|
|
|
|
Notes to Financial Statements (continued)
|
tuations
arising from changes in the market prices of portfolio securities sold during
the period.
Short sales:
When the Trusts engage in a short sale, an amount
equal to the proceeds received by the Trusts is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the market value of the short sale. The Trusts
maintain a segregated account of securities as collateral for the short sales.
The Trusts are exposed to market risk based on the amount, if any, that the market
value of the stock exceeds the market value of the securities in the segregated
account. The Trusts are required to repay the counterparty any dividends or
interest received on the security sold short.
A gain,
limited to the price at which the Trusts sold the security short, or a loss,
unlimited as to the dollar amount, will be recognized upon the termination of a
short sale if the market price is greater or less than the proceeds originally
received.
Trust Preferred Stock:
These securities are
typically issued by corporations, generally in the form of interest-bearing
notes with preferred securities characteristics, or by an affiliated business
trust of a corporation, generally in the form of beneficial interests in
subordinated debentures or similarly structured securities. The securities can
be structured as either fixed or adjustable coupon securities that can have
either a perpetual or stated maturity date. Dividends can be deferred without
creating an event of default or acceleration, although maturity cannot take
place unless all cumulative payment obligations have been met. The deferral of
payments does not affect the purchase or sale of these securities in the open
market. Payments on these securities are treated as interest rather than
dividends for Federal income tax purposes. These securities can have a rating
that is slightly below that of the issuing companys senior debt securities.
Credit Risk:
Preferred Opportunity invests a significant portion of
its assets in securities issued by financial institutions that may have
exposure to commercial or residential mortgage loans and/or securities of
issuers that hold mortgage and other asset-backed securities. Changes in
economic conditions, including delinquencies and/or defaults of these loans and
other underlying securities held by these financial institutions, may affect
the value, income and/or liquidity of Preferred Opportunitys investments.
Please see the Schedule of Investments for these securities.
Segregation:
In cases in which the 1940 Act, and the interpretive
positions of the Securities and Exchange Commission (the SEC) require that
each Trust segregate assets in connection with certain investments (e.g., when
issued securities, reverse repurchase agreements, swaps or futures contracts), each
Trust will, consistent with certain interpretive letters issued by the SEC,
designate on its books and records cash or other liquid debt securities having
a market value at least equal to the amount that would otherwise be required to
be physically segregated.
Income Taxes:
It is each Trusts policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no federal income tax provision is required. Under the
applicable foreign tax law, a withholding tax may be imposed on interest,
dividends and capital gains at various rates.
Effective
June 29, 2007, the Trusts implemented Financial Accounting Standards Board
(FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes
an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 prescribes the
minimum recognition threshold a tax position must meet in connection with
accounting for uncertainties in income tax positions taken or expected to be
taken by an entity, including investment companies, before being measured and
recognized in the financial statements. Management has evaluated the
application of FIN 48 to the Trusts, and has determined that the adoption of
FIN 48 does not have a material impact on the Trusts financial statements. The
Trusts file U.S. federal and various state and local tax returns. No income tax
returns are currently under examination. The statute of limitations on the
Trusts U.S. federal tax returns remains open for the years ended December 31,
2004 through December 31, 2006. The statute of limitations on the Trusts state
and local tax returns may remain open for an additional year depending upon the
jurisdiction.
Dividends and Distributions:
Dividends to common
shareholders from net investment income are declared and paid monthly.
Distributions of capital gains are recorded on the ex-dividend dates. Dividends
and distributions to preferred shareholders are accrued and determined as
described in Note 5. If the total dividends and distributions made in any tax
year exceeds net investment income and accumulated realized capital gains, a
portion of the total distribution may be treated as a tax return of capital.
For the year ended December 31, 2007, a portion of the dividends and
distributions were characterized as a tax return of capital.
Estimates:
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities including investment valuations at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates and such
differences may be material.
Deferred Compensation and BlackRock Closed-End Share Equivalent
Investment Plan:
Under the deferred compensation plan approved by each
Trusts Board, non-interested Trustees/Directors (Independent Trustees) defer
a portion of their annual complex-wide compensation. Deferred amounts earn an
approximate return as though equivalent dollar amounts had been invested in
common shares of other BlackRock Closed-End Funds selected by the Independent
Trustees. These amounts are shown on the Statement of Assets and Liabilities as
Investments in Affiliates. This has approximately the same economic effect
for the Independent Trustees as if the Independent Trustees had invested the
deferred amounts directly in such Trusts.
The
deferred compensation plan is not funded and obligations thereunder represent
general unsecured claims against the general assets of the Trust. Each Trust
may, however, elect to invest in common shares of those Trusts
|
|
|
|
|
|
|
|
28
|
ANNUAL REPORT
|
DECEMBER 31,
2007
|
|
|
|
|
|
Notes to Financial Statements (continued)
|
selected by
the Independent Trustees in order to match its deferred compensation obligations.
Other:
Expenses that are directly related to one of the
Trusts are charged directly to that Trust. Other operating expenses are
generally prorated to the Trusts on the basis of relative net assets of all the
BlackRock Closed-End Funds.
2. Investment Advisory Agreement and Other Transactions with Affiliates:
Each Trust
has an Investment Advisory Agreement (the Agreements) with the Advisor.
BlackRock Financial Management, Inc. (BFM), a wholly owned subsidiary of
BlackRock, Inc., serves as sub-advisor to the Trusts. Merrill Lynch & Co.,
Inc. (Merrill Lynch) and The PNC Financial Services Group, Inc. are principal
owners of BlackRock, Inc. The Agreements for the Trusts cover both investment
advisory and administration services.
The
investment advisory fee paid to the Advisor is computed weekly and payable
monthly based on an annual rate equal to 0.75% of Globals and 0.65% of
Preferred Opportunitys average weekly managed assets. Managed assets means
the total assets of a Trust (including any assets attributable to any borrowing
that may be outstanding) minus the sum of accrued liabilities (other than debt
representing financial leverage). The investment advisory fee paid to the
Advisor is computed weekly and payable monthly based on an annual rate equal to
0.75% of the first $200 million of High Incomes average weekly managed assets
and 0.50% thereafter. The Advisor has voluntarily agreed to waive a portion of
the investment advisory fees or other expenses on Global as a percentage of its
average weekly managed assets as follows: 0.20% for the first five years of the
Trusts operations (through August 30, 2009), 0.15% in year six (through August
30, 2010), 0.10% in year seven (through August 30, 2011) and 0.05% in year
eight (through August 30, 2012).
The Advisor
pays BFM fees for its sub-advisory services.
Pursuant to
the Investment Management Agreements, the Advisor provides continuous
supervision of each Trusts investment portfolio and pays the compensation of
officers of each Trust who are affiliated persons of the Advisor, as well as
occupancy and certain clerical and accounting costs of each Trust. Each Trust
bears all other costs and expenses, which include reimbursements to the Advisor
for employee costs related to pricing and secondary market support. These
expenses are generally pro-rated to the Trusts on the basis of the relative net
assets of certain BlackRock Closed-End Funds. For the year ended December 31,
2007, the Trusts reimbursed the Advisor in the following amounts, which are included
in miscellaneous expenses in the Statements of Operations:
|
|
|
|
|
|
|
|
|
Trust
|
|
Amount
|
|
|
|
|
|
Global
|
|
|
$ 23,362
|
|
High Income
|
|
|
6,766
|
|
Preferred Opportunity
|
|
|
21,589
|
|
Pursuant to
the terms of the custody agreements, each Trust may receive earnings credits
from its custodian for positive cash balances maintained, which are used to
offset custody fees. These credits are shown on the Statements of Operations as
fees paid indirectly.
Merrill
Lynch, through its affiliated broker dealer Merrill Lynch, Pierce, Fenner &
Smith Incorporated, earned $41,662 in commissions on the execution of portfolio
security transactions from Preferred Opportunity for the year ended December
31, 2007.
Certain
officers and/or directors of the Trusts are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Investments:
Purchases
and sales of investments, excluding short-term securities, dollar rolls and
U.S. government securities, for the year ended December 31, 2007 were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
Purchases
|
|
Sales
|
|
|
|
|
|
|
|
Global
|
|
|
$ 283,515,242
|
|
|
$ 341,552,426
|
|
High Income
|
|
|
134,872,800
|
|
|
144,181,920
|
|
Preferred Opportunity
|
|
|
580,275,382
|
|
|
624,971,089
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL
REPORT
|
DECEMBER 31,
2007
|
29
|
|
|
|
Notes to
Financial Statements (continued)
|
Details of
open forward currency contracts held in Global at December 31, 2007 were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
Currency
|
|
Settlement
Date
|
|
Contract
to
Purchase/
Receive
|
|
Value
at
Settlement
Date
|
|
Value
at
December 31,
2007
|
|
Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bought:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1/23/08
|
|
$
|
1,285,000
|
|
$
|
1,877,688
|
|
$
|
1,879,516
|
|
$
|
1,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
British Pound
|
|
|
1/23/08
|
|
$
|
10,507,500
|
|
$
|
21,347,389
|
|
$
|
20,902,119
|
|
$
|
445,270
|
|
Euro
|
|
|
1/23/08
|
|
|
84,078,132
|
|
|
119,138,713
|
|
|
122,977,602
|
|
|
(3,838,889
|
)
|
Mexican Peso
|
|
|
1/23/08
|
|
|
18,666,417
|
|
|
1,716,673
|
|
|
1,707,602
|
|
|
9,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(3,384,548
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Details of
open credit default swap agreements at December 31, 2007 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
Notional
Amount
(000)
|
|
Fixed
Rate
|
|
Counter
Party
|
|
Effective
Date
|
|
Termination
Date
|
|
Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
$
|
1,800
|
|
|
2.000%
(a)
|
|
|
Deutsche Bank
|
|
|
03/01/07
|
|
|
03/20/12
|
|
|
$
|
(119,977
|
)
|
|
|
|
$
|
2,000
|
|
|
2.100%
(b)
|
|
|
Lehman Brothers
|
|
|
03/03/07
|
|
|
03/20/12
|
|
|
|
(61,932
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(181,909
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
|
|
$
|
1,900
|
|
|
3.200%
(c)
|
|
|
Goldman Sachs
|
|
|
12/12/07
|
|
|
12/20/12
|
|
|
$
|
59,435
|
|
|
Opportunity
|
|
$
|
1,900
|
|
|
3.200%
(c)
|
|
|
Citibank
|
|
|
12/12/07
|
|
|
12/20/12
|
|
|
|
59,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
118,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The terms were to receive the quarterly notional amount
multiplied by the fixed rate and to pay the counterparty, upon an event of
default of BAA Ferovial Junior Loan, the par value of the notional amount of
BAA Ferovial.
|
(b)
|
The terms were to receive the quarterly notional amount
multiplied by the fixed rate and to pay the counterparty, upon an event of
default of PagesJaunes Second Lien Loan, the par value of the notional amount
of PagesJaunes Groupe SA.
|
(c)
|
The terms were to pay the quarterly notional amount
multiplied by the fixed rate and to receive from the counterparty, upon an
event of default of Washington Mutual, Inc., the par value of the notional
amount of Washington Mutual, Inc.
|
|
|
|
|
|
|
|
|
30
|
ANNUAL REPORT
|
DECEMBER
31, 2007
|
|
|
|
|
Notes to
Financial Statements (continued)
|
4. Income Tax Information:
It is each
Trusts policy to comply with requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially
all of its taxable income to its shareholders. Therefore, no federal income tax
provision is required.
Dividends
from net investment income and distributions from net capital gains are
determined in accordance with U.S. federal income tax regulations, which may
differ from those amounts determined under accounting principles generally
accepted in the United States. These book/tax differences are either temporary
or permanent in nature. To the extent these differences are permanent, they are
charged or credited to paid-in-capital, undistributed net investment income, or
accumulated net realized gain, as appropriate, in the period the difference
arise.
Reclassification of Capital Accounts:
Accounting principles
generally accepted in the United States of America require that certain
components of net assets be adjusted to reflect permanent differences between
financial and tax reporting. Accordingly, the table below summarizes the
amounts reclassified per Trust during the current year between undistributed (distributions
in excess of) net investment income, accumulated net realized gain/(loss) and
paid-in capital in excess of par as a result of permanent differences
attributable to amortization methods of premiums and discounts on fixed income
securities, accounting for swap agreements, transactions involving foreign
securities and currencies, expiration of capital loss carryfor-wards and other
differences between financial reporting and tax accounting were classified to
the following accounts. These reclassifications have no effect on net assets or
net asset values per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
Undistributed
Net
Investment Income/
Distributions
in Excess of Net
Investment
Income
|
|
Accumulated
Net Realized
Gain/(Loss)
|
|
Paid-In
Capital in
Excess of Par
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
$
|
(7,272,230
|
)
|
|
|
$
|
7,272,230
|
|
|
|
$
|
|
|
|
High Income
|
|
|
|
832,748
|
|
|
|
|
23,305,589
|
|
|
|
|
(24,138,337
|
)
|
|
Preferred Opportunity
|
|
|
|
4,822
|
|
|
|
|
(4,822
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tax
character of distributions paid during the year ended December 31, 2007 and
2006 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2007
|
|
|
|
|
|
Distributions Paid From:
|
|
Ordinary
Income
|
|
Non-taxable
Return of
Capital
|
|
Long-Term
Capital Gains
|
|
Total
Distributions
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
$
|
39,557,202
|
|
$
|
8,473,282
|
|
|
$
|
|
|
|
|
$
|
48,030,484
|
|
|
High Income
|
|
|
12,923,299
|
|
|
|
|
|
|
|
|
|
|
|
12,923,299
|
|
|
Preferred Opportunity
|
|
|
40,678,314
|
|
|
2,820,986
|
|
|
|
400,000
|
|
|
|
|
43,899,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2006
|
|
|
|
|
|
Distributions Paid From:
|
|
Ordinary
Income
|
|
Long-Term
Capital Gains
|
|
Total
Distributions
|
|
|
|
|
|
|
|
|
|
Global
|
|
$
|
45,130,597
|
|
|
$
|
640,846
|
|
|
|
$
|
45,771,443
|
|
|
High Income
|
|
|
12,792,689
|
|
|
|
|
|
|
|
|
12,792,689
|
|
|
Preferred Opportunity
|
|
|
42,381,795
|
|
|
|
4,836,485
|
|
|
|
|
47,218,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
December 31, 2007, the components of distributable earnings on a tax basis were
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
Undistributed
Ordinary
Income
|
Unrealized
Net
Losses
|
|
|
|
|
|
|
|
Global
|
|
$
|
|
|
$
|
(17,200,344
|
)
|
High Income
|
|
|
469,701
|
|
|
(12,299,388
|
)
|
Preferred Opportunity
|
|
|
|
|
|
(54,038,067
|
)
|
|
|
|
|
|
|
|
|
The
difference between book-basis and tax-basis unrealized gains/losses is
attributable primarily to amortization methods of premiums and discounts on
fixed income securities, the deferral of post-October capital losses for tax
purposes, the tax deferral of losses on wash sales, accounting for swap
agreements, the realization for tax purposes of unrealized gains/losses on certain
future and foreign currency contracts, book/tax differences in the accrual of
income on securities in default, the realization for tax purposes of unrealized
gains on investments in passive foreign investment companies, deferred
compensation to trustees and other temporary differences.
For federal
income tax purposes, the following Trusts had capital loss carry-forwards at
December 31, 2007. These amounts may be used to offset future realized capital
gains, if any:
|
|
|
|
|
|
|
|
Trust
|
|
Capital
Loss
Carryforward
Amount
|
|
Expires
|
|
|
|
|
|
|
|
Global
|
|
$
|
3,268,804
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
High Income
|
|
$
|
35,363,213
|
|
|
2008
|
|
|
|
|
55,878,284
|
|
|
2009
|
|
|
|
|
102,576,339
|
|
|
2010
|
|
|
|
|
28,467,396
|
|
|
2011
|
|
|
|
|
2,339,279
|
|
|
2012
|
|
|
|
|
7,043,976
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
$
|
231,668,487
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Opportunity
|
|
$
|
18,184,893
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
5. Capital:
There are
an unlimited number of $0.001 par value common shares authorized for Global and
Preferred Opportunity. There are an unlimited number of no par value shares
authorized for High Income. At December 31, 2007, the shares owned by
affiliates of the Advisor of Global were 7,551.
During the
year ended December 31, 2007 and 2006, the Trusts issued the following
additional shares under their respective dividend reinvestment plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
December
31, 2007
|
|
December
31, 2006
|
|
|
|
|
|
|
|
Global
|
|
42,574
|
|
|
21,644
|
|
|
High Income
|
|
|
|
|
127,532
|
|
|
Preferred Opportunity
|
|
30,981
|
|
|
49,079
|
|
|
|
|
|
|
As of
December 31, 2007, Global and Preferred Opportunity have the following series
of Auction Preferred Shares outstanding as listed in the table below. The
Auction Preferred Shares have a liquidation value of $25,000 per share plus any
accumulated unpaid dividends.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
Series
|
|
Shares
|
|
Trust
|
|
Series
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
T7
|
|
|
3,246
|
|
|
|
Preferred
|
|
|
T7
|
|
|
2,944
|
|
|
|
W7
|
|
|
3,246
|
|
|
|
Opportunity
|
|
|
W7
|
|
|
2,944
|
|
|
|
R7
|
|
|
3,246
|
|
|
|
|
|
|
R7
|
|
|
2,944
|
|
|
|
|
|
|
|
|
|
|
ANNUAL
REPORT
|
DECEMBER
31, 2007
|
31
|
|
|
|
Notes to
Financial Statements (concluded)
|
Dividends
on seven-day Auction Preferred Shares are cumulative at a rate which is reset
every seven days based on the results of an auction. If the Auction Preferred
Shares are unable to be remarketed on the remarketing date as part of the
auction process, the Trusts would be required to pay the maximum applicable
rate on the Auction Preferred Shares to holders of such shares for successive
dividend periods until such time as the shares are successfully remarketed. The
maximum applicable rate on Auction Preferred Shares for Global is the higher of
125% of the 7-day Telerate/BBA LIBOR rate or 125% over the 7-day Telerate/BBA
LIBOR rate and for Preferred Opportunity is 150% of the Interest Equivalent of
the 30-day commercial paper rate. During the year ended December 31, 2007,
Auction Preferred Shares of the Trusts were successfully remarketed at each
remarketing date. The dividend ranges on the Auction Preferred Shares for
Global and Preferred Opportunity for the year ended December 31, 2007 were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
Series
|
|
Low
|
|
High
|
|
Average
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
T7
|
|
4.15
|
%
|
|
6.75
|
%
|
|
5.16
|
%
|
|
|
|
|
W7
|
|
4.75
|
|
|
6.45
|
|
|
5.16
|
|
|
|
|
|
R7
|
|
4.80
|
|
|
6.40
|
|
|
5.16
|
|
|
Preferred Opportunity
|
|
|
T7
|
|
4.80
|
|
|
6.30
|
|
|
5.19
|
|
|
|
|
|
W7
|
|
4.80
|
|
|
6.40
|
|
|
5.18
|
|
|
|
|
|
R7
|
|
4.88
|
|
|
6.25
|
|
|
5.21
|
|
|
Global and
Preferred Opportunity may not declare dividends or make other distributions on
common shares or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Auction Preferred Shares and any other borrowings would be less than 200%.
The Auction
Preferred Shares are redeemable at the option of Global and Preferred
Opportunity, in whole or in part, on any dividend payment date at $25,000 per
share plus any accumulated or unpaid dividends whether or not declared. The
Auction Preferred Shares are also subject to mandatory redemption at $25,000
per share plus any accumulated or unpaid dividends, whether or not declared, if
certain requirements relating to the composition of the assets and liabilities
of Global and Preferred Opportunity, as set forth in Globals and Preferred
Opportunitys Declaration of Trust, are not satisfied.
The holders
of Auction Preferred Shares have voting rights equal to the holders of common
shares (one vote per share) and will vote together with holders of common
shares as a single class. However, holders of Auction Preferred Shares, voting
as a separate class, are also entitled to elect two Trustees for Global and Preferred
Opportunity, respectively. In addition, the 1940 Act requires that along with
approval by shareholders that might otherwise be required, the approval of the
holders of a majority of any outstanding Auction Preferred Shares, voting
separately as a class would be required to (a) adopt any plan of reorganization
that would adversely affect the Auction Preferred Shares, (b) change a Trusts
sub-classification as a closed-end investment company or change its fundamental
investment restrictions and (c) change its business so as to cease to be an
investment company.
6. Subsequent Events:
During the
period February 13, 2008 to February 29, 2008, the Auction Preferred Shares of
each Trust were not successfully remarketed. As a result, the Auction Preferred
Share dividend rates were reset to the maximum applicable rate which ranged
from 4.37% to 4.65% for the Trusts during the period. Unsuccessful remarketing
during the auction process is not an event of default or credit but rather a
liquidity event for the holders of the Auction Preferred Shares.
Each Trust
paid a monthly distribution to holders of Common Shares on February 29, 2008 to
shareholders of record on February 15, 2008. The per share amounts were as
follows:
|
|
|
|
|
|
|
|
|
Trust
|
|
Common
Dividend
Per Share
|
|
|
|
|
|
Global
|
|
$
|
0.1250
|
|
High Income
|
|
|
0.0182
|
|
Preferred Opportunity
|
|
|
0.1250
|
|
The
dividends declared on Auction Preferred Shares for the period January 1, 2008
to January 31, 2008 for Global and Preferred Opportunity were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
Series
|
|
Dividends
Declared
|
|
Trust
|
|
Series
|
|
Dividends
Declared
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
T7
|
|
$
|
277,565
|
|
|
Preferred
|
|
|
T7
|
|
$
|
263,252
|
|
|
|
|
W7
|
|
|
358,196
|
|
|
Opportunity
|
|
|
W7
|
|
|
327,491
|
|
|
|
|
R7
|
|
|
354,268
|
|
|
|
|
|
R7
|
|
|
322,221
|
|
|
|
|
|
|
|
|
|
32
|
ANNUAL REPORT
|
DECEMBER
31, 2007
|
|
|
|
|
Report of Independent Registered
Public Accounting Firm
|
|
|
To the Directors/Trustees and
Shareholders of
|
|
BlackRock Global Floating Rate
Income Trust
|
|
BlackRock High Income Shares
|
|
BlackRock Preferred Opportunity
Trust
|
|
(collectively the Trusts):
|
We have
audited the accompanying statements of assets and liabilities of the Trusts,
including the portfolios of investments, as of December 31, 2007, and the
related statements of operations and cash flows (for BlackRock High Income
Shares) for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights
for each of the periods presented. These financial statements and financial
highlights are the responsibility of the Trusts management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The Financial Highlights of BlackRock High Income Shares
for each of the two years in the period ended December 31, 2004 were audited by
other auditors whose report, dated February 22, 2005, expressed an unqualified
opinion on the financial highlights.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Trusts are not required to have, nor were we engaged to perform,
an audit of their internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Trusts internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned as of December 31, 2007, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements and financial highlights referred to above
present fairly, in all material respects, the financial position of the Trusts
as of December 31, 2007, the results of their operations and cash flows (for
BlackRock High Income Shares) 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 periods presented, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte
& Touche
LLP
Boston,
Massachusetts
February 29, 2008
|
|
|
|
|
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2007
|
33
|
|
|
|
The Benefits and Risks of
Leveraging (unaudited)
|
The Trusts
may utilize leveraging through borrowings or issuance of short-term debt
securities or shares of Auction Preferred Stock. The concept of leveraging is
based on the premise that the cost of assets to be obtained from leverage will
be based on short-term interest rates on borrowings or dividend rates on the
Auction Preferred Stock, which normally will be lower than the income earned by
each Trust on its longer-term portfolio investments. 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 Common Stock
shareholders will be the beneficiaries of the incremental yield.
As of
December 31, 2007, the Trusts had the following leverage amounts to total net
assets before the deduction of leverage of:
|
|
|
|
|
|
Trust
|
|
Leverage
|
|
|
Global
|
|
|
37%
|
|
High Income
|
|
|
25%
|
|
Preferred Opportunity
|
|
|
38%
|
|
Leverage
creates risks for holders of Common Stock including the likelihood of greater
net asset value and market price volatility. In addition, there is the risk
that fluctuations in interest rates on borrowings or in the dividend rates on
any Auction Preferred Stock may reduce the Common Stocks yield and negatively
impact its net asset value and market price. If the income derived from
securities purchased with assets received from leverage exceeds the cost of
leverage, each Trusts net income will be greater than if leverage had not been
used. Conversely, if the income from the securities purchased is not sufficient
to cover the cost of leverage, each Trusts net income will be less than if
leverage had not been used, and therefore the amount available for distribution
to Common Stock shareholders will be reduced.
|
|
|
|
|
|
|
|
34
|
ANNUAL REPORT
|
DECEMBER 31, 2007
|
|
|
|
|
Dividend Reinvestment Plans
(unaudited)
|
Pursuant to
each Trusts respective Dividend Reinvestment Plan (the Plan), shareholders
of High Income may elect, while shareholders of Global and Preferred
Opportunity are automatically enrolled, to have all distributions of dividends
and capital gains reinvested by Computershare Trust Company, N.A. (the Plan
Agent) in the respective Trusts shares pursuant to the Plan. Shareholders who
do not participate in the Plan will receive all distributions in cash paid by
check and mailed directly to the shareholders of record (or if the shares are
held in street or other nominee name, then to the nominee) by the Plan Agent,
which serves as agent for the shareholders in administering the Plan.
After each
Trust declares a dividend or determines to make a capital gain distribution,
the Plan Agent will acquire shares for the participants account, depending
upon the circumstances described below, either (i) through receipt of unissued
but authorized shares from the Trust (newly issued shares) or (ii) by open
market purchases. If, on the dividend payment date, the NAV is equal to or less
than the market price per share plus estimated brokerage commissions (such
condition being referred to herein as market premium), the Plan Agent will
invest the dividend amount in newly issued shares on behalf of the
participants. The number of newly issued shares to be credited to each
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 payment date, the dollar amount of the
dividend will be divided by 95% of the market price on the payment date. If, on
the dividend payment date, the NAV is greater than the market value per share
plus estimated brokerage commissions (such condition being referred to herein
as market discount), the Plan Agent will invest the dividend amount in shares
acquired on behalf of the participants in open-market purchases.
Participation
in the Plan is completely voluntary and may be terminated or resumed at any
time without penalty by notice if received and processed by the Plan
Administrator prior to the dividend record date; otherwise such termination or
resumption will be effective with respect to any subsequently declared dividend
or other distribution.
The Plan
Agents fees for the handling of the reinvestment of dividends and
distributions is paid by each Trust. However, each participant pays a pro rata
share of brokerage commissions incurred with respect to the Plan Agents open
market purchases in connection with the reinvestment of dividends and
distributions. The automatic reinvestment of dividends and distributions does
not relieve participants of any Federal income tax that may be payable on such
dividends or distributions.
Each Trust
reserves the right to amend or terminate the Plan. There is no direct service
charge to participants in the Plan; however, each Trust reserves the right to
amend the Plan to include a service charge payable by the participants.
Participants who request a sale of shares through the Plan Agent are subject to
a $2.50 sales fee and a $0.15 per share sold brokerage commission. All
correspondence concerning the Plan should be directed to the Plan Agent at 250
Royall Street, Canton, MA 02021 or (800) 699-1BFM.
From time
to time in the future, the Trusts may effect redemptions and/or repurchases of
its Auction Preferred Shares as provided in the applicable constituent
instruments or as agreed upon by the Trust and holders of Auction Preferred
Shares. The Trusts would generally effect such redemptions and/or repurchases
to the extent necessary to maintain applicable asset coverage requirements.
|
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 nonpublic 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 nonpublic 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 Web sites.
BlackRock
does not sell or disclose to nonaffiliated third parties any non-public
personal information about its Clients, except as permitted by law or as is
necessary to service Client accounts. These nonaffiliated 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 nonpublic 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 nonpublic personal
information of its Clients, including procedures relating to the proper storage
and disposal of such information.
|
|
|
|
|
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2007
|
35
|
|
|
|
Additional Information
(unaudited)
|
TAX NOTICE
The
following information is provided with respect to the distributions paid by the
BlackRock Closed-End Funds for the fiscal year ended December 31, 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Class
(Common/
Preferred)
|
|
Payable
Date
|
|
Federal
Obligation
Interest
1,2
|
|
Qualifying
Dividend
Income for
Individuals
2
|
|
Dividends
Qualifying
for the
Dividends
Received
Deduction for
Corporations
2
|
|
Interest
Related
Dividends
for Non-U.S.
Residents
2,3
|
|
Long-Term
Capital
Gains Per
Share ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Floating Rate
Income Trust (BGT)
|
|
Common
|
|
1/31/07
12/18/07
|
|
|
|
|
|
|
|
|
|
|
85.39
|
%
|
|
|
|
|
|
Series T7
|
|
1/4/07
1/2/08
|
|
|
|
|
|
|
|
|
|
|
83.97
|
%
|
|
|
|
|
|
Series W7
|
|
1/4/07
12/27/07
|
|
|
|
|
|
|
|
|
|
|
83.97
|
%
|
|
|
|
|
|
Series R7
|
|
1/5/07
12/28/07
|
|
|
|
|
|
|
|
|
|
|
83.97
|
%
|
|
|
|
High Income
Shares (HIS)
|
|
Common
|
|
2/28/07
1/8/08
|
|
|
|
|
|
|
|
|
|
|
92.82
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Opportunity
Trust (BPP)
|
|
Common
|
|
2/28/07
|
|
3.49
|
%
|
|
16.15
|
%
|
|
4.96
|
%
|
|
41.35
|
%
|
|
0.017017
|
|
|
|
Common
|
|
3/30/07
12/18/07
|
|
3.49
|
%
|
|
10.33
|
%
|
|
6.52
|
%
|
|
54.39
|
%
|
|
|
|
|
|
Series T7
|
|
1/4/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.875340
|
|
|
|
Series T7
|
|
1/4/07
1/2/08
|
|
3.49
|
%
|
|
10.32
|
%
|
|
6.52
|
%
|
|
54.39
|
%
|
|
|
|
|
|
Series W7
|
|
1/4/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.886209
|
|
|
|
Series W7
|
|
1/4/07
12/27/07
|
|
3.49
|
%
|
|
10.32
|
%
|
|
6.52
|
%
|
|
54.39
|
%
|
|
|
|
|
|
Series R7
|
|
1/5/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.956182
|
|
|
|
Series R7
|
|
1/5/07
12/28/07
|
|
3.49
|
%
|
|
10.32
|
%
|
|
6.52
|
%
|
|
54.39
|
%
|
|
|
|
|
|
1
|
The law varies in each state as to whether and what
percentage of dividend income attributable to Federal Obligations is exempt
from state income tax. We recommend that you consult your tax advisor to
determine if any portion of the dividends you received is exempt from state
income taxes.
|
2
|
Expressed as a percentage of the ordinary income
distributions paid.
|
3
|
Represents the portion of the ordinary distributions paid
that are exempt from U.S withholding tax for nonresident aliens and foreign
corporations.
|
Shareholder Meetings
The Joint
Annual Meeting of Shareholders was held on August 16, 2007 for shareholders of
record as of June 20, 2007, to elect director or trustee nominees of each
Trust. This proposal was part of the reorganization of the Trusts Boards of
Trustees (the Boards) to take effect on or about November 1, 2007. Each Board
is organized into three classes, one class of which is elected annually. Each
Trustee serves a three-year term concurrent with the class into which he or she
is elected.
Approved
the Class I Directors/Trustees as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G.
Nicholas Beckwith, III
|
|
Kent
Dixon
|
|
R.
Glenn Hubbard
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
Global
|
|
19,824,634
|
|
167,865
|
|
19,828,588
|
|
163,911
|
|
19,827,918
|
|
164,581
|
|
High Income
|
|
40,224,388
|
|
1,077,478
|
|
40,183,462
|
|
1,118,404
|
|
40,193,783
|
|
1,108,083
|
|
Preferred Opportunity
|
|
16,847,821
|
|
207,618
|
|
16,832,503
|
|
222,936
|
|
16,842,548
|
|
212,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W.
Carl Kester
1
|
|
Robert
S. Salomon, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
Global
|
|
7,930
|
|
2
|
|
19,824,194
|
|
168,305
|
|
|
|
|
|
High Income
|
|
40,226,915
|
|
1,074,951
|
|
40,220,179
|
|
1,081,687
|
|
|
|
|
|
Preferred Opportunity
|
|
8,107
|
|
6
|
|
16,829,133
|
|
226,306
|
|
|
|
|
|
|
|
1
|
Voted on by holders of Auction Preferred Shares only for
Global and Preferred Opportunity.
|
|
|
|
|
|
|
|
|
36
|
ANNUAL REPORT
|
DECEMBER 31, 2007
|
|
|
|
|
|
Additional Information (unaudited) (concluded)
|
Approved
the Class II Directors/Trustees as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
S. Davis
|
|
Frank
J. Fabozzi
1
|
|
James
T. Flynn
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
19,816,678
|
|
|
175,821
|
|
|
7,930
|
|
|
2
|
|
|
19,832,108
|
|
|
160,391
|
|
High Income
|
|
|
40,220,386
|
|
|
1,081,480
|
|
|
40,227,915
|
|
|
1,073,951
|
|
|
40,218,280
|
|
|
1,083,586
|
|
Preferred Opportunity
|
|
|
16,846,273
|
|
|
209,166
|
|
|
8,106
|
|
|
7
|
|
|
16,833,348
|
|
|
222,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Karen
P. Robards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
19,824,257
|
|
|
168,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Income
|
|
|
40,245,111
|
|
|
1,056,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Opportunity
|
|
|
16,845,457
|
|
|
209,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Approved the Class III
Directors/Trustees as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
E. Cavanagh
|
|
Kathleen
F. Feldstein
|
|
Henry
Gabbay
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
19,826,048
|
|
|
166,451
|
|
|
19,824,109
|
|
|
168,390
|
|
|
19,812,193
|
|
|
180,306
|
|
High Income
|
|
|
40,221,463
|
|
|
1,080,403
|
|
|
40,201,928
|
|
|
1,099,938
|
|
|
40,219,458
|
|
|
1,082,408
|
|
Preferred Opportunity
|
|
|
16,844,904
|
|
|
210,535
|
|
|
16,843,094
|
|
|
212,345
|
|
|
16,845,523
|
|
|
209,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerrold
B. Harris
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
19,829,473
|
|
|
163,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Income
|
|
|
40,215,627
|
|
|
1,086,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Opportunity
|
|
|
16,835,521
|
|
|
219,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain Trusts had an additional
proposal (Proposal #2) to amend its respective Declaration of Trust to increase
the maximum number of Board Members to 15:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Against
|
|
Votes
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
19,452,738
|
|
|
374,971
|
|
|
164,790
|
|
|
|
|
|
|
|
|
|
|
Preferred Opportunity
|
|
|
16,639,156
|
|
|
313,207
|
|
|
103,075
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Voted on by holders of Auction Preferred Shares only for
Global and Preferred Opportunity.
|
Each Trust
listed for trading on the New York Stock Exchange (NYSE) has filed with the
NYSE its chief executive officer certification regarding compliance with the
NYSEs listing standards and have filed with the Securities and Exchange Commission
the certification of its chief executive officer and chief financial officer
required by section 302 of the Sarbanes-Oxley Act.
The Trusts
do not make available copies of their respective 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 such Trusts offering and the information contained
in each Trusts Statement of Additional Information may have become outdated.
During the
period, there were no material changes in any Trusts investment objective or
policies or to any Trusts charters or by-laws that were not approved by the
shareholders or in the principal risk factors associated with investment in the
Trusts. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trusts portfolio.
Quarterly
performance and other information regarding the Trusts may be found on
BlackRocks website, which can be accessed at http://www.blackrock.com. 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 into this report.
|
|
|
|
|
|
|
|
|
ANNUAL REPORT
|
DECEMBER
31, 2007
|
37
|
|
|
|
|
Section 19 Notices (unaudited)
|
The amounts
and sources of distributions reported are only estimates and are not being
provided for tax reporting purposes. The actual amounts and sources for tax
reporting purposes will depend upon the Trusts investment experience during
the remainder of its fiscal year and may be subject to changes based on the tax
regulations. The Trust will send you a Form 1099-DIV for the calendar year that
will tell you how to report these distributions for federal income tax
purposes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Fiscal Year to Date Cumulative
Distributions by Character
|
|
Percentage
of Fiscal Year to Date Cumulative
Distributions by Character
|
|
|
|
|
|
|
|
Trust
|
|
Net
Investment
Income
|
|
Net
Realized
Capital
Gains
|
|
Return
of
Capital
|
|
Total
Per
Common
Share
|
|
Net
Investment
Income
|
|
Net
Realized
Capital
Gains
|
|
Return
of
Capital
|
|
Total
Per
Common
Share
|
|
|
|
|
|
|
|
Preferred Opportunity
|
|
$
|
1.34
|
|
$
|
|
|
$
|
0.30
|
|
$
|
1.64
|
|
82
|
%
|
|
0
|
%
|
|
18
|
%
|
|
100
|
%
|
|
The Trust
estimates that it has distributed more than its income and net realized gains;
therefore, a portion of the distribution may be a return of capital. A return
of capital may occur, for example, when some or all of the money that you
invested in the Trust is paid back to the shareholder. A return of capital does
not necessarily reflect the Trusts investment performance and should not be
confused with yield or income.
|
|
|
|
|
|
|
|
38
|
ANNUAL REPORT
|
DECEMBER 31,
2007
|
|
|
|
|
Officers and Directors/Trustees
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address and
Year of Birth
|
|
Position(s) Held
with Fund
|
|
Length of
Time Served
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
BlackRock-
Advised Funds
and Portfolios
Overseen
|
|
Public Directorships
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interested
Directors
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G. Nicholas Beckwith, III
40 East 52nd Street
New York, NY 10022
1945
|
|
Director
|
|
2007 to present
|
|
Chairman and Chief Executive Officer, Arch Street Management,
LLC since 2005; Chairman and CEO, Beckwith Blawnox Property LLC since 2005;
Chairman and CEO, Beckwith Clearfield Property LLC since 2005; Chairman and
CEO, Beckwith Delmont Property LLC since 2005; Chairman and CEO, Beckwith
Erie Property LLC since 2005; Chairman, Penn West Industrial Trucks LLC since
2005; Chairman, President and Chief Executive Officer, Beckwith Machinery
Company from 1969 to 2005; Chairman of the Board of Directors, University of
Pittsburgh Medical Center since 2002; Board of Directors, Shady Side Hospital
Foundation since 1977; Beckwith Institute for Innovation In Patient Care
since 1991; Member, Advisory Council on Biology and Medicine, Brown
University since 2002; Trustee, Claude Worthington Benedum Foundation since
1977; Board of Trustees, Chatham College, University of Pittsburgh since
2003; Emeritus Trustee, Shady Side Academy since 1977.
|
|
111 Funds
108 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard E. Cavanagh
40 East 52nd Street
New York, NY 10022
1946
|
|
Director and Chairman of the Board of Directors
|
|
1994 to present
|
|
Trustee, Aircraft Finance Trust (AFT) since 1999;
Director, The Guardian Life Insurance Company of America since 1998; Chairman
and Trustee, Educational Testing Service (ETS) since 1997; Director, the
Fremont Group since 1996; President and Chief Executive Officer of The
Conferences Board, Inc. (global business research) from 1995 to 2007.
|
|
112 Funds
109 Portfolios
|
|
Arch Chemical (chemicals and allied Products)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kent Dixon
40 East 52nd Street
New York, NY 10022
1937
|
|
Director and Member of the Audit Committee
|
|
1988 to present
|
|
Consultant/Investor since 1988.
|
|
112 Funds
109 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frank J. Fabozzi
40 East 52nd Street
New York, NY 10022
1948
|
|
Director and Member of the Audit Committee
|
|
1988 to present
|
|
Consultant/Editor of The Journal of Portfolio Management;
Yale University, School of Management, Professor in the Practice of Finance
and Becton Fellow since 2006; Adjunct Professor of Finance and Becton Fellow
from 2005 to 2006; Professor in the practice of Finance from 2003 to 2005;
Adjunct Professor of Finance from 1994 to 2003; Author and Editor.
|
|
112 Funds
109 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen F. Feldstein
40 East 52nd Street
New York, NY 10022
1941
|
|
Director
|
|
2005 to present
|
|
President of Economic Studies, Inc. (a Belmont MA-based
private economic consulting firm) since 1987; Chair, Board of Trustees,
McLean Hospital since 2000. Member of the Board of Partners Community
Healthcare, Inc. since 2005; Member of the Board of Partners HealthCare and
Sherrill House since 1990; Trustee, Museum of Fine Arts, Boston since 1992
and a Member of the Visiting Committee to the Harvard University Art Museum
since 2003; Trustee, The Committee for Economic Development (research
organization of business leaders and educators) since 1990; Member of the
Advisory Board to the International School of Business, Brandeis University
since 2002.
|
|
112 Funds
109 Portfolios
|
|
The McClatchy Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Directors serve until their resignation, removal or death,
or until December 31 of the year in which they turn 72.
|
|
|
|
|
|
|
|
|
|
ANNUAL
REPORT
|
DECEMBER 31, 2007
|
39
|
|
|
|
Officers and Directors/Trustees
(unaudited) (continued)
|
|
|
|
|
|
|
|
|
|
|
|
Name,
Address and
Year of Birth
|
|
Position(s)
Held
with Fund
|
|
Length
of
Time Served
|
|
Principal
Occupation(s)
During Past Five Years
|
|
Number
of
BlackRock-
Advised Funds
and Portfolios
Overseen
|
|
Public
Directorships
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interested
Directors
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
T. Flynn
40 East 52nd Street
New York, NY 10022
1939
|
|
Director and
Member of the Audit Committee
|
|
2007 to present
|
|
Chief Financial
Officer of JP Morgan & Co., Inc. from 1990 to 1995 and an employee of JP
Morgan in various capacities from 1967 to 1995.
|
|
111 Funds
108
Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerrold
B. Harris
40 East 52nd Street
New York, NY 10022
1942
|
|
Director
|
|
2007 to present
|
|
President and
Chief Executive Officer, VWR Scientific Products Corporation from 1989 to
1999; Trustee, Ursinus College (education) since 2000; Director, Troemner
LLC (scientific equipment) since 2000.
|
|
111 Funds
108
Portfolios
|
|
BlackRock Kelso
Capital Corp.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R.
Glenn Hubbard
40 East 52nd Street
New York, NY 10022
1958
|
|
Director
|
|
2004 to present
|
|
Dean of Columbia
Business School since 2004; Columbia faculty member since 1988; Co-director
of Columbia Business Schools Entrepreneurship Program 1997 to 2004; Visiting
Professor at the John F. Kennedy School of Government at Harvard University
and the Harvard Business School since 1985, as well as the University of
Chicago since 1994; Deputy Assistant Secretary of the U.S. Treasury
Department for Tax Policy from 1991 to 1993; Chairman of the U.S. Council of
Economic Advisers under the President of the United States from 2001 to 2003.
|
|
112 Funds
109
Portfolios
|
|
ADP (data and
information services), KKR Financial Corporation, Duke Realty, Metropolitan
Life Insurance Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W.
Carl Kester
40 East 52nd Street
New York, NY 10022
1951
|
|
Director and
Member of the Audit Committee
|
|
2007 to present
|
|
Deputy Dean for
Academic Affairs, Harvard Business School since 2006; Mizuho Financial Group,
Professor of Finance, Harvard Business School; Unit Head, Finance from 2005
to 2006; Senior Associate Dean and Chairman of the MBA Program of Harvard
Business School from 1999 to 2005, Member of the faculty of Harvard Business
School since 1981. Independent Consultant since 1978.
|
|
111 Funds
108
Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Karen
P. Robards
40 East 52nd Street
New York, NY 10022
1950
|
|
Director and
Chairperson of the Audit Committee
|
|
2007 to present
|
|
Partner of Robards
& Company, LLC (financial advisory firm) since 1987; Formerly an
investment banker with Morgan Stanley for more than ten years; Director of
Enable Medical Corp. from 1996 to 2005; Director of AtriCure, Inc. (medical
devices) since 2000; Director of Care Investment Trust, Inc. (healthcare
REIT) since 2007; Co-founder and Director of the Cooke Center for Learning
and Development (not-for-profit organization) since 1987.
|
|
111 Funds
108
Portfolios
|
|
AtriCure Inc.
(medical devices) Care Investment Trust, Inc. (healthcare REIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
S. Salomon, Jr.
40 East 52nd Street
New York, NY 10022
1936
|
|
Director and
Member of the Audit Committee
|
|
2007 to present
|
|
Principal of STI
Management (investment adviser) from 1994 to 2005; Chairman and CEO of
Salomon Brothers Asset Management Inc. from 1992 to 1995; Chairman of Salomon
Brothers Equity Mutual Funds from 1992 to 1995; regular columnist with
Forbes Magazine from 1992 to 2002; Director of Stock Research and U.S. Equity
Strategist at Salomon Brothers Inc. from 1975 to 1991; Trustee, Commonfund
from 1980 to 2001.
|
|
111 Funds
108 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
Interested
Directors
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard S. Davis
40 East 52nd Street
New York, NY 10022
1945
|
|
Director
|
|
2007 to present
|
|
Managing Director, BlackRock, Inc. since 2005; Chief
Executive Officer, State Street Research & Management Company from 2000
to 2005; Chairman of the Board of Trustees, State Street Research mutual
funds (SSR Funds) from 2000 to 2005; Senior Vice President, Metropolitan
Life Insurance Company from 1999 to 2000; Chairman SSR Realty from 2000 to
2004.
|
|
184 Funds
289 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Directors serve until their resignation, removal or death,
or until December 31 of the year in which they turn 72.
|
2
|
Messrs. Davis and Gabbay are both interested persons, as
defined in the Investment Company Act of 1940, of the Fund based on their
positions with BlackRock, Inc. and its affiliates. Directors serve until
their resignation, removal or death, or until December 31 of the year in
which they turn 72.
|
|
|
|
|
|
|
|
|
40
|
ANNUAL REPORT
|
DECEMBER 31, 2007
|
|
|
|
|
Officers and Directors/Trustees
(unaudited) (concluded)
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address and
Year of Birth
|
|
Position(s) Held
with Fund
|
|
Length of
Time Served
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
BlackRock-
Advised Funds
and Portfolios
Overseen
|
|
Public Directorships
|
|
|
|
|
|
|
|
|
|
|
|
Advisory Board Member:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Gabbay
40 East 52nd Street
New York, NY 10022
1947
|
|
Director
|
|
2007 to present
|
|
Consultant, BlackRock since 2007; Managing Director,
BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock
Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock
Bond Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end
funds in the Fund complex from 1989 to 2006.
|
|
183 Funds
288 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory Board Member:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roscoe S. Suddarth
3
40 East 52nd Street
New York, NY 10022
1935
|
|
Member of the Advisory Board
|
|
2007
|
|
President, Middle East Institute from 1995 to 2001;
Foreign Service Officer, United States Foreign Service from 1961 to 1995 and
Career Minister from 1989 to 1995; Deputy Inspector General, U.S. Department
of State from 1991 to 1994; U.S. Ambassador to the Hashemite Kingdom of
Jordan from 1987 to 1990.
|
|
111 Funds
108 Portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address and
Year of Birth
|
|
Position(s) Held
with Fund
|
|
Length of
Time Served
|
|
Principal Occupation(s)
During Past Five Years
|
|
|
|
|
|
|
|
Fund Officers
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald C. Burke
40 East 52nd Street
New York, NY 10022
1960
|
|
Fund President and Chief Executive Officer
|
|
2007 to present
|
|
Managing Director of BlackRock, Inc. since 2006; Formerly
Managing Director of Merrill Lynch Investment (MLIM) and Fund Asset
Management, L.P. (FAM) in 2006; First Vice President thereof from 1997 to
2005; Treasurer thereof from 1999 to 2006 and Vice President thereof from
1990 to 1997.
|
|
|
|
|
|
|
|
|
|
Anne F. Ackerley
40 East 52nd Street
New York, NY 10022
1962
|
|
Vice President
|
|
2007 to present
|
|
Managing Director of BlackRock, Inc. since 2000 and First
Vice President and Chief Operating Officer of Mergers and Acquisitions Group
from 1997 to 2000; First Vice President and Chief Operating Officer of Public
Finance Group thereof from 1995 to 1997; Formerly First Vice President of
Emerging Markets Fixed Income Research of Merrill Lynch & Co., Inc. from
1994 to 1995.
|
|
|
|
|
|
|
|
|
|
Neal J. Andrews
40 East 52nd Street
New York, NY 10022
1966
|
|
Chief Financial Officer
|
|
2007 to present
|
|
Managing Director of BlackRock, Inc., since 2006; Formerly
Senior Vice President and Line of Business Head of Fund Accounting and
Administration at PFPC Inc. from 1992 to 2006.
|
|
|
|
|
|
|
|
|
|
Jay M. Fife
40 East 52nd Street
New York, NY 10022
1970
|
|
Treasurer
|
|
2007 to present
|
|
Managing Director of BlackRock, Inc. since 2007 and
Director in 2006; Formerly Assistant Treasurer of the MLIM/FAM advised funds
from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.
|
|
|
|
|
|
|
|
|
|
Brian P. Kindelan
40 East 52nd Street
New York, NY 10022
1959
|
|
Chief Compliance Officer
|
|
2007 to present
|
|
Chief Compliance Officer of the Funds since 2007; Managing
Director and Senior Counsel thereof since January 2005; Director and Senior
Counsel of BlackRock Advisors, Inc. from 2001 to 2004 and Vice President and
Senior Counsel, thereof, from 1998 to 2000; Senior Counsel of PNC Bank Corp.
from 1995 to 1998.
|
|
|
|
|
|
|
|
|
|
Howard Surloff
40 East 52nd Street
New York, NY 10022
1965
|
|
Secretary
|
|
2007 to present
|
|
Managing Director of BlackRock, Inc. and General Counsel of U.S.
Funds at BlackRock, Inc. since 2006; Formerly General Counsel (U.S.)
of Goldman Sachs Asset Management, L.P. from 1993 to 2006.
|
|
|
|
|
|
|
|
|
|
|
2
|
Messrs. Davis and Gabbay are both interested persons, as
defined in the Investment Company Act of 1940, of the Fund based on their
positions with BlackRock, Inc. and its affiliates. Directors serve until
their resignation, removal or death, or until December 31 of the year in
which they turn 72.
|
3
|
Roscoe Suddarth resigned from the Advisory Board of the
Fund, effective December 31, 2007.
|
4
|
Officers of the Fund serve at the pleasure of the Board of
Directors.
|
|
|
|
|
|
|
|
|
|
ANNUAL
REPORT
|
DECEMBER 31, 2007
|
41
|
[This Page Intentionally Left Blank]
[This Page Intentionally Left Blank]
[This Page Intentionally Left Blank]
|
|
|
BlackRock Closed-End Funds
|
|
Investment
Advisor
BlackRock Advisors, LLC
Wilmington, DE 19809
(800) 227-7BFM
|
|
Sub-Advisor
1
BlackRock Financial Management, Inc.
New York, NY 10022
|
|
Accounting
Agent and Custodian
State Street Bank and Trust Company
Boston, MA 02111
|
|
Transfer
Agent
Computershare Trust Company, N.A.
Canton, MA 02021
(800) 699-1BFM
|
|
Auction
Agent
1
Bank of New York
New York, NY 10286
|
|
Independent
Registered Public Accounting Firm
Deloitte & Touche LLP
Boston, MA 02116
|
|
Legal
Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
New York, NY 10036
|
|
Legal
Counsel Independent Directors/Trustees
Debevoise & Plimpton LLP
New York, NY 10022
|
|
|
|
1
|
For Global and Preferred
Opportunity.
|
This
report is for shareholder information. This is not a prospectus intended for
use in the purchase or sale of Trust shares. Statements and other information
contained in this report are as dated and are subject to change.
BlackRock
Closed-End Funds
c/o BlackRock Advisors, LLC
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
The Trusts
will mail only one copy of shareholder documents, including annual and
semi-annual reports and proxy statements, to shareholders with multiple
accounts at the same address. This practice is commonly called householding
and 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 contact the Trusts at (800) 699-1BFM.
A
description of the policies and procedures that the Trusts use to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-(800)-699-1BFM; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commissions Web site
at http://www.sec.gov.
Information
about how the Trusts vote proxies relating to securities held in the Trusts
portfolios during the most recent 12-month period ended June 30 is available
(1) at www.blackrock.com and (2) on the Securities and Exchange Commissions
website at http://www.sec.gov.
The Trusts
file their complete schedules of portfolio holdings with the Securities and
Exchange Commission (SEC) for the first and third quarters of each fiscal
year on Form N-Q. The Trusts Forms N-Q are available on the SECs Web site at
http://www.sec.gov. The Trusts Forms N-Q may also be reviewed and copied at
the SECs Public Reference Room in Washington, DC. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The
Trusts Form N-Q, may also be obtained upon request and without charge by
calling 1-(800)-699-1BFM.
|
|
|
|
|
|
|
|
|
ANNUAL REPORT
|
DECEMBER 31, 2007
|
|
|
|
This report is for shareholder
information. This is not a prospectus intended for
use in the purchase or
sale of Trust shares. Statements and other information
contained in this
report are as dated and are subject to change.
|
|
|
|
CEF-ANN-5-1207
|
|
|
|