useful guidance to companies on identifying, managing, and reporting on climate-related risks and opportunities.
We expect companies to help their investors understand how the company may be impacted by climate risk, in the context of its ability to realize a long-term strategy and generate value over time. We expect companies to convey their governance around this issue through their corporate disclosures aligned with TCFD and SASB. For companies in sectors that are significantly exposed to climate-related risk, we expect the whole board to have demonstrable fluency in how climate risk affects the business and how management approaches assessing, adapting to, and mitigating that risk.
Where a company receives a shareholder proposal related to climate risk, in addition to the factors laid out above, our assessment will take into account the robustness of the companys existing disclosures as well as our understanding of its management of the issues as revealed through our engagements with the company and board members over time. In certain instances, we may disagree with the details of a climate-related shareholder proposal but agree that the company in question has not made sufficient progress on climate-related disclosures. In these instances, we may not support the proposal, but may vote against the election of relevant directors.
8
General corporate governance matters and shareholder protections
BlackRock believes that shareholders have a right to timely and detailed information on the financial performance and viability of the companies in which they invest. In addition, companies should also publish information on the governance structures in place and the rights of shareholders to influence these. The reporting and disclosure provided by companies help shareholders assess whether their economic interests have been protected and the quality of the boards oversight of management. We believe shareholders should have the right to vote on key corporate governance matters, including changes to governance mechanisms, to submit proposals to the shareholders meeting and to call special meetings of shareholders.
BlackRocks oversight of its investment stewardship activities
Oversight
We hold ourselves to a very high standard in our investment stewardship activities, including proxy voting. This function is executed by a team called BlackRock Investment Stewardship (BIS) which is comprised of BlackRock employees who do not have other responsibilities other than their roles in BIS. BIS is considered an investment function. The team does not have sales responsibilities.
BlackRock maintains three regional advisory committees (Stewardship Advisory Committees) for (a) the Americas; (b) Europe, the Middle East and Africa (EMEA); and (c) Asia-Pacific, generally consisting of senior BlackRock investment professionals and/or senior employees with practical boardroom experience. The regional Stewardship Advisory Committees review and advise on amendments to the proxy voting guidelines covering markets within each respective region (Guidelines).
In addition to the regional Stewardship Advisory Committees, the Investment Stewardship Global Oversight Committee (Global Committee) is a risk-focused committee, comprised of senior representatives from various BlackRock investment teams, BlackRocks Deputy General Counsel, the Global Head of Investment Stewardship (Global Head), and other senior executives with relevant experience and team oversight.
The Global Head has primary oversight of the activities of BIS, including voting in accordance with the Guidelines, which require the application of professional judgment and consideration of each companys unique circumstances. The Global Committee reviews and approves amendments to these Global Corporate Governance & Engagement Principles. The Global Committee also reviews and approves amendments to the regional Guidelines, as proposed by the regional Stewardship Advisory Committees.
In addition, the Global Committee receives and reviews periodic reports regarding the votes cast by BIS, as well as regular updates on material process issues, procedural changes and other risk oversight considerations. The Global Committee reviews these reports in an oversight capacity as informed by the BIS corporate governance engagement program and Guidelines.
BIS carries out engagement with companies, monitors and executes proxy votes, and conducts vote operations (including maintaining records of votes cast) in a manner consistent with the relevant Guidelines. BIS also conducts research on corporate governance issues and participates in industry discussions to keep abreast of important developments in the corporate governance field. BIS may utilize third parties for certain of the foregoing activities and performs oversight of those third parties. BIS may raise complicated or particularly controversial matters for internal discussion with the relevant investment teams and/or refer such matters to the appropriate regional Stewardship Advisory Committees for review, discussion and guidance prior to making a voting decision.
9
We carefully consider proxies submitted to funds and other fiduciary account(s) (Fund or Funds) for which we have voting authority. BlackRock votes (or refrains from voting) proxies for each Fund for which we have voting authority based on our evaluation of the best long-term economic interests of shareholders, in the exercise of our independent business judgment, and without regard to the relationship of the issuer of the proxy (or any shareholder proponent or dissident shareholder) to the Fund, the Funds affiliates (if any), BlackRock or BlackRocks affiliates, or BlackRock employees (see Conflicts management policies and procedures, below).
When exercising voting rights, BlackRock will normally vote on specific proxy issues in accordance with the Guidelines for the relevant market. The Guidelines are reviewed regularly and are amended consistent with changes in the local market practice, as developments in corporate governance occur, or as otherwise deemed advisable by BlackRocks Stewardship Advisory Committees. BIS may, in the exercise of their professional judgment, conclude that the Guidelines do not cover the specific matter upon which a proxy vote is required or that an exception to the Guidelines would be in the best long-term economic interests of BlackRocks clients.
In the uncommon circumstance of there being a vote with respect to fixed income securities or the securities of privately held issuers, the decision generally will be made by a Funds portfolio managers and/or BIS based on their assessment of the particular transactions or other matters at issue.
In certain markets, proxy voting involves logistical issues which can affect BlackRocks ability to vote such proxies, as well as the desirability of voting such proxies. These issues include but are not limited to: (i) untimely notice of shareholder meetings; (ii) restrictions on a foreigners ability to exercise votes; (iii) requirements to vote proxies in person; (iv) share-blocking (requirements that investors who exercise their voting rights surrender the right to dispose of their holdings for some specified period in proximity to the shareholder meeting); (v) potential difficulties in translating the proxy; (vi) regulatory constraints; and (vii) requirements to provide local agents with unrestricted powers of attorney to facilitate voting instructions. We are not supportive of impediments to the exercise of voting rights such as shareblocking or overly burdensome administrative requirements.
As a consequence, BlackRock votes proxies on a best-efforts basis. In addition, BIS may determine that it is generally in the best interests of BlackRocks clients not to vote proxies if the costs (including but not limited to opportunity costs associated with shareblocking constraints) associated with exercising a vote are expected to outweigh the benefit the client would derive by voting on the proposal.
Portfolio managers have full discretion to vote the shares in the Funds they manage based on their analysis of the economic impact of a particular ballot item. Portfolio managers may from time to time reach differing views on how best to maximize economic value with respect to a particular investment. Therefore, portfolio managers may, and sometimes do, vote shares in the Funds under their management differently from one another. However, because BlackRocks clients are mostly long-term investors with long-term economic goals, ballots are frequently cast in a uniform manner.
Conflicts management policies and procedures
BIS maintains the following policies and procedures that seek to prevent undue influence on BlackRocks proxy voting activity. Such influence might stem from any relationship between the investee company (or any shareholder proponent or dissident shareholder) and BlackRock, BlackRocks affiliates, a Fund or a Funds affiliates, or BlackRock employees. The following are examples of sources of perceived or potential conflicts of interest:
● |
BlackRock clients who may be issuers of securities or proponents of shareholder resolutions |
● |
BlackRock business partners or third parties who may be issuers of securities or proponents of shareholder resolutions |
● |
BlackRock employees who may sit on the boards of public companies held in Funds managed by BlackRock |
● |
Significant BlackRock, Inc. investors who may be issuers of securities held in Funds managed by BlackRock |
● |
Securities of BlackRock, Inc. or BlackRock investment funds held in Funds managed by BlackRock |
10
● |
BlackRock, Inc. board members who serve as senior executives of public companies held in Funds managed by BlackRock |
BlackRock has taken certain steps to mitigate perceived or potential conflicts including, but not limited to, the following:
● |
Adopted the Guidelines which are designed to protect and enhance the economic value of the companies in which BlackRock invests on behalf of clients. |
● |
Established a reporting structure that separates BIS from employees with sales, vendor management or business partnership roles. In addition, BlackRock seeks to ensure that all engagements with corporate issuers, dissident shareholders or shareholder proponents are managed consistently and without regard to BlackRocks relationship with such parties. Clients or business partners are not given special treatment or differentiated access to BIS. BIS prioritizes engagements based on factors including but not limited to our need for additional information to make a voting decision or our view on the likelihood that an engagement could lead to positive outcome(s) over time for the economic value of the company. Within the normal course of business, BIS may engage directly with BlackRock clients, business partners and/or third parties, and/or with employees with sales, vendor management or business partnership roles, in discussions regarding our approach to stewardship, general corporate governance matters, client reporting needs, and/or to otherwise ensure that proxy-related client service levels are met. |
● |
Determined to engage, in certain instances, an independent fiduciary to vote proxies as a further safeguard to avoid potential conflicts of interest, to satisfy regulatory compliance requirements, or as may be otherwise required by applicable law. In such circumstances, the independent fiduciary provides BlackRocks proxy voting agent with instructions, in accordance with the Guidelines, as to how to vote such proxies, and BlackRocks proxy voting agent votes the proxy in accordance with the independent fiduciarys determination. BlackRock uses an independent fiduciary to vote proxies of (i) any company that is affiliated with BlackRock, Inc., (ii) any public company that includes BlackRock employees on its board of directors, (iii) The PNC Financial Services Group, Inc., (iv) any public company of which a BlackRock, Inc. board member serves as a senior executive, and (v) companies when legal or regulatory requirements compel BlackRock to use an independent fiduciary. In selecting an independent fiduciary, we assess several characteristics, including but not limited to: independence, an ability to analyze proxy issues and vote in the best economic interest of our clients, reputation for reliability and integrity, and operational capacity to accurately deliver the assigned votes in a timely manner. We may engage more than one independent fiduciary, in part in order to mitigate potential or perceived conflicts of interest at an independent fiduciary. The Global Committee appoints and reviews the performance of the independent fiduciar(ies), generally on an annual basis. |
When so authorized, BlackRock acts as a securities lending agent on behalf of Funds. With regard to the relationship between securities lending and proxy voting, BlackRocks approach is driven by our clients economic interests. The decision whether to recall securities on loan to vote is based on a formal analysis of the revenue producing value to clients of loans, against the assessed economic value of casting votes. Generally, we expect that the likely economic value to clients of casting votes would be less than the securities lending income, either because, in our assessment, the resolutions being voted on will not have significant economic consequences or because the outcome would not be affected by BlackRock recalling loaned securities in order to vote. BlackRock also may, in our discretion, determine that the value of voting outweighs the cost of recalling shares, and thus recall shares to vote in that instance.
Periodically, BlackRock reviews our process for determining whether to recall securities on loan in order to vote and may modify it as necessary.
The issue-specific Guidelines published for each region/country in which we vote are intended to summarize BlackRocks general philosophy and approach to issues that may commonly arise in the proxy voting context in each market where we invest. These Guidelines are not intended to be exhaustive. BIS applies the Guidelines on a case-by-case basis, in the context of the individual circumstances of each company and the specific issue under review. As such, these Guidelines do not indicate how BIS will vote in every instance. Rather, they share our view about corporate governance issues generally, and provide insight into how we typically approach issues that commonly arise on corporate ballots.
11
Reporting and vote transparency
We inform clients about our engagement and voting policies and activities through direct communication and through disclosure on our website. Each year we publish an annual report, an annual engagement and voting statistics report, and our full voting record to our website. On a quarterly basis, we publish regional reports which provide an overview of our investment stewardship engagement and voting activities during the quarter, including market developments, speaking engagements, and engagement and voting statistics. Additionally, we make public our market-specific voting guidelines for the benefit of clients and companies with whom we engage.
This document is provided for information purposes only and must not be relied upon as a forecast, research, or investment advice. BlackRock is not making any recommendation or soliciting any action based upon the information contained herein and nothing in this document should be construed as constituting an offer to sell, or a solicitation of any offer to buy, securities in any jurisdiction to any person. This information provided herein does not constitute financial, tax, legal or accounting advice, you should consult your own advisers on such matters.
The information and opinions contained in this document are as of January 2020 unless it is stated otherwise and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Although such information is believed to be reliable for the purposes used herein, BlackRock does not assume any responsibility for the accuracy or completeness of such information. Reliance upon information in this material is at the sole discretion of the reader. Certain information contained herein represents or is based upon forward-looking statements or information. BlackRock and its affiliates believe that such statements and information are based upon reasonable estimates and assumptions. However, forward-looking statements are inherently uncertain, and factors may cause events or results to differ from those projected. Therefore, undue reliance should not be placed on such forward-looking statements and information.
Prepared by BlackRock, Inc.
©2020 BlackRock, Inc. All rights reserved.
12
BlackRock
Investment
Stewardship
Corporate governance and proxy voting
guidelines for U.S. securities
January 2020
Contents
3 | ||||
3 | ||||
3 | ||||
8 | ||||
9 | ||||
10 | ||||
10 | ||||
13 | ||||
14 | ||||
16 |
If you would like additional information, please contact:
ContactStewardship@blackrock.com
BLACKROCK
These guidelines should be read in conjunction with the BlackRock Investment Stewardship Global Corporate Governance Guidelines & Engagement Principles.
BlackRock, Inc. and its subsidiaries (collectively, BlackRock) seek to make proxy voting decisions in the manner most likely to protect and enhance the economic value of the securities held in client accounts. The following issue-specific proxy voting guidelines (the Guidelines) are intended to summarize BlackRock Investment Stewardships general philosophy and approach to corporate governance issues that most commonly arise in proxy voting for U.S. securities. These Guidelines are not intended to limit the analysis of individual issues at specific companies and are not intended to provide a guide to how BlackRock will vote in every instance. Rather, they share our view about corporate governance issues generally, and provide insight into how we typically approach issues that commonly arise on corporate ballots, as well as our expectations of boards of directors. They are applied with discretion, taking into consideration the range of issues and facts specific to the company and the individual ballot item.
These guidelines are divided into eight key themes which group together the issues that frequently appear on the agenda of annual and extraordinary meetings of shareholders:
● |
Boards and directors |
● |
Auditors and audit-related issues |
● |
Capital structure |
● |
Mergers, asset sales, and other special transactions |
● |
Executive compensation |
● |
Environmental and social issues |
● |
General corporate governance matters |
● |
Shareholder protections |
Director elections
In general, BlackRock supports the election of directors as recommended by the board in uncontested elections. However, we believe that when a company is not effectively addressing a material issue, its directors should be held accountable. We may withhold votes from directors or members of particular board committees in certain situations, as indicated below.
Independence
We expect a majority of the directors on the board to be independent. In addition, all members of key committees, including audit, compensation, and nominating / governance committees, should be independent. Our view of independence may vary slightly from listing standards.
In particular, common impediments to independence in the U.S. may include:
● |
Employment as a senior executive by the company or a subsidiary within the past five years |
● |
An equity ownership in the company in excess of 20% |
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 3 |
● |
Having any other interest, business, or relationship which could, or could reasonably be perceived to, materially interfere with the directors ability to act in the best interests of the company |
We may vote against directors serving on key committees that we do not consider to be independent.
When evaluating controlled companies, as defined by the U.S. stock exchanges, we will only vote against insiders or affiliates who sit on the audit committee, but not other key committees.
Oversight
We expect the board to exercise appropriate oversight over management and business activities of the company. We will consider voting against committee members and / or individual directors in the following circumstances:
● |
Where the board has failed to exercise oversight with regard to accounting practices or audit oversight, we will consider voting against the current audit committee, and any other members of the board who may be responsible. For example, this may apply to members of the audit committee during a period when the board failed to facilitate quality, independent auditing if substantial accounting irregularities suggest insufficient oversight by that committee |
● |
Members of the compensation committee during a period in which executive compensation appears excessive relative to performance and peers, and where we believe the compensation committee has not already substantially addressed this issue |
● |
The chair of the nominating / governance committee, or where no chair exists, the nominating / governance committee member with the longest tenure, where the board is not comprised of a majority of independent directors. However, this would not apply in the case of a controlled company |
● |
Where it appears the director has acted (at the company or at other companies) in a manner that compromises his / her reliability to represent the best long-term economic interests of shareholders |
● |
Where a director has a pattern of poor attendance at combined board and applicable key committee meetings. Excluding exigent circumstances, BlackRock generally considers attendance at less than 75% of the combined board and applicable key committee meetings by a board member to be poor attendance |
● |
Where a director serves on an excess number of boards, which may limit his / her capacity to focus on each boards requirements. The following illustrates the maximum number of boards on which a director may serve, before he / she is considered to be over-committed: |
Public Company CEO
|
# Outside Public Boards*
|
Total # of Public Boards
|
||||
Director A |
✓ | 1 | 2 | |||
Director B |
3 | 4 |
*In addition to the company under review
Responsiveness to shareholders
We expect a board to be engaged and responsive to its shareholders. Where we believe a board has not substantially addressed shareholder concerns, we may vote against the appropriate committees and / or individual directors. The following illustrates common circumstances:
● |
The independent chair or lead independent director, members of the nominating / governance committee, and / or the longest tenured director(s), where we observe a lack of board responsiveness to shareholders, evidence of board entrenchment, and / or failure to promote adequate board succession planning |
● |
The chair of the nominating / governance committee, or where no chair exists, the nominating / governance committee member with the longest tenure, where board member(s) at the most recent election of directors have |
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 4 |
received withhold votes from more than 30% of shares voted and the board has not taken appropriate action to respond to shareholder concerns. This may not apply in cases where BlackRock did not support the initial withhold vote |
● |
The independent chair or lead independent director and / or members of the nominating / governance committee, where a board fails to implement shareholder proposals that receive a majority of votes cast at a prior shareholder meeting, and the proposals, in our view, have a direct and substantial impact on shareholders fundamental rights or long-term economic interests |
Shareholder rights
We expect a board to act with integrity and to uphold governance best practices. Where we believe a board has not acted in the best interests of its shareholders, we may vote against the appropriate committees and / or individual directors. The following illustrates common circumstances:
● |
The independent chair or lead independent director and members of the governance committee, where a board implements or renews a poison pill without shareholder approval |
● |
The independent chair or lead independent director and members of the governance committee, where a board amends the charter / articles / bylaws such that the effect may be to entrench directors or to significantly reduce shareholder rights |
● |
Members of the compensation committee where the company has repriced options without shareholder approval |
● |
If a board maintains a classified structure, it is possible that the director(s) with whom we have a particular concern may not be subject to election in the year that the concern arises. In such situations, if we have a concern regarding a committee or committee chair that is not up for re-election, we will generally register our concern by withholding votes from all available members of the relevant committee |
Board composition and effectiveness
We encourage boards to periodically renew their membership to ensure relevant skills and experience within the boardroom. To this end, regular performance reviews and skills assessments should be conducted by the nominating / governance committee.
Furthermore, we expect boards to be comprised of a diverse selection of individuals who bring their personal and professional experiences to bear in order to create a constructive debate of competing views and opinions in the boardroom. We recognize that diversity has multiple dimensions. In identifying potential candidates, boards should take into consideration the full breadth of diversity including personal factors, such as gender, ethnicity, and age; as well as professional characteristics, such as a directors industry, area of expertise, and geographic location. In addition to other elements of diversity, we encourage companies to have at least two women directors on their board. Our publicly available commentary explains our approach to engaging on board diversity.
We encourage boards to disclose their views on:
● |
The mix of competencies, experience, and other qualities required to effectively oversee and guide management in light of the stated long-term strategy of the company |
● |
The process by which candidates are identified and selected, including whether professional firms or other sources outside of incumbent directors networks have been engaged to identify and / or assess candidates |
● |
The process by which boards evaluate themselves and any significant outcomes of the evaluation process, without divulging inappropriate and / or sensitive details |
● |
The consideration given to board diversity, including, but not limited to, gender, ethnicity, race, age, experience, geographic location, skills, and perspective in the nomination process |
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 5 |
While we support regular board refreshment, we are not opposed in principle to long-tenured directors, nor do we believe that long board tenure is necessarily an impediment to director independence. A variety of director tenures within the boardroom can be beneficial to ensure board quality and continuity of experience.
Our primary concern is that board members are able to contribute effectively as corporate strategy evolves and business conditions change, and that all directors, regardless of tenure, demonstrate appropriate responsiveness to shareholders. We acknowledge that no single person can be expected to bring all relevant skill sets to a board; at the same time, we generally do not believe it is necessary or appropriate to have any particular director on the board solely by virtue of a singular background or specific area of expertise.
Where boards find that age limits or term limits are the most efficient and objective mechanism for ensuring periodic board refreshment, we generally defer to the boards determination in setting such limits.
To the extent that we believe that a company has not adequately accounted for diversity in its board composition within a reasonable timeframe, we may vote against the nominating / governance committee for an apparent lack of commitment to board effectiveness.
Board size
We typically defer to the board in setting the appropriate size and believe directors are generally in the best position to assess the optimal board size to ensure effectiveness. However, we may oppose boards that appear too small to allow for effective shareholder representation or too large to function efficiently.
CEO and management succession planning
There should be a robust CEO and senior management succession plan in place at the board level that is reviewed and updated on a regular basis. We expect succession planning to cover both long-term planning consistent with the strategic direction of the company and identified leadership needs over time, as well as short-term planning in the event of an unanticipated executive departure. We encourage the company to explain its executive succession planning process, including where accountability lies within the boardroom for this task, without prematurely divulging sensitive information commonly associated with this exercise.
Classified board of directors / staggered terms
We believe that directors should be re-elected annually and that classification of the board generally limits shareholders rights to regularly evaluate a boards performance and select directors. While we will typically support proposals requesting board de-classification, we may make exceptions, should the board articulate an appropriate strategic rationale for a classified board structure, such as when a company needs consistency and stability during a time of transition, e.g. newly public companies or companies undergoing a strategic restructuring. A classified board structure may also be justified at non-operating companies, e.g. closed-end funds or business development companies (BDC)1, in certain circumstances. We would, however, expect boards with a classified structure to periodically review the rationale for such structure and consider when annual elections might be appropriate.
Without a voting mechanism to immediately address concerns of a specific director, we may choose to vote against or withhold votes from the available slate of directors by default (see Shareholder rights for additional detail).
Contested director elections
The details of contested elections, or proxy contests, are assessed on a case-by-case basis. We evaluate a number of factors, which may include: the qualifications of the dissident and management candidates; the validity of the concerns identified by the dissident; the viability of both the dissidents and managements plans; the likelihood that the dissidents
1A business development company (BDC) is a special investment vehicle under the Investment Company Act of 1940 that is designed to facilitate capital formation for small and middle-market companies.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 6 |
solutions will produce the desired change; and whether the dissident represents the best option for enhancing long-term shareholder value.
Cumulative voting
We believe that a majority vote standard is in the best long-term interest of shareholders. It ensures director accountability via the requirement to be elected by more than half of the votes cast. As such, we will generally oppose proposals requesting the adoption of cumulative voting, which may disproportionately aggregate votes on certain issues or director candidates.
Director compensation and equity programs
We believe that compensation for directors should be structured to attract and retain the best possible directors, while also aligning their interests with those of shareholders. We believe director compensation packages that are based on the companys long-term value creation and include some form of long-term equity compensation are more likely to meet this goal. In addition, we expect directors to build meaningful share ownership over time.
Majority vote requirements
BlackRock believes that directors should generally be elected by a majority of the shares voted and will normally support proposals seeking to introduce bylaws requiring a majority vote standard for director elections. Majority voting standards assist in ensuring that directors who are not broadly supported by shareholders are not elected to serve as their representatives. Some companies with a plurality voting standard have adopted a resignation policy for directors who do not receive support from at least a majority of votes cast. Where we believe that the company already has a sufficiently robust majority voting process in place, we may not support a shareholder proposal seeking an alternative mechanism.
Risk oversight
Companies should have an established process for identifying, monitoring, and managing key risks. Independent directors should have ready access to relevant management information and outside advice, as appropriate, to ensure they can properly oversee risk management. We encourage companies to provide transparency around risk measurement, mitigation, and reporting to the board. We are particularly interested in understanding how risk oversight processes evolve in response to changes in corporate strategy and / or shifts in the business and related risk environment. Comprehensive disclosure provides investors with a sense of the companys long-term operational risk management practices and, more broadly, the quality of the boards oversight. In the absence of robust disclosures, we may reasonably conclude that companies are not adequately managing risk.
Separation of chairman and CEO
We believe that independent leadership is important in the boardroom. In the U.S. there are two commonly accepted structures for independent board leadership: 1) an independent chairman; or 2) a lead independent director when the roles of chairman and CEO are combined.
In the absence of a significant governance concern, we defer to boards to designate the most appropriate leadership structure to ensure adequate balance and independence.
In the event that the board chooses a combined chair / CEO model, we generally support the designation of a lead independent director if they have the power to: 1) provide formal input into board meeting agendas; 2) call meetings of the independent directors; and 3) preside at meetings of independent directors. Furthermore, while we anticipate that most directors will be elected annually, we believe an element of continuity is important for this role for an extended period of time to provide appropriate leadership balance to the chair / CEO.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 7 |
The following table illustrates examples of responsibilities under each board leadership model:
Combined Chair / CEO Model | Separate Chair Model | |||||
Chair / CEO | Lead Director | Chair | ||||
Board Meetings | Authority to call full meetings of the board of directors |
Attends full meetings of the board of directors
Authority to call meetings of independent directors
Briefs CEO on issues arising from executive sessions |
Authority to call full meetings of the board of directors | |||
Agenda | Primary responsibility for shaping board agendas, consulting with the lead director | Collaborates with chair / CEO to set board agenda and board information | Primary responsibility for shaping board agendas, in conjunction with CEO | |||
Board Communications | Communicates with all directors on key issues and concerns outside of full board meetings | Facilitates discussion among independent directors on key issues and concerns outside of full board meetings, including contributing to the oversight of CEO and management succession planning | Facilitates discussion among independent directors on key issues and concerns outside of full board meetings, including contributing to the oversight of CEO and management succession planning |
Auditors and audit-related issues
BlackRock recognizes the critical importance of financial statements to provide a complete and accurate portrayal of a companys financial condition. Consistent with our approach to voting on boards of directors, we seek to hold the audit committee of the board responsible for overseeing the management of the audit function at a company, and may withhold votes from the audit committee members where the board has failed to facilitate quality, independent auditing. We look to the audit committee report for insight into the scope of the audit committee responsibilities, including an overview of audit committee processes, issues on the audit committee agenda, and key decisions taken by the audit committee. We take particular note of cases involving significant financial restatements or material weakness disclosures, and we expect timely disclosure and remediation of accounting irregularities.
The integrity of financial statements depends on the auditor effectively fulfilling its role. To that end, we favor an independent auditor. In addition, to the extent that an auditor fails to reasonably identify and address issues that eventually lead to a significant financial restatement, or the audit firm has violated standards of practice that protect the interests of shareholders, we may also vote against ratification.
From time to time, shareholder proposals may be presented to promote auditor independence or the rotation of audit firms. We may support these proposals when they are consistent with our views as described above.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 8 |
Equal voting rights
BlackRock believes that shareholders should be entitled to voting rights in proportion to their economic interests. We believe that companies that look to add or already have dual or multiple class share structures should review these structures on a regular basis or as company circumstances change. Companies should receive shareholder approval of their capital structure on a periodic basis via a management proposal on the companys proxy. The proposal should give unaffiliated shareholders the opportunity to affirm the current structure or establish mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs to shareholders.
Blank check preferred stock
We frequently oppose proposals requesting authorization of a class of preferred stock with unspecified voting, conversion, dividend distribution, and other rights (blank check preferred stock) because they may serve as a transfer of authority from shareholders to the board and as a possible entrenchment device. We generally view the boards discretion to establish voting rights on a when-issued basis as a potential anti-takeover device, as it affords the board the ability to place a block of stock with an investor sympathetic to management, thereby foiling a takeover bid without a shareholder vote.
Nonetheless, we may support the proposal where the company:
● |
Appears to have a legitimate financing motive for requesting blank check authority |
● |
Has committed publicly that blank check preferred shares will not be used for anti-takeover purposes |
● |
Has a history of using blank check preferred stock for financings |
● |
Has blank check preferred stock previously outstanding such that an increase would not necessarily provide further anti-takeover protection but may provide greater financing flexibility |
Increase in authorized common shares
BlackRock considers industry-specific norms in our analysis of these proposals, as well as a companys history with respect to the use of its common shares. Generally, we are predisposed to support a company if the board believes additional common shares are necessary to carry out the firms business. The most substantial concern we might have with an increase is the possibility of use of common shares to fund a poison pill plan that is not in the economic interests of shareholders.
Increase or issuance of preferred stock
We generally support proposals to increase or issue preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock where the terms of the preferred stock appear reasonable.
Stock splits
We generally support stock splits that are not likely to negatively affect the ability to trade shares or the economic value of a share. We generally support reverse stock splits that are designed to avoid delisting or to facilitate trading in the stock, where the reverse split will not have a negative impact on share value (e.g. one class is reduced while others remain at pre-split levels). In the event of a proposal for a reverse split that would not also proportionately reduce the companys authorized stock, we apply the same analysis we would use for a proposal to increase authorized stock.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 9 |
Mergers, asset sales, and other special transactions
BlackRocks primary concern is the best long-term economic interests of shareholders. While merger, asset sales, and other special transaction proposals vary widely in scope and substance, we closely examine certain salient features in our analyses, such as:
● |
The degree to which the proposed transaction represents a premium to the companys trading price. We consider the share price over multiple time periods prior to the date of the merger announcement. In most cases, business combinations should provide a premium. We may consider comparable transaction analyses provided by the parties financial advisors and our own valuation assessments. For companies facing insolvency or bankruptcy, a premium may not apply |
● |
There should be clear strategic, operational, and / or financial rationale for the combination |
● |
Unanimous board approval and arms-length negotiations are preferred. We will consider whether the transaction involves a dissenting board or does not appear to be the result of an arms-length bidding process. We may also consider whether executive and / or board members financial interests in a given transaction appear likely to affect their ability to place shareholders interests before their own |
● |
We prefer transaction proposals that include the fairness opinion of a reputable financial advisor assessing the value of the transaction to shareholders in comparison to recent similar transactions |
Poison pill plans
Where a poison pill is put to a shareholder vote by management, our policy is to examine these plans individually. Although we oppose most plans, we may support plans that include a reasonable qualifying offer clause. Such clauses typically require shareholder ratification of the pill and stipulate a sunset provision whereby the pill expires unless it is renewed. These clauses also tend to specify that an all cash bid for all shares that includes a fairness opinion and evidence of financing does not trigger the pill, but forces either a special meeting at which the offer is put to a shareholder vote, or the board to seek the written consent of shareholders where shareholders could rescind the pill at their discretion. We may also support a pill where it is the only effective method for protecting tax or other economic benefits that may be associated with limiting the ownership changes of individual shareholders.
We generally vote in favor of shareholder proposals to rescind poison pills.
Reimbursement of expenses for successful shareholder campaigns
We generally do not support shareholder proposals seeking the reimbursement of proxy contest expenses, even in situations where we support the shareholder campaign. We believe that introducing the possibility of such reimbursement may incentivize disruptive and unnecessary shareholder campaigns.
We note that there are both management and shareholder proposals related to executive compensation. We generally vote on these proposals as described below, except that we typically oppose shareholder proposals on issues where the company already has a reasonable policy in place that we believe is sufficient to address the issue. We may also oppose a shareholder proposal regarding executive compensation if the companys history suggests that the issue raised is not likely to present a problem for that company.
Advisory resolutions on executive compensation (Say on Pay)
In cases where there is a Say on Pay vote, BlackRock will respond to the proposal as informed by our evaluation of compensation practices at that particular company and in a manner that appropriately addresses the specific question
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 10 |
posed to shareholders. In a commentary on our website, entitled BlackRock Investment Stewardships approach to executive compensation, we explain our beliefs and expectations related to executive compensation practices, our Say on Pay analysis framework, and our typical approach to engagement and voting on Say on Pay.
Advisory votes on the frequency of Say on Pay resolutions
BlackRock will generally support triennial pay frequency votes, but we defer to the board to determine the appropriate timeframe upon which pay should be reviewed. In evaluating pay, we believe that the compensation committee is responsible for constructing a plan that appropriately incentivizes executives for long-term value creation, utilizing relevant metrics and structure to ensure overall pay and performance alignment. In a similar vein, we defer to the board to establish the most appropriate timeframe for review of pay structure, absent a change in strategy that would suggest otherwise.
However, we may support an annual pay frequency vote in some situations, for example, where we conclude that a company has failed to align pay with performance. In these circumstances, we will also consider voting against the compensation committee members.
Claw back proposals
We generally favor recoupment from any senior executive whose compensation was based on faulty financial reporting or deceptive business practices. In addition to fraudulent acts, we also favor recoupment from any senior executive whose behavior caused direct financial harm to shareholders, reputational risk to the company, or resulted in a criminal investigation, even if such actions did not ultimately result in a material restatement of past results. This includes, but is not limited to, settlement agreements arising from such behavior and paid for directly by the company. We typically support shareholder proposals on these matters unless the company already has a robust claw back policy that sufficiently addresses our concerns.
Employee stock purchase plans
We believe these plans can provide performance incentives and help align employees interests with those of shareholders. The most common form of employee stock purchase plan (ESPP) qualifies for favorable tax treatment under Section 423 of the Internal Revenue Code. We will typically support qualified ESPP proposals.
Equity compensation plans
BlackRock supports equity plans that align the economic interests of directors, managers, and other employees with those of shareholders. We believe that boards should establish policies prohibiting the use of equity awards in a manner that could disrupt the intended alignment with shareholder interests (e.g. the use of stock as collateral for a loan; the use of stock in a margin account; the use of stock [or an unvested award] in hedging or derivative transactions). We may support shareholder proposals requesting the establishment of such policies.
Our evaluation of equity compensation plans is based on a companys executive pay and performance relative to peers and whether the plan plays a significant role in a pay-for-performance disconnect. We generally oppose plans that contain evergreen provisions, which allow for the unlimited increase of shares reserved without requiring further shareholder approval after a reasonable time period. We also generally oppose plans that allow for repricing without shareholder approval. We may also oppose plans that provide for the acceleration of vesting of equity awards even in situations where an actual change of control may not occur. We encourage companies to structure their change of control provisions to require the termination of the covered employee before acceleration or special payments are triggered.
Golden parachutes
We generally view golden parachutes as encouragement to management to consider transactions that might be beneficial to shareholders. However, a large potential pay-out under a golden parachute arrangement also presents the risk of motivating a management team to support a sub-optimal sale price for a company.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 11 |
When determining whether to support or oppose an advisory vote on a golden parachute plan, we normally support the plan unless it appears to result in payments that are excessive or detrimental to shareholders. In evaluating golden parachute plans, BlackRock may consider several factors, including:
● |
Whether we believe that the triggering event is in the best interest of shareholders |
● |
Whether management attempted to maximize shareholder value in the triggering event |
● |
The percentage of total premium or transaction value that will be transferred to the management team, rather than shareholders, as a result of the golden parachute payment |
● |
Whether excessively large excise tax gross-up payments are part of the pay-out |
● |
Whether the pay package that serves as the basis for calculating the golden parachute payment was reasonable in light of performance and peers |
● |
Whether the golden parachute payment will have the effect of rewarding a management team that has failed to effectively manage the company |
It may be difficult to anticipate the results of a plan until after it has been triggered; as a result, BlackRock may vote against a golden parachute proposal even if the golden parachute plan under review was approved by shareholders when it was implemented.
We may support shareholder proposals requesting that implementation of such arrangements require shareholder approval. We generally support proposals requiring shareholder approval of plans that exceed 2.99 times an executives current salary and bonus, including equity compensation.
Option exchanges
We believe that there may be legitimate instances where underwater options create an overhang on a companys capital structure and a repricing or option exchange may be warranted. We will evaluate these instances on a case-by-case basis. BlackRock may support a request to reprice or exchange underwater options under the following circumstances:
● |
The company has experienced significant stock price decline as a result of macroeconomic trends, not individual company performance |
● |
Directors and executive officers are excluded; the exchange is value neutral or value creative to shareholders; tax, accounting, and other technical considerations have been fully contemplated |
● |
There is clear evidence that absent repricing, the company will suffer serious employee incentive or retention and recruiting problems |
BlackRock may also support a request to exchange underwater options in other circumstances, if we determine that the exchange is in the best interest of shareholders.
Pay-for-Performance plans
In order for executive compensation exceeding $1 million USD to qualify for federal tax deductions, related to Section 162(m) of the Internal Revenue Code of 1986, the Omnibus Budget Reconciliation Act (OBRA) requires companies to link compensation for the companys top five executives to disclosed performance goals and submit the plans for shareholder approval. The law further requires that a compensation committee comprised solely of outside directors administer these plans. Because the primary objective of these proposals is to preserve the deductibility of such compensation, we generally favor approval in order to preserve net income.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 12 |
Supplemental executive retirement plans
BlackRock may support shareholder proposals requesting to put extraordinary benefits contained in Supplemental Executive Retirement Plans (SERP) agreements to a shareholder vote unless the companys executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans.
Environmental and social issues
Our fiduciary duty to clients is to protect and enhance their economic interest in the companies in which we invest on their behalf. It is within this context that we undertake our corporate governance activities. We believe that well-managed companies will deal effectively with the material environmental and social (E&S) factors relevant to their businesses. Robust disclosure is essential for investors to effectively gauge companies business practices and planning related to E&S risks and opportunities.
BlackRock expects companies to issue reports aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the standards put forward by the Sustainability Accounting Standards Board (SASB). We view the SASB and TCFD frameworks as complementary in achieving the goal of disclosing more financially material information, particularly as it relates to industry-specific metrics and target setting. TCFDs recommendations provide an overarching framework for disclosure on the business implications of climate change, and potentially other E&S factors. We find SASBs industry-specific guidance (as identified in its materiality map) beneficial in helping companies identify and discuss their governance, risk assessments, and performance against these key performance indicators (KPIs). Any global standards adopted, peer group benchmarking undertaken, and verification process in place should also be disclosed and discussed in this context.
BlackRock has been engaging with companies for several years on disclosure of material E&S factors. Given the increased understanding of sustainability risks and opportunities, and the need for better information to assess them, we specifically ask companies to:
1) |
Publish disclosures in line with industry specific SASB guidelines by year-end, if they have not already done so, or disclose a similar set of data in a way that is relevant to their particular business; and |
2) |
Disclose climate-related risks in line with the TCFDs recommendations, if they have not already done so. This should include the companys plan for operating under a scenario where the Paris Agreements goal of limiting global warming to less than two degrees is fully realized, as expressed by the TCFD guidelines. |
See our commentary on our approach to engagement on TCFD and SASB aligned reporting for greater detail of our expectations.
We will use these disclosures and our engagements to ascertain whether companies are properly managing and overseeing these risks within their business and adequately planning for the future. In the absence of robust disclosures, investors, including BlackRock, will increasingly conclude that companies are not adequately managing risk.
We believe that when a company is not effectively addressing a material issue, its directors should be held accountable. We will generally engage directly with the board or management of a company when we identify issues. We may vote against the election of directors where we have concerns that a company might not be dealing with E&S factors appropriately. Sometimes we may reflect such concerns by supporting a shareholder proposal on the issue, where there seems to be either a significant potential threat or realized harm to shareholders interests caused by poor management of material E&S factors. In deciding our course of action, we will assess the nature of our engagement with the company on the issue over time, including whether:
● |
The company has already taken sufficient steps to address the concern |
● |
The company is in the process of actively implementing a response |
● |
There is a clear and material economic disadvantage to the company in the near-term if the issue is not addressed in the manner requested by the shareholder proposal |
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 13 |
We do not see it as our role to make social, ethical, or political judgments on behalf of clients, but rather, to protect their long-term economic interests as shareholders. We expect investee companies to comply, at a minimum, with the laws and regulations of the jurisdictions in which they operate. They should explain how they manage situations where such laws or regulations are contradictory or ambiguous.
Climate risk
Within the framework laid out above, as well as our guidance on How BlackRock Investment Stewardship engages on climate risk, we believe that climate presents significant investment risks and opportunities that may impact the long-term financial sustainability of companies. We believe that the reporting frameworks developed by TCFD and SASB provide useful guidance to companies on identifying, managing, and reporting on climate-related risks and opportunities.
We expect companies to help their investors understand how the company may be impacted by climate risk, in the context of its ability to realize a long-term strategy and generate value over time. We expect companies to convey their governance around this issue through their corporate disclosures aligned with TCFD and SASB. For companies in sectors that are significantly exposed to climate-related risk, we expect the whole board to have demonstrable fluency in how climate risk affects the business and how management approaches assessing, adapting to, and mitigating that risk.
Where a company receives a shareholder proposal related to climate risk, in addition to the factors laid out above, our assessment will take into account the robustness of the companys existing disclosures as well as our understanding of its management of the issues as revealed through our engagements with the company and board members over time. In certain instances, we may disagree with the details of a climate-related shareholder proposal but agree that the company in question has not made sufficient progress on climate-related disclosures. In these instances, we may not support the proposal, but may vote against the election of relevant directors.
Corporate political activities
Companies may engage in certain political activities, within legal and regulatory limits, in order to influence public policy consistent with the companies values and strategies, and thus serve shareholders best long-term economic interests. These activities can create risks, including: the potential for allegations of corruption; the potential for reputational issues associated with a candidate, party, or issue; and risks that arise from the complex legal, regulatory, and compliance considerations associated with corporate political activity. We believe that companies which choose to engage in political activities should develop and maintain robust processes to guide these activities and to mitigate risks, including a level of board oversight.
When presented with shareholder proposals requesting increased disclosure on corporate political activities, we may consider the political activities of that company and its peers, the existing level of disclosure, and our view regarding the associated risks. We generally believe that it is the duty of boards and management to determine the appropriate level of disclosure of all types of corporate activity, and we are generally not supportive of proposals that are overly prescriptive in nature. We may decide to support a shareholder proposal requesting additional reporting of corporate political activities where there seems to be either a significant potential threat or actual harm to shareholders interests, and where we believe the company has not already provided shareholders with sufficient information to assess the companys management of the risk.
Finally, we believe that it is not the role of shareholders to suggest or approve corporate political activities; therefore we generally do not support proposals requesting a shareholder vote on political activities or expenditures.
General corporate governance matters
Adjourn meeting to solicit additional votes
We generally support such proposals unless the agenda contains items that we judge to be detrimental to shareholders best long-term economic interests.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 14 |
Bundled proposals
We believe that shareholders should have the opportunity to review substantial governance changes individually without having to accept bundled proposals. Where several measures are grouped into one proposal, BlackRock may reject certain positive changes when linked with proposals that generally contradict or impede the rights and economic interests of shareholders.
Exclusive forum provisions
BlackRock generally supports proposals to seek exclusive forum for certain shareholder litigation. In cases where a board unilaterally adopts exclusive forum provisions that we consider unfavorable to the interests of shareholders, we will vote against the independent chair or lead independent director and members of the governance committee.
Multi-jurisdictional companies
Where a company is listed on multiple exchanges or incorporated in a country different from its primary listing, we will seek to apply the most relevant market guideline(s) to our analysis of the companys governance structure and specific proposals on the shareholder meeting agenda. In doing so, we typically consider the governance standards of the companys primary listing, the market standards by which the company governs itself, and the market context of each specific proposal on the agenda. If the relevant standards are silent on the issue under consideration, we will use our professional judgment as to what voting outcome would best protect the long-term economic interests of investors. We expect that companies will disclose the rationale for their selection of primary listing, country of incorporation, and choice of governance structures, in particular where there is conflict between relevant market governance practices.
Other business
We oppose giving companies our proxy to vote on matters where we are not given the opportunity to review and understand those measures and carry out an appropriate level of shareholder oversight.
Reincorporation
Proposals to reincorporate from one state or country to another are most frequently motivated by considerations of anti-takeover protections, legal advantages, and / or cost savings. We will evaluate, on a case-by-case basis, the economic and strategic rationale behind the companys proposal to reincorporate. In all instances, we will evaluate the changes to shareholder protection under the new charter / articles / bylaws to assess whether the move increases or decreases shareholder protections. Where we find that shareholder protections are diminished, we may support reincorporation if we determine that the overall benefits outweigh the diminished rights.
IPO governance
We expect boards to consider and disclose how the corporate governance structures adopted upon initial public offering (IPO) are in shareholders best long-term interests. We also expect boards to conduct a regular review of corporate governance and control structures, such that boards might evolve foundational corporate governance structures as company circumstances change, without undue costs and disruption to shareholders. In our letter on unequal voting structures, we articulate our view that one vote for one share is the preferred structure for publicly-traded companies. We also recognize the potential benefits of dual class shares to newly public companies as they establish themselves; however, we believe that these structures should have a specific and limited duration. We will generally engage new companies on topics such as classified boards and supermajority vote provisions to amend bylaws, as we believe that such arrangements may not be in the best interest of shareholders in the long-term.
We will typically apply a one-year grace period for the application of certain director-related guidelines (including, but not limited to, director independence and over-boarding considerations), during which we expect boards to take steps to bring corporate governance standards in line with our expectations.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 15 |
Further, if a company qualifies as an emerging growth company (an EGC) under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), we will give consideration to the NYSE and NASDAQ governance exemptions granted under the JOBS Act for the duration such a company is categorized as an EGC. We expect an EGC to have a totally independent audit committee by the first anniversary of its IPO, with our standard approach to voting on auditors and audit-related issues applicable in full for an EGC on the first anniversary of its IPO.
Amendment to charter / articles / bylaws
We believe that shareholders should have the right to vote on key corporate governance matters, including on changes to governance mechanisms and amendments to the charter / articles / bylaws. We may vote against certain directors where changes to governing documents are not put to a shareholder vote within a reasonable period of time, in particular if those changes have the potential to impact shareholder rights (see Director elections herein). In cases where a boards unilateral adoption of changes to the charter / articles / bylaws promotes cost and operational efficiency benefits for the company and its shareholders, we may support such action if it does not have a negative effect on shareholder rights or the companys corporate governance structure.
When voting on a management or shareholder proposal to make changes to the charter / articles / bylaws, we will consider in part the companys and / or proponents publicly stated rationale for the changes, the companys governance profile and history, relevant jurisdictional laws, and situational or contextual circumstances which may have motivated the proposed changes, among other factors. We will typically support changes to the charter / articles / bylaws where the benefits to shareholders, including the costs of failing to make those changes, demonstrably outweigh the costs or risks of making such changes.
Proxy access
We believe that long-term shareholders should have the opportunity, when necessary and under reasonable conditions, to nominate directors on the companys proxy card.
In our view, securing the right of shareholders to nominate directors without engaging in a control contest can enhance shareholders ability to meaningfully participate in the director election process, stimulate board attention to shareholder interests, and provide shareholders an effective means of directing that attention where it is lacking. Proxy access mechanisms should provide shareholders with a reasonable opportunity to use this right without stipulating overly restrictive or onerous parameters for use, and also provide assurances that the mechanism will not be subject to abuse by short-term investors, investors without a substantial investment in the company, or investors seeking to take control of the board.
In general, we support market-standardized proxy access proposals, which allow a shareholder (or group of up to 20 shareholders) holding three percent of a companys outstanding shares for at least three years the right to nominate the greater of up to two directors or 20% of the board. Where a standardized proxy access provision exists, we will generally oppose shareholder proposals requesting outlier thresholds.
Right to act by written consent
In exceptional circumstances and with sufficiently broad support, shareholders should have the opportunity to raise issues of substantial importance without having to wait for management to schedule a meeting. We therefore believe that shareholders should have the right to solicit votes by written consent provided that: 1) there are reasonable requirements to initiate the consent solicitation process (in order to avoid the waste of corporate resources in addressing narrowly supported interests); and 2) shareholders receive a minimum of 50% of outstanding shares to effectuate the action by written consent. We may oppose shareholder proposals requesting the right to act by written consent in cases where the proposal is structured for the benefit of a dominant shareholder to the exclusion of others, or if the proposal is written to discourage the board from incorporating appropriate mechanisms to avoid the waste of corporate resources when establishing a right to act by written consent. Additionally, we may oppose shareholder proposals requesting the right to act by written consent if the company already provides a shareholder right to call a special meeting that we believe offers
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 16 |
shareholders a reasonable opportunity to raise issues of substantial importance without having to wait for management to schedule a meeting.
Right to call a special meeting
In exceptional circumstances and with sufficiently broad support, shareholders should have the opportunity to raise issues of substantial importance without having to wait for management to schedule a meeting. We therefore believe that shareholders should have the right to call a special meeting in cases where a reasonably high proportion of shareholders (typically a minimum of 15% but no higher than 25%) are required to agree to such a meeting before it is called, in order to avoid the waste of corporate resources in addressing narrowly supported interests. However, we may oppose this right in cases where the proposal is structured for the benefit of a dominant shareholder to the exclusion of others. We generally believe that a right to act via written consent is not a sufficient alternative to the right to call a special meeting.
Simple majority voting
We generally favor a simple majority voting requirement to pass proposals. Therefore, we will support the reduction or the elimination of supermajority voting requirements to the extent that we determine shareholders ability to protect their economic interests is improved. Nonetheless, in situations where there is a substantial or dominant shareholder, supermajority voting may be protective of public shareholder interests and we may support supermajority requirements in those situations.
This document is provided for information or educational purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
The information and opinions contained in this document are as of January 2020 unless it is stated otherwise and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy.
BLACKROCK | Corporate governance and proxy voting guidelines for U.S. securities | 17 |