BLACKROCK FLOATING RATE INCOME TRUST
Table of Contents

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: 811-21566

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

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Floating

Rate Income Trust, 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 10/31/2013

Date of reporting period: 10/31/2013


Table of Contents

Item 1 –

   Report to Stockholders


Table of Contents

OCTOBER 31, 2013

 

 

 

 

 

ANNUAL REPORT

 

    LOGO

 

BlackRock Credit Allocation Income Trust (BTZ)

BlackRock Floating Rate Income Trust (BGT)

BlackRock Multi-Sector Income Trust (BIT)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents
Table of Contents     

 

     Page  

Dear Shareholder

    3   

Annual Report:

 

Trust Summaries

    4   

The Benefits and Risks of Leveraging

    10   

Derivative Financial Instruments

    10   
Financial Statements:  

Schedules of Investments

    11   

Statements of Assets and Liabilities

    50   

Statements of Operations

    51   

Statements of Changes in Net Assets

    52   

Statements of Cash Flows

    54   

Financial Highlights

    55   

Notes to Financial Statements

    58   

Report of Independent Registered Public Accounting Firm

    72   

Important Tax Information

   
72
  

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

    73   

Automatic Dividend Reinvestment Plans

    77   

Officers and Trustees

    78   

Additional Information

    81   

 

                
2    ANNUAL REPORT    OCTOBER 31, 2013   


Table of Contents
Dear Shareholder

 

Financial markets were volatile as 2012 drew to a close, with investors growing increasingly concerned over the possible implementation of pre-mandated tax increases and spending cuts known as the “fiscal cliff.” However, a last-minute tax deal averted the potential crisis and allowed markets to get off to a strong start in 2013. Money that had been pulled to the sidelines amid year-end tax-rate uncertainty poured back into the markets in January. Key indicators signaling modest but broad-based improvements in the world’s major economies, coupled with the absence of negative headlines from Europe, fostered an aura of comfort for investors. Global equities surged, while rising US Treasury yields pressured high quality fixed income assets. (Bond prices fall when yields rise.)

Global economic momentum slowed in February, however, and the pace of the rally moderated. In the months that followed, US stocks outperformed international stocks, as America showed greater stability compared to most other regions. Slow, but positive, growth was sufficient to support corporate earnings, while uncomfortably high unemployment reinforced expectations that the Federal Reserve would keep its asset purchase program intact and interest rates low. International markets experienced higher levels of volatility given a resurgence of political instability in Italy, a severe banking crisis in Cyprus and a generally poor outlook for European economies, many of which were mired in recession. Emerging markets significantly lagged the rest of the world as growth in these economies, particularly in China and Brazil, fell short of expectations.

In May, the Fed Chairman commented on the possibility of beginning to gradually reduce – or “taper” – the central bank’s asset purchase program before the end of 2013. Investors around the world retreated from higher risk assets in response. Markets rebounded in late June when the tone of the US central bank turned more dovish, and improving economic indicators and better corporate earnings helped extend gains through July.

Markets slumped again in August as investors became wary of looming macro risks. Mixed economic data stirred worries about global growth and uncertainty about when and how much the Fed would scale back on stimulus. Also weighing on investors’ minds was the escalation of the revolution in Egypt and the civil war in Syria, both of which fueled higher oil prices, an additional headwind for global economic growth.

September was surprisingly positive for investors, thanks to the easing of several key risks. Most important, the Fed defied market expectations with its decision to delay tapering. Additionally, the more hawkish candidate to become the next Fed Chairman, Larry Summers, withdrew from the race. On the geopolitical front, turmoil in Egypt and Syria subsided. In Europe, the re-election of Angela Merkel as Chancellor of Germany was welcomed as a continuation of the status quo. High levels of volatility returned in late September when the Treasury Department warned that the US national debt would breach its statutory maximum soon after Oct. 17. Political brinksmanship led to a partial government shutdown, roiling global financial markets through the first half of October, but the rally quickly resumed with a last-minute compromise to reopen the government and extend the debt ceiling until early 2014.

Though periods of heightened uncertainty drove high levels of market volatility over the past year, riskier asset classes generally outperformed lower-risk investments. Developed market equities generated the highest returns for the 6- and 12-month periods ended Oct. 31, with particular strength coming from US small-cap stocks. Emerging markets posted smaller, albeit positive returns after struggling with slowing growth and weakening currencies in the first half of 2013. Rising interest rates resulted in poor performance for US Treasury bonds and other higher-quality sectors such as tax-exempt municipals and investment grade corporate bonds. High yield bonds, on the other hand, moved higher as income-oriented investors sought meaningful returns in the low-rate environment. Short-term interest rates remained near zero, keeping yields on money market securities near historical lows.

At BlackRock, we believe investors need to think globally and extend their scope across a broader array of asset classes and be prepared to move freely as market conditions change over time. We encourage you to talk with your financial advisor and visit www.blackrock.com for further insight about investing in today’s world.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

“Though periods of heightened uncertainty drove high levels of market volatility over the past year, riskier asset classes generally outperformed lower-risk investments.”

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of October 31, 2013  
    6-month     12-month  

US large cap equities
(S&P 500® Index)

    11.14     27.18

US small cap equities
(Russell 2000® Index)

    16.90        36.28   

International equities
(MSCI Europe, Australasia, Far East Index)

    8.53        26.88   

Emerging market equities
(MSCI Emerging Markets Index)

    1.18        6.53   

3-month Treasury bill
(BofA Merrill Lynch
3-Month US Treasury
Bill Index)

    0.03        0.09   

US Treasury securities
(BofA Merrill Lynch 10-Year US Treasury Index)

    (6.07     (4.64

US investment grade
bonds (Barclays US Aggregate Bond Index)

    (1.97     (1.08

Tax-exempt municipal
bonds (S&P Municipal Bond Index)

    (3.63     (1.69

US high yield bonds

(Barclays US Corporate High Yield 2% Issuer Capped Index)

    1.50        8.86   
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.    

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Table of Contents
Trust Summary as of October 31, 2013    BlackRock Credit Allocation Income Trust

 

Trust Overview

BlackRock Credit Allocation Income Trust’s (BTZ) (the “Trust”) investment objective is to provide current income, current gains and capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in credit-related securities, including, but not limited to, investment grade corporate bonds, high yield bonds (commonly referred to as “junk” bonds), bank loans, preferred securities or convertible bonds or derivatives with economic characteristics similar to these credit-related securities. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

 

Portfolio Management Commentary

 

Ÿ  

On December 10, 2012, the Trust acquired substantially all of the assets and assumed substantially all of the liabilities of BlackRock Credit Allocation Income Trust I, Inc., BlackRock Credit Allocation Income Trust II, Inc. and BlackRock Credit Allocation Income Trust III in exchange for newly issued shares of the Trust in a reorganization transaction. On February 11, 2013, the Trust changed its name from “BlackRock Credit Allocation Income Trust IV” to “BlackRock Credit Allocation Income Trust”.

How did the Trust perform?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned (2.01)% based on market price and 4.86% based on net asset value (“NAV”). For the same period, the closed-end Lipper Corporate BBB-Rated Debt Funds (Leveraged) category posted an average return of (4.42)% based on market price and 3.27% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

Ÿ  

The Trust’s heavy exposure to credit sectors had a positive impact on performance as risk assets broadly rallied during the period. In this positive market environment, the Trust’s high level of leverage enhanced results. A preference for companies generating cash flows sourced from the US domestic market proved beneficial, as did holding large allocations to the higher-yielding credit sectors such as high yield bonds, subordinated financials and lower-quality investment grade bonds. The Trust’s use of leverage to achieve greater exposure to high yield bonds boosted returns. Additionally, in the investment grade space, security selection within industrials and a preference for bank capital securities aided performance.

 

Ÿ  

While the slow-growth, low-rate environment has been conducive for positive performance in credit sectors, the rapid rise in interest rates during the second quarter of 2013 drove negative returns across fixed income markets broadly. (Bond prices fall as interest rates rise.) Given the Trust’s sensitivity to interest rate movements, this interest rate-driven market sell-off hindered performance for the period. Additionally, a small allocation to emerging market securities detracted from results given the recent underperformance of emerging versus developed markets.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, the Trust was tactical in rotating in and out of sectors and individual credit names, but overall, did not make major changes to its overall positioning. While it became clear that the US Federal Reserve is moving to closer to reducing the scale of its asset purchase program, the slow-growth paradigm in the United States has yet to prove sufficient to warrant a major change in central bank monetary policy and, as a result, credit sectors have been well supported. In this scenario where corporate funding is cheap and re-levering is a reality, the Trust remained focused on bottom-up security selection within industrials given the event-driven headline risk for a number of credits in that space.

Describe portfolio positioning at period end.

 

Ÿ  

As of period end, the Trust continued to maintain its allocations to high yield, financials and capital securities. The Trust continued to favor financials over industrials given the rising event risk in the industrial space. Additionally, the Trust retained a bias toward companies with US-sourced cash flows while minimizing exposure to emerging markets.

 

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.

 

                
4    ANNUAL REPORT    OCTOBER 31, 2013   


Table of Contents
     BlackRock Credit Allocation Income Trust

 

 

Trust Information

Symbol on New York Stock Exchange (“NYSE”)

   BTZ

Initial Offering Date

   December 27, 2006

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($12.97)1

   7.45%

Current Monthly Distribution per Common Share2

   $0.0805

Current Annualized Distribution per Common Share2

   $0.9660

Economic Leverage as of October 31, 20133

   33%

 

  1   

Current Distribution Rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See the Additional Information — Section 19(a) Notices section for the estimated sources and character of distributions. Past performance does not guarantee future results.

 

  2   

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

 

  3   

Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 10.

 

Market Price and Net Asset Value Per Share Summary
           
        10/31/13        10/31/12        Change        High        Low  

Market Price

       $12.97           $14.23           (8.85)%           $14.44           $12.13   

Net Asset Value

       $14.99           $15.37           (2.47)%           $15.77           $14.45   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Trust’s Long-Term Investments
Portfolio Composition   10/31/13     10/31/12  

Corporate Bonds

    84     80

Preferred Securities

    14        16   

Municipal Bonds

    1        1   

Asset-Backed Securities

    1        1   

US Treasury Obligations

           2   

 

Credit Quality Allocation4   10/31/13     10/31/12  

AAA/Aaa5

           3

AA/Aa

    1     2   

A

    16        25   

BBB/Baa

    43        39   

BB/Ba

    24        18   

B

    13        10   

CCC/Caa

           1   

Not Rated

    3        2   

 

  4   

Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors Service (“Moody’s”) ratings.

 

  5   

Includes US Government Sponsored Agency Securities and/or US Treasury Obligations, which were deemed AAA by the investment advisor.

 

                
   ANNUAL REPORT    OCTOBER 31, 2013    5


Table of Contents
Trust Summary as of October 31, 2013    BlackRock Floating Rate Income Trust

 

Trust Overview

BlackRock Floating Rate Income Trust’s (BGT) (the “Trust”) primary investment objective is to provide a high level of current income. The Trust’s secondary investment objective is to seek the preservation of capital. The Trust seeks to achieve its investment objectives by investing primarily, under normal conditions, at least 80% of its assets in floating and variable rate instruments of US and non-US issuers, including a substantial portion of its assets in global floating and variable rate securities including senior secured floating rate loans made to corporate and other business entities. Under normal market conditions, the Trust expects that the average effective duration of its portfolio will be no more than 1.5 years. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objectives will be achieved.

 

 

Portfolio Management Commentary     

 

How did the Trust perform?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 0.60% based on market price and 9.37% based on NAV. For the same period, the closed-end Lipper Loan Participation Funds category posted an average return of 2.92% based on market price and 9.12% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

Ÿ  

Security selection in the technology and gaming sectors contributed positively to results, as did the Trust’s tactical allocation to fixed-rate high yield corporate bonds, which outperformed floating rate loan interests (i.e., bank loans) over the period. The Trust’s preference for non-US loan credits versus emerging market sovereign bonds proved beneficial as emerging market debt declined over the period.

 

Ÿ  

Conversely, security selection in the electric and media non-cable sectors detracted from performance. Notably, the Trust’s larger media non-cable issuer positions underperformed lower-rated and/or distressed issuers within the sector.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, the Trust added to positions in the gaming and technology sectors. The Trust maintained its focus on the higher quality portions of the loan market in terms of loan structure, liquidity and overall credit quality. The Trust sought issuers with attractive risk-reward characteristics and superior fundamentals, while limiting exposure to lower-rated portions of the market where the investment advisor believes there is a general risk-reward imbalance. As the average loan traded at or just above par during the period (leaving little or no potential for price appreciation), the Trust placed an emphasis on investing in strong companies that are better positioned to pay their debts despite the slow growth environment.

 

Ÿ  

The bank loan market was strong in 2012 and continued to rally in 2013 with much of the upswing attributable to record inflows from investors seeking to reduce interest rate risk in their fixed income portfolios. Despite the positive market environment, the Trust did not deviate from its core investment style, which is centered on improving the yield characteristics of an investor’s portfolio while seeking to minimize exposure to macro risks.

Describe portfolio positioning at period end.

 

Ÿ  

At period end, the Trust held 83% of its total portfolio in floating rate loan interests and 13% in corporate bonds, with the remainder invested in a mix of asset-backed securities and common stocks. The Trust’s highest-conviction holdings included Caesars Entertainment Operating Co., Inc. (gaming), Hilton Worldwide Finance LLC (lodging) and Alliance Boots Holdings Ltd. (retailers). The Trust ended the period with leverage at 30% of its total managed assets.

 

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    ANNUAL REPORT    OCTOBER 31, 2013   


Table of Contents
     BlackRock Floating Rate Income Trust

 

 

Trust Information

Symbol on NYSE

   BGT

Initial Offering Date

   August 30, 2004

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($14.12)1

   6.16%

Current Monthly Distribution per Common Share2

   $0.0725

Current Annualized Distribution per Common Share2

   $0.8700

Economic Leverage as of October 31, 20133

   30%

 

1   

Current Distribution Rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. Past performance does not guarantee future results.

 

2   

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

 

3   

Represents the loan outstanding as a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 10.

 

Market Price and Net Asset Value Per Share Summary                                        
           
      10/31/13      10/31/12      Change      High      Low  

Market Price

     $14.12         $15.07         (6.30)%         $16.37         $13.90   

Net Asset Value

     $14.79         $14.52         1.86%         $14.93         $14.45   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Trust’s Long-Term Investments

The following charts show the portfolio composition of the Trust’s long-term investments and credit quality allocations of the Trust’s corporate bonds:

Portfolio Composition    10/31/13     10/31/12  

Floating Rate Loan Interests

     83     80

Corporate Bonds

     13        16   

Asset-Backed Securities

     3        2   

Common Stocks

     1        1   

Foreign Agency Obligations

            1   
Credit Quality Allocation4    10/31/13     10/31/12  

BBB/Baa

     10     19

BB/Ba

     21        36   

B

     67        42   

CCC/Caa

            2   

Not Rated

     2        1   

 

4   

Using the higher of S&P's or Moody's ratings.

 

                
   ANNUAL REPORT    OCTOBER 31, 2013    7


Table of Contents
Trust Summary as of October 31, 2013    BlackRock Multi-Sector Income Trust

 

Trust Overview     

BlackRock Multi-Sector Income Trust’s (BIT) (the “Trust”) primary investment objective is to seek high current income, with a secondary objective of capital appreciation. The Trust seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its assets in loan and debt instruments and other investments with similar economic characteristics. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

 

Portfolio Management Commentary

 

How did the Trust perform?

 

Ÿ  

For the period beginning with the Trust’s commencement date of February 27, 2013 through October 31, 2013, the Trust returned (10.66)% based on market price and 4.04% based on NAV. For the period February 28, 2013 through October 31, 2013, the closed-end Lipper General Bond Funds category posted an average return of (5.19)% based on market price and 1.31% based on NAV. All returns reflect reinvestment of dividends. The Trust ended the period trading at a discount to NAV, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

Ÿ  

The largest contributor to the Trust’s positive performance was its exposure to non-agency residential mortgage-backed securities (“MBS”), with notable strength from positions in subprime mortgages. The Trust also benefited from income generated by its holdings in the high yield and investment grade sectors. Additional positive performance came from the Trust’s positions in securitized debt sectors, including asset-backed securities (“ABS”) and commercial mortgage-backed securities (“CMBS”).

 

Ÿ  

After interest rates initially spiked in June in response to comments from the US Federal Reserve (“Fed”) regarding the possibility of gradually reducing the central bank’s asset purchase program (a process known as “tapering”) before the end of 2013, the lack of price recovery in corporate bonds was the main detractor from performance, as the Trust only benefited from the income component (coupons) of these bonds.

Describe recent portfolio activity.

 

Ÿ  

The Trust began the period investing the proceeds of its offering in high yield corporate bonds, non-agency MBS and securitized debt, including ABS and CMBS, as well as investment grade credit.

 

Ÿ  

Given its focus on spread sectors, the Trust increased its allocations in ABS and CMBS, and to a lesser extent, in investment grade credit, to take advantage of attractive prices resulting from the initial drop in bond prices in June. In addition, favorable supply/demand dynamics helped support these sectors during the second half of the period. This sector positioning was particularly helpful in the aftermath of the Fed’s September decision to delay tapering its stimulus program and the Trust further increased exposure to high yield and securitized assets, particularly ABS, in the ensuing risk-asset rally.

 

Ÿ  

Throughout the eight-month period, the Trust maintained a high level of leverage in order to maximize its income generation potential. Given the low yield environment earlier in 2013, the Trust’s distribution yield declined over the period as maturing higher-yielding securities were replaced with lower-yielding issuance.

Describe portfolio positioning at period end.

 

Ÿ  

In light of the Fed refraining from tapering stimulus at its September 2013 meeting and economic data that is only slowly improving, as of period end, the Trust was positioned to benefit from the continuation of a positive market environment for risk assets in which spread sectors perform well. Accordingly, the Trust ended the period with high exposure to spread sectors such as high yield credit, as well as ABS and investment grade credit.

 

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    ANNUAL REPORT    OCTOBER 31, 2013   


Table of Contents
     BlackRock Multi-Sector Income Trust

 

 

Trust Information      

Symbol on NYSE

   BIT

Initial Offering Date

   February 27, 2013

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($17.04)1

   8.22%

Current Monthly Distribution per Common Share2

   $0.1167

Current Annualized Distribution per Common Share2

   $1.4004

Economic Leverage as of October 31, 20133

   43%

 

1   

Current Distribution Rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See the financial highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 

2   

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

 

3   

Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 10.

 

Market Price and Net Asset Value Per Share Summary                                        
           
      10/31/13      2/27/134      Change      High      Low  

Market Price

     $17.04         $20.00         (14.80)%         $20.50         $15.51   

Net Asset Value

     $18.95         $19.10         (0.79)%         $19.81         $18.00   

 

Market Price and Net Asset Value History Since Inception

 

LOGO

 

  4   

Commencement of operations.

 

Overview of the Trust’s Long-Term Investments
Portfolio Composition    10/31/13  

Corporate Bonds

     42

Non-Agency Mortgage-Backed Securities

     25   

Asset-Backed Securities

     18   

Preferred Securities

     9   

Floating Rate Loan Interests

     5   

Foreign Agency Obligations

     1   

 

Credit Quality Allocation5    10/31/13  

AA/Aa

     1

A

     3   

BBB/Baa

     23   

BB/Ba

     33   

B

     31   

CCC/Caa

     6   

Not Rated

     3   

 

5   

Using the higher of S&P’s or Moody’s ratings.

 

                
   ANNUAL REPORT    OCTOBER 31, 2013    9


Table of Contents
The Benefits and Risks of Leveraging     

 

 

The Trusts may utilize leverage to seek to enhance the yield and NAV of their common shares (“Common Shares”). However, these objectives cannot be achieved in all interest rate environments.

The Trusts may utilize leverage by borrowing through a credit facility and/or entering into reverse repurchase agreements. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage, which will be based on short-term interest rates, will normally 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 Trust’s shareholders will benefit from the incremental net income.

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

To illustrate these concepts, assume a Trust’s capitalization is $100 million and it borrows for an additional $30 million, creating a total value of $130 million available for investment in long-term securities. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Trust pays borrowing costs and interest expense on the $30 million of borrowings based on the lower short-term interest rates. At the same time, the securities purchased by the Trust with assets received from the borrowings earn income based on long-term interest rates. In this case, the borrowing costs and interest expense of the borrowings is significantly lower than the income earned on the Trust’s long-term investments, and therefore the Trust’s shareholders are the beneficiaries of the incremental net income.

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

Furthermore, the value of the 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 redemption value of the Trusts’ borrowings does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trusts’ NAV positively or negatively in addition to the impact on Trust performance from borrowings discussed above.

The use of leverage may enhance opportunities for increased income to the Trusts, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes in the Trusts’ NAVs, market prices and dividend rates than comparable portfolios without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, the 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 Trust’s net income will be less than if leverage had not been used, and therefore the amount available for distribution to shareholders will be reduced. Each 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 a Trust to incur losses. The use of leverage may limit each Trust’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Trust will incur expenses in connection with the use of leverage, all of which are borne by shareholders and may reduce income.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Trusts are permitted to issue senior securities representing indebtedness up to 33 1/3% of their total managed assets (each Trust’s net assets plus the proceeds of any outstanding borrowings). If the Trusts segregate liquid assets having a value not less than the repurchase price (including accrued interest), a reverse repurchase agreement will not be considered a senior security and therefore will not be subject to this limitation. In addition, each Trust voluntarily limits its aggregate economic leverage to 50% of its managed assets. As of October 31, 2013, the Trusts had aggregate economic leverage from reverse repurchase agreements and/or borrowings through a credit facility as a percentage of their total managed assets as follows:

 

      Percent of
Economic
Leverage
 

BTZ

     33

BGT

     30

BIT

     43

 

Derivative Financial Instruments     

 

The Trusts may invest in various derivative financial instruments, including financial futures contracts, foreign currency exchange contracts, options and swaps, as specified in Note 4 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to hedge market, equity, credit, interest rate and/or foreign currency exchange rate risks. Derivative financial instruments 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 derivative financial instrument. The Trusts’ ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require a Trust to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Trust can realize on an investment, may result in lower dividends paid to shareholders or may cause a Trust to hold an investment that it might otherwise sell. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

                
10    ANNUAL REPORT    OCTOBER 31, 2013   


Table of Contents

Schedule of Investments October 31, 2013

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Asset-Backed Securities           Par  
(000)
    Value  

321 Henderson Receivables I LLC, Series 2012-1A, Class A,
4.21%, 2/16/65 (b)

    USD         2,805      $ 2,919,637   

Atrium CDO Corp., Series 5A, Class A4,
0.65%, 7/20/20 (a)(b)

       9,000        8,505,000   

SLM Student Loan Trust, Series 2004-B, Class A2, 0.45%, 6/15/21 (a)

             4,153        4,086,906   
Total Asset-Backed Securities1.0%                      15,511,543   
      
                          
Corporate Bonds                      

Aerospace & Defense — 0.5%

      

Bombardier, Inc., 4.25%, 1/15/16 (b)

       1,390        1,449,075   

Huntington Ingalls Industries, Inc.:

      

6.88%, 3/15/18

       1,430        1,539,038   

7.13%, 3/15/21

       2,000        2,167,500   

Kratos Defense & Security Solutions, Inc.,
10.00%, 6/01/17

       3,418        3,725,620   
      

 

 

 
                       8,881,233   

Airlines — 0.7%

      

Continental Airlines Pass-Through Trust:

      

Series 2009-2, Class B, 9.25%, 11/10/18

       3,339        3,681,354   

Series 2012-3, Class C, 6.13%, 4/29/18

       2,040        2,096,100   

Delta Air Lines Pass-Through Trust, Series 2002-1,
Class G-1, 6.72%, 1/02/23

       3,582        3,940,307   

Virgin Australia 2013-1B Trust, 6.00%, 10/23/20 (b)

       1,950        1,970,121   
      

 

 

 
                       11,687,882   

Auto Components — 1.4%

      

Delphi Corp.:

      

6.13%, 5/15/21

       870        957,000   

5.00%, 2/15/23

       4,600        4,830,000   

Ford Motor Co., 7.45%, 7/16/31

       3,660        4,567,526   

Icahn Enterprises LP/Icahn Enterprises Finance Corp., 8.00%, 1/15/18

       9,200        9,648,500   

Schaeffler Finance BV, 4.75%, 5/15/21 (b)

       2,470        2,463,825   
      

 

 

 
                       22,466,851   

Automobiles — 0.2%

      

General Motors Co. (b):

      

4.88%, 10/02/23

       1,875        1,898,438   

6.25%, 10/02/43

       940        977,600   
      

 

 

 
                       2,876,038   

Beverages — 0.2%

      

Silgan Holdings, Inc., 5.50%, 2/01/22 (b)

             3,004        2,988,980   

Building Products — 0.5%

      

Building Materials Corp. of America (b):

      

7.00%, 2/15/20

       1,430        1,537,250   

6.75%, 5/01/21

       3,600        3,915,000   

Cemex SAB de CV, 5.88%, 3/25/19 (b)

       440        430,650   

Momentive Performance Materials, Inc.,
8.88%, 10/15/20

       1,030        1,089,225   
Corporate Bonds           Par  
(000)
    Value  

Building Products (concluded)

      

Texas Industries, Inc., 9.25%, 8/15/20

    USD         1,342      $ 1,482,910   
      

 

 

 
                       8,455,035   

Capital Markets — 4.5%

      

Ameriprise Financial, Inc., 5.30%, 3/15/20 (c)

       10,000        11,457,570   

Blackstone Holdings Finance Co. LLC,
4.75%, 2/15/23 (b)(c)

       2,800        2,962,767   

The Goldman Sachs Group, Inc. (c):

      

6.25%, 9/01/17

       625        722,980   

6.15%, 4/01/18

       1,650        1,912,340   

7.50%, 2/15/19

       5,165        6,342,067   

5.25%, 7/27/21

       1,175        1,296,929   

5.75%, 1/24/22

       5,500        6,236,890   

6.25%, 2/01/41

       15,000        17,360,910   

KCG Holdings, Inc., 8.25%, 6/15/18 (b)

       773        786,527   

Morgan Stanley (c):

      

5.63%, 9/23/19

       6,770        7,725,247   

5.75%, 1/25/21

       5,495        6,291,517   

5.50%, 7/28/21

       2,695        3,033,190   

UBS AG (c):

      

5.88%, 7/15/16

       3,450        3,845,463   

Series 001, 2.25%, 1/28/14

       3,170        3,184,208   
      

 

 

 
                       73,158,605   

Chemicals — 3.0%

      

Ashland, Inc., 3.88%, 4/15/18

       1,745        1,753,725   

Axiall Corp., 4.88%, 5/15/23 (b)

       367        351,861   

Basell Finance Co. BV, 8.10%, 3/15/27 (b)

       6,000        7,835,574   

Celanese US Holdings LLC, 5.88%, 6/15/21

       2,615        2,798,050   

Chemtura Corp., 5.75%, 7/15/21

       632        639,900   

Eagle Spinco, Inc., 4.63%, 2/15/21 (b)

       2,370        2,292,975   

Huntsman International LLC:

      

4.88%, 11/15/20

       1,385        1,378,075   

8.63%, 3/15/21 (c)

       2,000        2,245,000   

Ineos Finance PLC (b):

      

8.38%, 2/15/19

       255        284,325   

7.50%, 5/01/20

       2,080        2,272,400   

Linde Finance BV, 7.38%, 7/14/66 (a)

    EUR         2,086        3,200,459   

LSB Industries, Inc., 7.75%, 8/01/19 (b)

    USD         569        601,718   

LyondellBasell Industries NV,
5.75%, 4/15/24 (c)

       6,370        7,294,421   

NOVA Chemicals Corp., 5.25%, 8/01/23 (b)

       2,277        2,322,540   

Nufarm Australia Ltd., 6.38%, 10/15/19 (b)

       990        1,019,700   

PetroLogistics LP/PetroLogistics Finance Corp., 6.25%, 4/01/20 (b)

       885        885,000   

Rockwood Specialties Group, Inc., 4.63%, 10/15/20

       9,256        9,510,540   

Tronox Finance LLC, 6.38%, 8/15/20 (c)

       737        751,740   

US Coatings Acquisition, Inc./Flash Dutch 2 BV, 7.38%, 5/01/21 (b)

       617        655,562   
      

 

 

 
                       48,093,565   

Commercial Banks — 5.6%

      

Associated Banc-Corp, 5.13%, 3/28/16 (c)

       7,430        8,014,451   

BPCE SA, 5.70%, 10/22/23 (b)

       7,000        7,178,990   

 

Portfolio Abbreviations

 

To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:      ARB    Airport Revenue Bonds    FKA    Formerly Known As
     CAD    Canadian Dollar    GBP    British Pound
     CHF    Swiss Franc    LIBOR    London Interbank Offered Rate
     CLO    Collateralized Loan Obligation    PIK    Payment-In-Kind
     DIP    Debtor-In-Possession    RB    Revenue Bonds
     ETF    Exchange-Traded Fund    SPDR    Standard & Poor’s Depository Receipts
     EUR    Euro    USD    US Dollar

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    OCTOBER 31, 2013    11


Table of Contents

Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds           Par  
(000)
    Value  

Commercial Banks (concluded)

      

CIT Group, Inc.:

      

4.25%, 8/15/17

    USD         4,600      $ 4,824,250   

5.25%, 3/15/18

       4,030        4,357,438   

6.63%, 4/01/18 (b)

       335        379,806   

5.50%, 2/15/19 (b)

       5,147        5,571,628   

City National Corp., 5.25%, 9/15/20 (c)

       2,900        3,138,392   

Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, 3.95%, 11/09/22 (c)

       3,775        3,690,017   

Credit Suisse AG, 6.50%, 8/08/23 (b)

       12,000        12,808,800   

Discover Bank:

      

8.70%, 11/18/19

       748        954,651   

4.20%, 8/08/23

       4,460        4,522,855   

Fifth Third Bancorp, 5.10% (a)(d)

       5,000        4,500,000   

HSBC Finance Corp., 6.68%, 1/15/21 (c)

       5,150        5,985,206   

Regions Financial Corp., 5.75%, 6/15/15

       6,110        6,531,731   

RESPARCS Funding LP I, 8.00% (d)

       4,000        1,120,000   

Santander Holdings USA, Inc., 3.00%, 9/24/15

       3,750        3,861,469   

SVB Financial Group, 5.38%, 9/15/20 (c)

       2,850        3,151,239   

Wachovia Bank NA, 6.60%, 1/15/38 (c)

       3,620        4,518,397   

Wells Fargo & Co. (c):

      

3.45%, 2/13/23

       2,325        2,212,186   

4.13%, 8/15/23

       4,000        4,000,336   
      

 

 

 
                       91,321,842   

Commercial Services & Supplies — 3.2%

      

ADS Waste Holdings, Inc., 8.25%, 10/01/20 (b)

       1,003        1,053,150   

The ADT Corp., 6.25%, 10/15/21 (b)

       1,667        1,769,104   

Aviation Capital Group Corp. (b):

      

7.13%, 10/15/20 (c)

       31,000        34,410,000   

6.75%, 4/06/21

       7,850        8,458,375   

Covanta Holding Corp., 6.38%, 10/01/22

       2,245        2,319,963   

Mobile Mini, Inc., 7.88%, 12/01/20

       930        1,020,675   

West Corp., 8.63%, 10/01/18

       2,287        2,492,830   
      

 

 

 
                       51,524,097   

Communications Equipment — 0.9%

      

Avaya, Inc., 10.50%, 3/01/21 (b)

       1,826        1,588,620   

Brocade Communications Systems, Inc., 6.88%, 1/15/20

       8,695        9,368,862   

CommScope, Inc., 8.25%, 1/15/19 (b)

       650        713,375   

Zayo Group LLC/Zayo Capital, Inc.,
8.13%, 1/01/20

       2,400        2,628,000   
      

 

 

 
                       14,298,857   

Construction & Engineering — 0.1%

      

Safway Group Holding LLC/Safway Finance Corp., 7.00%, 5/15/18 (b)

       673        696,555   

Weekley Homes LLC/Weekley Finance Corp., 6.00%, 2/01/23 (b)

       825        798,188   
      

 

 

 
                       1,494,743   

Construction Materials — 1.0%

      

HD Supply, Inc.:

      

8.13%, 4/15/19

       7,300        8,159,210   

11.00%, 4/15/20

       2,740        3,288,548   

7.50%, 7/15/20 (b)

       2,905        3,064,775   

Vulcan Materials Co., 7.00%, 6/15/18

       1,380        1,559,400   
      

 

 

 
                       16,071,933   

Consumer Finance — 4.0%

      

Capital One Bank USA NA, 3.38%, 2/15/23

       11,610        11,066,188   

Countrywide Financial Corp., 6.25%, 5/15/16 (c)

       8,069        8,938,362   

Discover Financial Services, 3.85%, 11/21/22

       3,252        3,154,326   

Experian Finance PLC, 2.38%, 6/15/17 (b)(c)

       2,550        2,539,815   

Ford Motor Credit Co. LLC:

      

8.00%, 12/15/16

       4,000        4,751,484   

5.88%, 8/02/21

       9,420        10,792,240   
Corporate Bonds           Par  
(000)
    Value  

Consumer Finance (concluded)

      

Inmarsat Finance PLC, 7.38%, 12/01/17 (b)

    USD         5,620      5,844,800   

SLM Corp.:

      

3.88%, 9/10/15

       5,000        5,175,000   

6.25%, 1/25/16

       11,620        12,651,275   
      

 

 

 
                       64,913,490   

Containers & Packaging — 1.3%

      

Ardagh Packaging Finance PLC (b):

      

7.38%, 10/15/17

       410        440,750   

9.13%, 10/15/20

       1,130        1,217,575   

Ball Corp., 6.75%, 9/15/20

       7,360        8,004,000   

Bemis Co., Inc., 6.80%, 8/01/19

       200        238,840   

Cascades, Inc., 7.75%, 12/15/17

       447        465,998   

Crown Americas LLC/Crown Americas Capital Corp. III, 6.25%, 2/01/21

       3,128        3,315,680   

Graphic Packaging International, Inc., 4.75%, 4/15/21

       1,925        1,900,937   

Sealed Air Corp. (b):

      

6.50%, 12/01/20

       2,330        2,530,962   

8.38%, 9/15/21

       700        801,500   

Smurfit Kappa Acquisitions, 4.88%, 9/15/18 (b)

       1,740        1,783,500   
      

 

 

 
                       20,699,742   

Diversified Consumer Services — 0.5%

      

APX Group, Inc., 6.38%, 12/01/19

       2,600        2,590,250   

Rent-A-Center, Inc., 4.75%, 5/01/21 (b)

       1,769        1,658,438   

Service Corp. International, 4.50%, 11/15/20

       4,382        4,283,405   
      

 

 

 
                       8,532,093   

Diversified Financial Services — 10.5%

      

Aircastle Ltd., 6.25%, 12/01/19

       3,937        4,192,905   

Ally Financial, Inc.:

      

4.50%, 2/11/14

       3,900        3,929,250   

8.30%, 2/12/15

       5,290        5,733,037   

8.00%, 11/01/31

       5,240        6,248,700   

Bank of America Corp.:

      

3.75%, 7/12/16 (c)

       5,525        5,878,661   

5.00%, 5/13/21 (c)

       17,100        18,815,062   

5.70%, 1/24/22 (c)

       2,590        2,973,203   

Series U, 5.20% (a)(d)

       3,775        3,425,812   

Bank of America NA, 5.30%, 3/15/17 (c)

       13,440        14,924,932   

Citigroup, Inc. (c):

      

4.45%, 1/10/17

       4,800        5,219,203   

8.50%, 5/22/19

       464        600,360   

6.68%, 9/13/43

       4,125        4,610,999   

DPL, Inc.:

      

6.50%, 10/15/16

       955        1,029,013   

7.25%, 10/15/21

       2,685        2,792,400   

General Motors Financial Co., Inc.:

      

6.75%, 6/01/18

       1,700        1,925,250   

4.25%, 5/15/23 (b)

       1,681        1,613,760   

ING Bank NV, 5.00%, 6/09/21 (b)(c)

       8,000        8,770,160   

Intesa Sanpaolo SpA, 3.13%, 1/15/16

       5,450        5,557,757   

Jefferies Finance LLC/JFIN Co-Issuer Corp., 7.38%, 4/01/20 (b)

       2,105        2,162,888   

Jefferies Group LLC, 5.13%, 1/20/23

       1,850        1,875,438   

Jefferies LoanCore LLC/JLC Finance Corp., 6.88%, 6/01/20 (b)

       2,149        2,127,510   

JPMorgan Chase & Co. (a)(d):

      

Series Q, 5.15%

       4,000        3,620,000   

Series R, 6.00% (c)

       17,780        17,202,150   

LeasePlan Corp. NV, 3.00%, 10/23/17 (b)(c)

       6,775        6,865,785   

Leucadia National Corp., 5.50%, 10/18/23

       4,000        4,038,552   

Macquarie Bank Ltd., 5.00%, 2/22/17 (b)(c)

       2,325        2,549,595   

Moody’s Corp., 6.06%, 9/07/17

       20,000        21,195,420   

 

See Notes to Financial Statements.

 

                
12    ANNUAL REPORT    OCTOBER 31, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds           Par  
(000)
    Value  

Diversified Financial Services (concluded)

      

Reynolds Group Issuer, Inc.:

      

7.13%, 4/15/19

    USD         1,588      $ 1,695,190   

9.00%, 4/15/19

       110        117,700   

7.88%, 8/15/19

       2,480        2,740,400   

9.88%, 8/15/19

       585        647,156   

5.75%, 10/15/20

       4,620        4,770,150   

6.88%, 2/15/21

       365        396,025   
      

 

 

 
        170,244,423   

Diversified Telecommunication Services — 6.3%

      

AT&T, Inc., 6.30%, 1/15/38 (c)

       12,000        13,010,280   

CenturyLink, Inc., 5.63%, 4/01/20

       1,660        1,686,975   

Level 3 Financing, Inc.:

      

8.13%, 7/01/19

       11,171        12,316,027   

8.63%, 7/15/20

       2,240        2,536,800   

Telecom Italia Capital SA:

      

6.18%, 6/18/14

       2,177        2,236,519   

6.00%, 9/30/34

       7,500        6,595,710   

Telefonica Emisiones SAU:

      

3.19%, 4/27/18

       6,550        6,646,010   

4.57%, 4/27/23

       3,450        3,438,598   

Verizon Communications, Inc. (c):

      

2.00%, 9/14/18 (a)

       5,000        5,278,950   

5.15%, 9/15/23

       8,775        9,520,770   

6.40%, 9/15/33

       9,475        10,724,554   

7.35%, 4/01/39

       7,825        9,735,317   

6.55%, 9/15/43

       13,225        15,343,790   

Windstream Corp., 7.88%, 11/01/17

       2,280        2,607,750   
      

 

 

 
                       101,678,050   

Electric Utilities — 4.1%

      

CMS Energy Corp., 5.05%, 3/15/22

       9,900        10,769,042   

Dominion Resources, Inc., 8.88%, 1/15/19 (c)

       8,000        10,360,288   

Duke Energy Corp., 3.55%, 9/15/21 (c)

       3,650        3,727,026   

Great Plains Energy, Inc., 5.29%, 6/15/22 (e)

       5,550        6,057,930   

Midland Cogeneration Venture LP, 5.25%, 3/15/25 (b)

       5,000        5,062,220   

Mirant Mid Atlantic Pass Through Trust B, Series B, 9.13%, 6/30/17

       1,387        1,469,845   

Nisource Finance Corp., 6.80%, 1/15/19

       3,075        3,631,218   

Oncor Electric Delivery Co. LLC (c):

      

4.10%, 6/01/22

       4,150        4,288,382   

5.30%, 6/01/42

       2,750        2,842,163   

Progress Energy, Inc., 7.00%, 10/30/31 (c)

       12,000        14,653,308   

Puget Energy, Inc.:

      

6.00%, 9/01/21

       275        301,122   

5.63%, 7/15/22

       2,700        2,912,709   
      

 

 

 
                       66,075,253   

Electrical Equipment — 0.1%

      

GrafTech International Ltd., 6.38%, 11/15/20

             2,385        2,414,813   

Electronic Equipment, Instruments & Components — 0.2%

  

 

Jabil Circuit, Inc., 8.25%, 3/15/18

             2,600        3,074,500   

Energy Equipment & Services — 3.3%

      

Atwood Oceanics, Inc., 6.50%, 2/01/20

       375        401,250   

CGG, 6.50%, 6/01/21

       2,390        2,485,600   

Energy Transfer Partners LP:

      

5.20%, 2/01/22

       10,200        10,976,842   

6.50%, 2/01/42

       2,340        2,562,174   

Genesis Energy LP/Genesis Energy Finance Corp., 5.75%, 2/15/21

       293        297,395   

Hornbeck Offshore Services, Inc.,
5.88%, 4/01/20

       2,591        2,662,253   

Oil States International, Inc.:

      

6.50%, 6/01/19

       2,155        2,295,075   

5.13%, 1/15/23 (b)

       2,385        2,653,313   
Corporate Bonds           Par  
(000)
    Value  

Energy Equipment & Services (concluded)

      

Parker Drilling Co., 7.50%, 8/01/20 (b)

    USD         1,255      $ 1,305,200   

Petrofac Ltd., 3.40%, 10/10/18 (b)(c)

       5,360        5,444,961   

Precision Drilling Corp., 6.50%, 12/15/21

       865        921,225   

Seadrill Ltd., 5.63%, 9/15/17 (b)

       6,254        6,457,255   

Transocean, Inc.:

      

2.50%, 10/15/17

       1,300        1,312,146   

6.50%, 11/15/20

       3,795        4,305,742   

6.38%, 12/15/21

       4,655        5,244,644   

6.80%, 3/15/38

       3,300        3,592,406   
      

 

 

 
                       52,917,481   

Food & Staples Retailing — 0.7%

      

HJ Heinz Finance Co., 7.13%, 8/01/39 (b)

       4,415        4,602,637   

Rite Aid Corp., 6.75%, 6/15/21

       1,170        1,237,275   

Wal-Mart Stores, Inc., 5.25%, 9/01/35 (c)

       5,150        5,617,914   
      

 

 

 
                       11,457,826   

Food Products — 1.7%

      

Barry Callebaut Services NV, 5.50%, 6/15/23 (b)

       2,600        2,634,710   

Kellogg Co., Series B, 7.45%, 4/01/31 (c)

       5,000        6,401,380   

Kraft Foods Group, Inc., 5.00%, 6/04/42 (c)

       5,000        5,025,415   

Mondelez International, Inc.:

      

6.50%, 8/11/17

       4,450        5,192,131   

6.13%, 8/23/18

       4,840        5,664,349   

Pinnacle Foods Finance LLC/Pinnacle Foods Finance Corp., 4.88%, 5/01/21 (b)

       917        875,735   

Sun Merger Sub, Inc. (b):

      

5.25%, 8/01/18

       1,389        1,451,505   

5.88%, 8/01/21

       715        747,175   
      

 

 

 
                       27,992,400   

Gas Utilities — 0.5%

  

El Paso Natural Gas Co. LLC, 8.63%, 1/15/22

       2,345        3,012,127   

Suburban Propane Partners LP/Suburban Energy Finance Corp., 7.50%, 10/01/18

       1,575        1,691,156   

Targa Resources Partners LP:

      

7.88%, 10/15/18

       2,355        2,555,175   

6.88%, 2/01/21

       1,265        1,363,037   
      

 

 

 
                       8,621,495   

Health Care Equipment & Supplies — 0.1%

  

Teleflex, Inc., 6.88%, 6/01/19

             1,660        1,734,700   

Health Care Providers & Services — 3.7%

  

Aviv Healthcare Properties LP/Aviv Healthcare
Capital Corp.:

      

7.75%, 2/15/19

       1,550        1,672,062   

6.00%, 10/15/21 (b)

       869        890,725   

CHS/Community Health Systems, Inc.,
5.13%, 8/15/18

       1,620        1,684,800   

HCA, Inc.:

      

8.50%, 4/15/19

       665        714,044   

6.50%, 2/15/20

       7,876        8,762,050   

7.88%, 2/15/20

       135        146,475   

7.25%, 9/15/20

       11,347        12,439,149   

Tenet Healthcare Corp.:

      

6.25%, 11/01/18

       3,162        3,462,390   

6.00%, 10/01/20 (b)

       2,669        2,822,467   

4.50%, 4/01/21

       304        294,880   

4.38%, 10/01/21 (b)

       7,335        7,041,600   

8.13%, 4/01/22 (b)

       5,937        6,501,015   

UnitedHealth Group, Inc., 6.88%, 2/15/38 (c)

       10,000        12,791,530   
      

 

 

 
                       59,223,187   

Health Care Technology — 0.4%

  

Amgen, Inc., 5.15%, 11/15/41 (c)

             6,500        6,551,298   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    OCTOBER 31, 2013    13


Table of Contents

Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds           Par  
(000)
    Value  

Hotels, Restaurants & Leisure — 1.6%

  

Caesars Entertainment Resort Properties LLC/Caesars Entertainment Resort Prope (b):

      

8.00%, 10/01/20

    USD         4,618      $ 4,629,545   

11.00%, 10/01/21 (c)

       6,123        5,985,232   

Carnival Corp., 3.95%, 10/15/20 (c)

       3,735        3,788,616   

Diamond Resorts Corp., 12.00%, 8/15/18

       2,131        2,365,410   

MCE Finance Ltd., 5.00%, 2/15/21 (b)

       3,895        3,856,050   

Playa Resorts Holding BV, 8.00%, 8/15/20 (b)

       749        793,004   

PNK Finance Corp., 6.38%, 8/01/21 (b)

       949        996,450   

Six Flags Entertainment Corp.,
5.25%, 1/15/21 (b)

       1,718        1,687,935   

Wynn Macau Ltd., 5.25%, 10/15/21 (b)

       1,758        1,797,555   
      

 

 

 
                       25,899,797   

Household Durables — 1.4%

  

Beazer Homes USA, Inc., 6.63%, 4/15/18

       2,330        2,481,450   

Brookfield Residential Properties, Inc./Brookfield Residential US Corp., 6.13%, 7/01/22 (b)

       1,647        1,634,648   

K. Hovnanian Enterprises, Inc.,
7.25%, 10/15/20 (b)

       3,675        3,913,875   

KB Home:

      

7.25%, 6/15/18

       1,990        2,169,100   

7.00%, 12/15/21

       1,504        1,549,120   

United Rentals North America, Inc.:

      

5.75%, 7/15/18

       793        850,492   

7.38%, 5/15/20

       2,025        2,257,875   

7.63%, 4/15/22

       1,853        2,075,360   

Standard Pacific Corp., 8.38%, 1/15/21

       3,015        3,459,712   

Taylor Morrison Communities, Inc./Monarch Communities, Inc., 5.25%, 4/15/21 (b)

       1,537        1,498,575   
      

 

 

 
                       21,890,207   

Household Products — 0.1%

  

Spectrum Brands Escrow Corp. (b):

      

6.38%, 11/15/20

       810        860,625   

6.63%, 11/15/22

       1,110        1,184,925   
      

 

 

 
                       2,045,550   

Independent Power Producers & Energy Traders — 1.1%

  

Calpine Corp. (b):

      

7.50%, 2/15/21

       219        236,520   

6.00%, 1/15/22

       878        910,925   

5.88%, 1/15/24

       823        825,058   

Energy Future Intermediate Holding Co. LLC/EFIH Finance, Inc., 10.00%, 12/01/20

       9,380        9,849,000   

GenOn REMA LLC, 9.68%, 7/02/26

       1,690        1,757,600   

Laredo Petroleum, Inc.:

      

9.50%, 2/15/19

       965        1,078,387   

7.38%, 5/01/22

       900        974,250   

QEP Resources, Inc., 5.38%, 10/01/22

       1,927        1,883,642   
      

 

 

 
                       17,515,382   

Insurance — 5.9%

  

A-S Co-Issuer Subsidiary, Inc./A-S Merger Sub LLC, 7.88%, 12/15/20 (b)

       1,204        1,246,140   

AIG Life Holdings, Inc., 8.50%, 7/01/30

       500        645,000   

American International Group, Inc.:

      

3.80%, 3/22/17 (c)

       5,070        5,416,377   

8.25%, 8/15/18 (c)

       2,125        2,688,257   

6.40%, 12/15/20 (c)

       8,710        10,449,370   

8.18%, 5/15/68 (a)

       3,755        4,628,037   

Aon Corp., 5.00%, 9/30/20 (c)

       7,700        8,555,485   

Aon PLC, 4.25%, 12/12/42 (c)

       6,500        5,696,645   

Farmers Exchange Capital II,
6.15%, 11/01/53 (a)(b)

       4,140        4,218,950   

Forethought Financial Group, Inc.,
8.63%, 4/15/21 (b)

       3,400        3,790,480   
Corporate Bonds           Par  
(000)
    Value  

Insurance (concluded)

      

Genworth Financial, Inc., 7.63%, 9/24/21

    USD         2,880      $ 3,531,128   

ING US, Inc., 5.65%, 5/15/53 (a)

       4,750        4,520,262   

Manulife Financial Corp., 4.90%, 9/17/20 (c)

       10,425        11,346,226   

MPL 2 Acquisition Canco, Inc.,
9.88%, 8/15/18 (b)

       1,455        1,498,650   

Principal Financial Group, Inc.,
8.88%, 5/15/19 (c)

       2,825        3,698,052   

Prudential Financial, Inc., 6.63%, 12/01/37 (c)

       10,000        12,314,140   

XLIT Ltd., 5.75%, 10/01/21 (c)

       10,085        11,667,589   
      

 

 

 
                       95,910,788   

Internet Software & Services — 0.3%

  

Equinix, Inc., 4.88%, 4/01/20

       357        358,339   

IAC/InterActiveCorp, 4.75%, 12/15/22

       2,461        2,331,797   

VeriSign, Inc., 4.63%, 5/01/23

       1,425        1,387,594   
      

 

 

 
                       4,077,730   

IT Services — 1.6%

  

Ceridian Corp., 8.88%, 7/15/19 (b)

       12,085        13,988,387   

Epicor Software Corp., 8.63%, 5/01/19

       2,400        2,604,000   

First Data Corp. (b):

      

7.38%, 6/15/19 (c)

       3,155        3,395,569   

6.75%, 11/01/20

       2,720        2,879,800   

SunGard Data Systems, Inc., 7.38%, 11/15/18

       2,460        2,607,600   
      

 

 

 
                       25,475,356   

Life Sciences Tools & Services — 0.8%

  

Life Technologies Corp., 6.00%, 3/01/20 (c)

             12,000        13,743,744   

Machinery — 0.1%

  

Allegion US Holding Co., Inc.,
5.75%, 10/01/21 (b)

             1,907        1,978,513   

Media — 6.8%

  

A&E Television Networks LLC, 3.25%, 8/22/19

       5,000        4,987,500   

AMC Networks, Inc.:

      

7.75%, 7/15/21

       1,330        1,496,250   

4.75%, 12/15/22

       685        662,738   

Cinemark USA, Inc., 5.13%, 12/15/22

       349        341,148   

Clear Channel Worldwide Holdings, Inc.,
6.50%, 11/15/22

       10,205        10,687,670   

COX Communications, Inc.,
8.38%, 3/01/39 (b)(c)

       10,000        12,288,570   

CSC Holdings LLC, 8.63%, 2/15/19

       4,005        4,735,912   

DIRECTV Holdings LLC, 5.00%, 3/01/21 (c)

       8,575        8,990,236   

Gray Television, Inc., 7.50%, 10/01/20 (b)

       713        746,867   

Intelsat Jackson Holdings SA:

      

7.25%, 4/01/19

       710        765,025   

5.50%, 8/01/23 (b)

       2,909        2,807,185   

The Interpublic Group of Cos., Inc.,
3.75%, 2/15/23

       6,025        5,723,129   

Live Nation Entertainment, Inc.,
7.00%, 9/01/20 (b)

       463        491,938   

Lynx I Corp., 5.38%, 4/15/21 (b)

       1,394        1,400,970   

NAI Entertainment Holdings LLC,
5.00%, 8/01/18 (b)

       1,471        1,507,775   

The New York Times Co., 6.63%, 12/15/16

       1,725        1,906,125   

News America, Inc., 6.15%, 3/01/37 (c)

       9,575        10,675,302   

Sirius XM Radio, Inc. (b):

      

4.25%, 5/15/20

       2,300        2,193,625   

4.63%, 5/15/23

       1,129        1,035,857   

Time Warner Cable, Inc., 6.75%, 6/15/39 (c)

       5,000        4,762,530   

Time Warner, Inc., 7.70%, 5/01/32 (c)

       12,000        15,340,992   

Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH (b):

      

7.50%, 3/15/19

       3,530        3,830,050   

5.50%, 1/15/23

       1,000        987,500   

 

See Notes to Financial Statements.

 

                
14    ANNUAL REPORT    OCTOBER 31, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds           Par  
(000)
    Value  

Media (concluded)

      

Univision Communications, Inc.,
5.13%, 5/15/23 (b)

    USD         4,793      $ 4,745,070   

Virgin Media Secured Finance PLC,
6.50%, 1/15/18

       7,750        8,060,000   
      

 

 

 
                       111,169,964   

Metals & Mining — 4.2%

  

AngloGold Ashanti Holdings PLC, 5.13%, 8/01/22

       5,000        4,444,335   

ArcelorMittal:

      

9.50%, 2/15/15

       1,623        1,779,133   

4.25%, 2/25/15

       711        732,330   

4.25%, 8/05/15

       1,325        1,368,063   

5.00%, 2/25/17

       885        934,781   

6.13%, 6/01/18

       2,575        2,793,875   

Barrick Gold Corp.:

      

2.90%, 5/30/16 (c)

       3,625        3,715,803   

4.10%, 5/01/23

       5,000        4,534,990   

Commercial Metals Co., 4.88%, 5/15/23

       2,194        2,084,300   

FMG Resources August 2006 Property Ltd. (b)(c):

      

6.38%, 2/01/16

       5,485        5,718,112   

6.00%, 4/01/17

       8,552        8,936,840   

Freeport-McMoRan Copper & Gold, Inc.:

      

3.55%, 3/01/22

       4,700        4,429,134   

3.88%, 3/15/23

       8,900        8,424,117   

Freeport-McMoRan Corp., 7.13%, 11/01/27

       8,500        9,514,016   

New Gold, Inc., 6.25%, 11/15/22 (b)

       1,795        1,768,075   

Novelis, Inc.:

      

8.38%, 12/15/17

       1,130        1,209,100   

8.75%, 12/15/20

       3,285        3,654,562   

Steel Dynamics, Inc.:

      

6.38%, 8/15/22

       1,430        1,544,400   

5.25%, 4/15/23 (b)

       163        161,370   
      

 

 

 
                       67,747,336   

Multi-Utilities — 1.3%

  

CenterPoint Energy, Inc. (c):

      

5.95%, 2/01/17

       9,000        10,205,955   

6.50%, 5/01/18

       9,675        11,425,362   
      

 

 

 
                       21,631,317   

Multiline Retail — 0.4%

  

Dollar General Corp., 4.13%, 7/15/17

       3,230        3,452,825   

Dufry Finance SCA, 5.50%, 10/15/20 (b)

       3,460        3,508,582   
      

 

 

 
                       6,961,407   

Oil, Gas & Consumable Fuels — 17.0%

  

Access Midstream Partners LP/ACMP Finance Corp.:

      

5.88%, 4/15/21

       3,267        3,503,857   

6.13%, 7/15/22

       1,600        1,716,000   

4.88%, 5/15/23

       411        408,945   

Anadarko Petroleum Corp., 6.38%, 9/15/17

       75        87,677   

Antero Resources Finance Corp.,
5.38%, 11/01/21 (b)(f)

       649        659,546   

Athlon Holdings LP/Athlon Finance Corp.,
7.38%, 4/15/21 (b)

       656        685,520   

Berry Petroleum Co., 6.38%, 9/15/22

       3,207        3,303,210   

Bonanza Creek Energy, Inc., 6.75%, 4/15/21

       245        259,700   

BP Capital Markets PLC, 5.25%, 11/07/13 (c)

       2,100        2,100,609   

Carrizo Oil & Gas, Inc., 7.50%, 9/15/20

       1,076        1,172,840   

Chesapeake Energy Corp.:

      

7.25%, 12/15/18

       2,178        2,504,700   

6.63%, 8/15/20

       2,085        2,350,837   

6.13%, 2/15/21 (c)

       1,857        2,028,772   

5.75%, 3/15/23

       2,615        2,771,900   
Corporate Bonds           Par  
(000)
    Value  

Oil, Gas & Consumable Fuels (continued)

      

Concho Resources, Inc.:

      

6.50%, 1/15/22

    USD         562      613,985   

5.50%, 10/01/22

       226        235,605   

5.50%, 4/01/23

       1,365        1,416,188   

CONSOL Energy, Inc.:

      

8.00%, 4/01/17

       4,036        4,278,160   

8.25%, 4/01/20

       355        388,281   

Continental Resources, Inc.:

      

5.00%, 9/15/22

       6,557        6,827,476   

4.50%, 4/15/23

       469        473,104   

Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp.,
6.13%, 3/01/22 (b)(f)

       710        725,975   

DCP Midstream LLC, 4.75%, 9/30/21 (b)

       1,074        1,095,708   

DCP Midstream Operating LP, 3.88%, 3/15/23

       2,690        2,509,159   

Denbury Resources, Inc., 4.63%, 7/15/23

       2,572        2,372,670   

Drill Rigs Holdings, Inc., 6.50%, 10/01/17 (b)

       3,487        3,670,067   

El Paso LLC, 7.75%, 1/15/32

       4,537        4,709,225   

El Paso Pipeline Partners Operating Co. LLC:

      

6.50%, 4/01/20

       5,075        5,896,409   

5.00%, 10/01/21

       1,850        1,971,823   

Enbridge Energy Partners LP, 9.88%, 3/01/19

       6,000        7,872,558   

Energy XXI Gulf Coast, Inc., 7.75%, 6/15/19

       3,465        3,707,550   

Enterprise Products Operating LLC, Series N,
6.50%, 1/31/19 (c)

       12,000        14,295,408   

EP Energy LLC/Everest Acquisition Finance, Inc., Series WI, 6.88%, 5/01/19

       3,833        4,120,475   

Expro Finance Luxembourg SCA,
8.50%, 12/15/16 (b)

       2,525        2,644,937   

Kinder Morgan Energy Partners LP,
6.85%, 2/15/20 (c)

       12,000        14,401,956   

Kinder Morgan, Inc., 5.63%, 11/15/23 (b)

       1,105        1,105,000   

Kodiak Oil & Gas Corp.:

      

8.13%, 12/01/19

       3,145        3,490,950   

5.50%, 2/01/22 (b)

       540        550,800   

Linn Energy LLC/Linn Energy Finance Corp.:

      

8.63%, 4/15/20 (b)

       1,224        1,220,940   

8.63%, 4/15/20

       480        511,200   

7.75%, 2/01/21

       475        490,438   

Marathon Petroleum Corp., 3.50%, 3/01/16

       4,600        4,845,194   

MarkWest Energy Partners LP/MarkWest Energy Finance Corp., 6.25%, 6/15/22

       1,369        1,485,365   

MEG Energy Corp. (b):

      

6.50%, 3/15/21

       3,839        4,006,956   

7.00%, 3/31/24

       3,598        3,678,955   

Memorial Production Partners LP/Memorial Production Finance Corp., 7.63%, 5/01/21

       885        898,275   

Newfield Exploration Co., 6.88%, 2/01/20

       1,965        2,102,550   

Nexen, Inc., 6.40%, 5/15/37 (c)

       4,615        5,302,340   

Oasis Petroleum, Inc.:

      

7.25%, 2/01/19

       915        983,625   

6.50%, 11/01/21

       1,025        1,109,563   

6.88%, 3/15/22 (b)

       1,185        1,279,800   

Odebrecht Offshore Drilling Finance Ltd.,
6.75%, 10/01/22 (b)

       3,623        3,776,977   

Offshore Group Investment Ltd., 7.13%, 4/01/23

       963        979,853   

ONEOK Partners LP, 8.63%, 3/01/19 (c)

       10,000        12,752,400   

Pacific Drilling SA, 5.38%, 6/01/20 (b)

       1,537        1,548,528   

PBF Holding Co. LLC/PBF Finance Corp.,
8.25%, 2/15/20

       191        199,595   

PDC Energy, Inc., 7.75%, 10/15/22

       1,225        1,329,125   

Peabody Energy Corp.:

      

6.00%, 11/15/18

       2,527        2,665,985   

6.25%, 11/15/21

       2,503        2,584,348   

Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp. II, 8.38%, 6/01/20

       3,416        3,791,760   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    OCTOBER 31, 2013    15


Table of Contents

Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds           Par  
(000)
    Value  

Oil, Gas & Consumable Fuels (concluded)

      

Petrobras International Finance Co. (c):

      

3.88%, 1/27/16

    USD         12,550      $ 12,974,805   

5.38%, 1/27/21

       3,385        3,441,777   

Petrohawk Energy Corp., 10.50%, 8/01/14 (c)

       2,080        2,132,000   

Petroleos Mexicanos, 4.88%, 1/18/24

       2,000        2,040,000   

Petroleum Geo-Services ASA,
7.38%, 12/15/18 (b)

       3,980        4,258,600   

Pioneer Natural Resources Co., 6.88%, 5/01/18

       1,665        1,984,898   

Premier Oil PLC, 5.00%, 6/09/18

       11,500        11,758,750   

Range Resources Corp.:

      

6.75%, 8/01/20

       1,760        1,914,000   

5.00%, 8/15/22

       107        106,866   

Regency Energy Partners LP/Regency Energy Finance Corp., 4.50%, 11/01/23 (b)

       4,351        4,024,675   

RKI Exploration & Production LLC/RKI Finance Corp., 8.50%, 8/01/21 (b)

       1,035        1,076,400   

Rosetta Resources, Inc., 5.63%, 5/01/21

       3,448        3,482,480   

Ruby Pipeline LLC, 6.00%, 4/01/22 (b)

       10,000        10,850,640   

Sabine Pass Liquefaction LLC (b):

      

5.63%, 2/01/21

       7,393        7,466,930   

5.63%, 4/15/23

       1,947        1,908,060   

Sabine Pass Liquified Natural Gas LP:

      

7.50%, 11/30/16

       5,965        6,658,431   

6.50%, 11/01/20

       1,920        2,006,400   

SandRidge Energy, Inc.:

      

8.75%, 1/15/20

       139        150,120   

7.50%, 2/15/23

       1,541        1,598,788   

SM Energy Co.:

      

6.63%, 2/15/19

       903        961,695   

6.50%, 11/15/21

       1,160        1,258,600   

6.50%, 1/01/23

       577        617,390   

Summit Midstream Holdings LLC/Summit Midstream Finance Corp.,
7.50%, 7/01/21 (b)

       1,614        1,698,735   

Tesoro Corp., 5.38%, 10/01/22

       800        792,000   

Tesoro Logistics LP/Tesoro Logistics Finance Corp., 6.13%, 10/15/21

       1,120        1,159,200   

Western Gas Partners LP, 5.38%, 6/01/21

       5,125        5,523,848   

Whiting Petroleum Corp.:

      

5.00%, 3/15/19

       3,550        3,692,000   

5.75%, 3/15/21 (b)

       2,341        2,463,902   

The Williams Cos., Inc.:

      

3.70%, 1/15/23

       5,000        4,597,080   

8.75%, 3/15/32

       2,478        3,080,798   
      

 

 

 
                       276,151,222   

Paper & Forest Products — 2.3%

      

Ainsworth Lumber Co. Ltd., 7.50%, 12/15/17 (b)

       1,473        1,592,681   

Clearwater Paper Corp., 4.50%, 2/01/23

       532        486,780   

International Paper Co. (c):

      

7.50%, 8/15/21

       9,675        12,018,527   

8.70%, 6/15/38

       4,000        5,633,972   

7.30%, 11/15/39

       10,000        12,481,310   

Louisiana-Pacific Corp., 7.50%, 6/01/20

       2,130        2,348,325   

Mercer International, Inc., 9.50%, 12/01/17

       1,750        1,898,750   
      

 

 

 
                       36,460,345   

Pharmaceuticals — 2.0%

      

AbbVie, Inc., 2.90%, 11/06/22 (c)

       5,675        5,416,827   

Capsugel Finance Co. SCA, 9.88%, 8/01/19 (b)

    EUR         400        607,593   

Merck & Co., Inc., 6.50%, 12/01/33 (c)

    USD         6,420        8,188,428   

Mylan, Inc., 6.00%, 11/15/18 (b)

       3,250        3,496,678   

Roche Holdings, Inc., 7.00%, 3/01/39 (b)(c)

       2,805        3,781,642   

Valeant Pharmaceuticals International (b):

      

6.50%, 7/15/16

       417        431,595   

6.38%, 10/15/20

       2,355        2,513,962   
Corporate Bonds           Par  
(000)
    Value  

Pharmaceuticals (concluded)

      

VPII Escrow Corp., 6.75%, 8/15/18 (b)

    USD         6,955      7,615,725   
      

 

 

 
                       32,052,450   

Professional Services — 0.5%

      

Ceridian HCM Holding, Inc.,
11.00%, 3/15/21 (b)

       2,158        2,524,860   

The Dun & Bradstreet Corp., 3.25%, 12/01/17

       5,750        5,811,031   
      

 

 

 
                       8,335,891   

Real Estate Investment Trusts (REITs) — 2.9%

      

AvalonBay Communities, Inc.,
6.10%, 3/15/20 (c)

       10,000        11,673,400   

DDR Corp.:

      

4.75%, 4/15/18

       2,140        2,328,068   

7.88%, 9/01/20

       2,650        3,291,003   

ERP Operating LP, 5.75%, 6/15/17 (c)

       10,000        11,340,770   

Felcor Lodging LP, 5.63%, 3/01/23

       999        984,015   

HCP, Inc., 5.38%, 2/01/21 (c)

       3,450        3,813,420   

Host Hotels & Resorts LP, Series D, 3.75%, 10/15/23

       3,600        3,414,956   

UDR, Inc., 4.25%, 6/01/18

       5,225        5,596,414   

Ventas Realty LP/Ventas Capital Corp., 4.75%, 6/01/21

       3,835        4,092,980   
      

 

 

 
                       46,535,026   

Real Estate Management & Development — 0.5%

  

Lennar Corp., 4.75%, 11/15/22

       1,805        1,710,238   

Realogy Corp., 7.63%, 1/15/20 (b)(c)

       2,085        2,324,775   

The Realogy Group LLC/Sunshine Group Florida Ltd., 3.38%, 5/01/16 (b)

       1,958        1,958,000   

Shea Homes LP/Shea Homes Funding Corp., 8.63%, 5/15/19

       1,625        1,799,687   
      

 

 

 
                       7,792,700   

Road & Rail — 1.5%

      

The Hertz Corp.:

      

4.25%, 4/01/18 (b)

       983        985,458   

6.75%, 4/15/19

       1,167        1,258,901   

5.88%, 10/15/20

       925        973,563   

7.38%, 1/15/21

       310        344,100   

6.25%, 10/15/22

       1,560        1,634,100   

Norfolk Southern Corp., 6.00%, 3/15/05 (c)

       17,200        18,797,828   
      

 

 

 
                       23,993,950   

Semiconductors & Semiconductor Equipment — 0.5%

  

KLA-Tencor Corp., 6.90%, 5/01/18

       5,515        6,541,645   

NXP BV/NXP Funding LLC, 5.75%, 2/15/21 (b)

       1,655        1,725,337   
      

 

 

 
                       8,266,982   

Software — 0.6%

      

Activision Blizzard, Inc. (b):

      

5.63%, 9/15/21

       2,310        2,390,850   

6.13%, 9/15/23

       804        840,180   

Infor US, Inc., 9.38%, 4/01/19

       2,190        2,474,700   

Nuance Communications, Inc.,
5.38%, 8/15/20 (b)

       4,435        4,401,738   
      

 

 

 
                       10,107,468   

Specialty Retail — 1.2%

      

AutoNation, Inc., 6.75%, 4/15/18

       6,125        7,043,750   

L Brands, Inc., 7.00%, 5/01/20

       3,050        3,454,125   

New Academy Finance Co. LLC/New Academy Finance Corp., 8.00%, 6/15/18 (b)(g)

       485        495,912   

QVC, Inc., 7.38%, 10/15/20 (b)

       355        386,916   

Sally Holdings LLC/Sally Capital, Inc.,
6.88%, 11/15/19

       2,015        2,226,575   

VF Corp., 5.95%, 11/01/17 (c)

       5,000        5,755,445   
      

 

 

 
                       19,362,723   

 

See Notes to Financial Statements.

 

                
16    ANNUAL REPORT    OCTOBER 31, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds           Par  
(000)
    Value  

Textiles, Apparel & Luxury Goods — 0.2%

      

SIWF Merger Sub, Inc., 6.25%, 6/01/21 (b)

    USD         1,674      $ 1,682,370   

The William Carter Co., 5.25%, 8/15/21 (b)

       1,406        1,427,090   
      

 

 

 
                       3,109,460   

Tobacco — 1.9%

      

Altria Group, Inc., 10.20%, 2/06/39 (c)

       13,392        21,337,822   

Lorillard Tobacco Co., 3.50%, 8/04/16

       8,375        8,836,504   
      

 

 

 
                       30,174,326   

Trading Companies & Distributors — 0.7%

      

Doric Nimrod Air Alpha 2013-1 Pass-Through Trust (b):

      

6.13%, 11/30/19

       4,000        4,050,000   

5.25%, 5/30/23

       3,000        3,000,000   

Doric Nimrod Air Finance Alpha Ltd. 2012-1 Class A Pass-Through Trust,
5.13%, 11/30/24 (b)

       3,549        3,557,892   
      

 

 

 
                       10,607,892   

Transportation Infrastructure — 1.0%

      

Penske Truck Leasing Co. LP/PTL Finance Corp. (b):

      

3.75%, 5/11/17

       10,500        11,022,018   

4.88%, 7/11/22

       5,550        5,700,577   
      

 

 

 
                       16,722,595   

Wireless Telecommunication Services — 5.8%

      

America Movil SAB de C.V. (c):

      

2.38%, 9/08/16

       12,495        12,806,288   

3.13%, 7/16/22

       1,275        1,200,563   

American Tower Corp.:

      

4.50%, 1/15/18 (c)

       6,500        6,992,655   

3.40%, 2/15/19

       2,000        2,024,958   

5.05%, 9/01/20

       500        528,195   

5.90%, 11/01/21 (c)

       3,770        4,109,458   

Crown Castle International Corp., 5.25%, 1/15/23

       1,880        1,861,200   

Crown Castle Towers LLC (b):

      

5.50%, 1/15/37

       4,000        4,420,396   

4.17%, 8/15/37

       3,000        3,215,505   

6.11%, 1/15/40

       4,555        5,183,380   

Digicel Group Ltd., 8.25%, 9/30/20 (b)

       3,440        3,629,200   

Digicel Ltd., 6.00%, 4/15/21 (b)

       1,285        1,246,450   

SBA Tower Trust, 5.10%, 4/15/42 (b)

       13,975        15,113,599   

Softbank Corp., 4.50%, 4/15/20 (b)

       2,265        2,242,350   

Sprint Communications, Inc. (FKA Sprint Nextel Corp.) (b):

   

    

9.00%, 11/15/18

       5,290        6,414,125   

7.00%, 3/01/20

       9,302        10,325,220   

Sprint Corp., 7.88%, 9/15/23 (b)

       4,045        4,388,825   

T-Mobile USA, Inc.:

      

6.46%, 4/28/19

       950        1,007,000   

6.63%, 4/28/21

       2,680        2,834,100   

6.73%, 4/28/22

       2,495        2,635,344   

6.84%, 4/28/23

       1,405        1,485,788   
      

 

 

 
                       93,664,599   
Total Corporate Bonds123.4%                      1,998,835,132   
      
                          
Municipal Bonds                      

City of Chicago Illinois, Refunding ARB, O’Hare International Airport, General Third Lien, Build America Bonds, Series B, 6.85%, 1/01/38

       5,000        5,320,350   
Municipal Bonds           Par  
(000)
    Value  

Metropolitan Transportation Authority, RB, Build America Bonds, 6.55%, 11/15/31

    USD         10,000      11,858,200   
Total Municipal Bonds1.1%                      17,178,550   
      
                          
US Government Sponsored Agency Securities — 0.2%  

Agency Obligations — 0.2%

      

Fannie Mae, 2.62%, 10/09/19 (c)(h)

             3,945        3,379,394   
      
                          
US Treasury Obligations — 0.2%                      

US Treasury Note, 2.50%, 8/15/23 (c)

             2,700        2,689,875   
      
                          
Preferred Securities                      
Capital Trusts                      

Capital Markets — 2.4%

      

Ameriprise Financial, Inc.,
7.52%, 6/01/66 (a)(c)

       3,000        3,330,000   

State Street Capital Trust IV,
1.25%, 6/01/67 (a)(c)

       45,845        36,016,749   
      

 

 

 
                       39,346,749   

Commercial Banks — 2.6%

      

Barclays Bank PLC (a)(b)(d):

      

5.93%

       2,125        2,236,563   

7.43%

       2,225        2,453,062   

BNP Paribas SA, 7.20% (a)(b)(c)(d)

       5,000        5,206,250   

Credit Agricole SA, 8.38% (a)(b)(c)(d)

       5,000        5,631,250   

HSBC Capital Funding LP, 10.18% (a)(b)(c)(d)

       11,835        16,924,050   

M&T Capital Trust II, 8.28%, 6/01/27 (c)

       4,540        4,630,800   

Standard Chartered PLC, 7.01% (a)(b)(c)(d)

       5,000        5,275,000   
      

 

 

 
                       42,356,975   

Diversified Financial Services — 0.8%

      

General Electric Capital Corp. (a)(c)(d):

      

Series B, 6.25%

       9,100        9,486,750   

Series C, 5.25%

       3,000        2,865,000   
      

 

 

 
                       12,351,750   

Electric Utilities — 0.5%

      

PPL Capital Funding, Inc., Series A,
6.70%, 3/30/67 (a)

             8,300        8,383,000   

Insurance — 8.6%

      

ACE Capital Trust II, 9.70%, 4/01/30 (c)

       7,000        10,045,000   

The Allstate Corp., 6.50%, 5/15/67 (a)(c)

       10,400        10,947,040   

AXA SA (a)(b)(d):

      

6.38%

       4,900        4,820,375   

6.46%

       6,000        6,097,500   

Bank One Capital III, 8.75%, 9/01/30 (c)

       2,000        2,603,508   

The Chubb Corp., 6.38%, 3/29/67 (a)(c)

       7,400        8,066,000   

Great-West Life & Annuity Insurance Capital LP II, 7.15%, 5/16/46 (a)(b)(c)

       500        525,000   

Hartford Financial Services Group, Inc.,
8.13%, 6/15/68 (a)

       3,500        4,096,750   

Liberty Mutual Group, Inc.,
10.75%, 6/15/88 (a)(b)

       8,325        12,654,000   

Lincoln National Corp., 7.00%, 5/17/66 (a)

       9,005        9,297,662   

MetLife, Inc., 6.40%, 12/15/66

       9,775        10,178,219   

Mitsui Sumitomo Insurance Co. Ltd., 7.00%, 3/15/72 (a)(b)(c)

       4,800        5,388,000   

The Northwestern Mutual Life Insurance Co., 6.06%, 3/30/40 (b)(c)

       12,000        14,021,976   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    OCTOBER 31, 2013    17


Table of Contents

Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Preferred Securities           Par  
(000)
    Value  

Insurance (concluded)

      

Principal Life Insurance Co.,
8.00%, 3/01/44 (b)(c)

    USD         2,500      $ 2,606,645   

Prudential Financial, Inc.,
5.88%, 9/15/42 (a)(c)

       6,100        6,191,500   

Prudential PLC, 6.50% (d)

       6,000        6,014,400   

Reinsurance Group of America, Inc., 6.75%, 12/15/65 (a)

       12,000        11,790,000   

Swiss Re Capital I LP, 6.85% (a)(b)(c)(d)

       4,450        4,739,250   

XL Group PLC, Series E, 6.50% (a)(d)

       1,920        1,883,520   

ZFS Finance USA Trust II,
6.45%, 12/15/65 (a)(b)(c)

       6,800        7,276,000   
      

 

 

 
                       139,242,345   

Media — 0.4%

      

NBCUniversal Enterprise, Inc., 5.25% (b)(d)

             5,600        5,544,000   

Multi-Utilities — 0.3%

      

Dominion Resources, Inc., 7.50%, 6/30/66 (a)

             4,400        4,702,500   

Oil, Gas & Consumable Fuels — 1.4%

      

Enterprise Products Operating LLC (a):

      

7.00%, 6/01/67

       2,500        2,600,000   

Series A, 8.38%, 8/01/66

       9,325        10,292,468   

TransCanada PipeLines Ltd.,
6.35%, 5/15/67 (a)

       9,400        9,762,248   
      

 

 

 
                       22,654,716   

Road & Rail — 0.4%

      

BNSF Funding Trust I, 6.61%, 12/15/55 (a)

             6,125        6,729,844   
Total Capital Trusts — 17.4%                      281,311,879   
      
                          
Preferred Stocks           Shares         

Auto Components — 0.2%

      

Dana Holding Corp., 4.00% (b)(i)

             14,973        2,458,379   

Capital Markets — 0.2%

      

The Goldman Sachs Group, Inc., 5.50% (a)

             162,450        3,708,733   

Commercial Banks — 0.6%

      

Wells Fargo & Co., 5.85% (a)

             403,900        9,822,848   

Diversified Financial Services — 0.3%

      

Citigroup, Inc., Series K, 6.88% (a)

             206,000        5,139,700   

Real Estate Investment Trusts (REITs) — 0.7%

      

Sovereign Real Estate Investment Trust, 12.00% (b)

       7,000        8,818,418   

Ventas Realty LP/Ventas Capital Corp., 5.45%

       75,000        1,695,000   

Vornado Realty Trust, Series K, 5.70%

       50,000        1,047,500   
      

 

 

 
                       11,560,918   
Preferred Stocks          

Shares

    Value  

Wireless Telecommunication Services — 1.2%

  

    

Centaur Funding Corp., Series B Series B, 9.08% (b)

 

 

USD

  

     15,143      18,583,301   

Crown Castle International Corp., Series A, 4.50% (i)

       8,192        838,451   
      

 

 

 
                       19,421,752   
Total Preferred Stocks — 3.2%        52,112,330   
      
                          
Trust Preferred — 0.8%                      

Diversified Financial Services — 0.8%

      

GMAC Capital Trust I, Series 2, 8.13%, 2/15/40

  

     495,620        13,099,822   
Total Preferred Securities — 21.4%                      346,524,031   
Total Long-Term Investments
(Cost — $2,265,230,227) — 147.3%
        2,384,118,525   
      
                          
Short-Term Securities                      

BlackRock Liquidity Funds, TempFund,
Institutional Class, 0.03% (j)(k)

             3,999,467