BLACKROCK FLOATING RATE INCOME TRUST

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: 10/31/2014

Date of reporting period: 04/30/2014


Item 1 – Report to Stockholders

 


APRIL 30, 2014

 

 

 

 

 

SEMI-ANNUAL REPORT (UNAUDITED)

 

    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     

 

     Page  

Shareholder Letter

    3   

Semi-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

    49   

Statements of Operations

    50   

Statements of Changes in Net Assets

    51   

Statements of Cash Flows

    53   

Financial Highlights

    54   

Notes to Financial Statements

    57   

Officers and Trustees

    72   

Additional Information

    73   

 

                
2    SEMI-ANNUAL REPORT    APRIL 30, 2014   


Shareholder Letter

 

Dear Shareholder,

Markets have remained highly attuned to potential changes in U.S. monetary policy over the past year. This was markedly evident one year ago in May of 2013 when then-Federal Reserve Chairman Bernanke first mentioned the possibility of reducing (or “tapering”) the central bank’s asset purchase programs — comments that were widely misinterpreted as signaling an end to the Fed’s zero-interest-rate policy. U.S. Treasury yields rose sharply following his comments, triggering a steep sell-off across fixed income markets. (Bond prices move in the opposite direction of yields.) Global equities also suffered as investors feared the implications of a potential end to a program that had greatly supported stocks. Emerging markets, which are more sensitive to changes in global liquidity, were especially hurt by the prospect of ebbing cash flows from the United States. Markets broadly rebounded in late June, however, when the Fed’s tone turned more dovish. At the same time, improving economic indicators and better corporate earnings helped extend gains through most of the summer.

Although the tone of economic and financial news was mixed last autumn, it was a surprisingly positive period for most asset classes. Early on, the Fed defied market expectations with its decision to delay tapering, but higher volatility returned in late September 2013 when the U.S. Treasury Department warned that the national debt would soon breach its statutory maximum. The ensuing political brinksmanship led to a partial government shutdown, roiling global financial markets through the first half of October. Equities and other so-called “risk assets” managed to resume their rally when politicians finally engineered a compromise to reopen the government and extend the debt ceiling.

The remainder of 2013 was a generally positive period for stock markets in the developed world, although investors continued to grapple with uncertainty about when and how much the Fed would scale back on stimulus. When the Fed ultimately announced its tapering plans in mid-December, markets reacted positively, as this action signaled the Fed’s perception of real improvement in the economy, and investors were finally released from the anxiety that had gripped them for quite some time.

The start of the new year brought a stark change in sentiment. Heightened volatility in emerging markets — driven by reduced global liquidity, severe currency weakness, high levels of debt and uneven growth — combined with mixed U.S. economic data caused global equities to weaken in January while bond markets found renewed strength from investors seeking relatively safer assets. Although these headwinds persisted, equities were back on the rise in February as investors were encouraged by a one-year extension of the U.S. debt ceiling and market-friendly comments from new Fed Chair Janet Yellen. While U.S. economic data had softened, investors were assuaged by increasing evidence that this was a temporary trend resulting from harsher-than-usual winter weather.

In the final months of the period, signs of decelerating growth in China and geopolitical tensions in Russia and Ukraine made for a bumpy ride, but markets continued their climb as investors focused on improving U.S. economic data, stronger corporate earnings and a still-dovish central bank. Within developed markets, investors shifted from growth to value stocks as the strong performance of growth stocks in 2013 had pushed valuations higher in many of these sectors. Emerging markets also benefited from this broad rotation into cheaper valuations and were further supported by an improving growth outlook for a number of developing countries.

Even though investors were gearing up for a modest shift toward tighter monetary policy from the Fed, equity markets in the developed world posted solid gains for the six- and 12-month periods ended April 30. Emerging markets, however, experienced increased volatility amid heightened risks for the asset class. Interest rate uncertainty posed a headwind for fixed income assets, and higher-quality sectors of the market performed poorly over the reporting period. Conversely, high yield bonds benefited from income-oriented investors’ search for yield in the overall low-rate environment. Short-term interest rates remained near zero, keeping yields on money market securities close to historic lows.

At BlackRock, we believe investors need to think globally, extend their scope across a broad 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

  In a modest global growth environment, expectations around monetary policy changes continued to be a key theme in financial market performance.

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of April 30, 2014  
    6-month     12-month  

U.S. large cap equities (S&P 500® Index)

    8.36     20.44

U.S. small cap equities
(Russell 2000® Index)

    3.08        20.50   

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

    4.44        13.35   

Emerging market equities (MSCI Emerging
Markets Index)

    (2.98     (1.84

3-month Treasury bills
(BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)

    0.03        0.06   

U.S. Treasury securities
(BofA Merrill Lynch 10-Year U.S. Treasury Index)

    0.88        (5.25

U.S. investment-grade
bonds (Barclays
U.S. Aggregate Bond Index)

    1.74        (0.26

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

    4.24        0.46   

U.S. high yield bonds

(Barclays U.S.
Corporate High Yield 2%
Issuer Capped Index)

    4.72        6.28   
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


Trust Summary as of April 30, 2014    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

 

How did the Trust perform?

 

Ÿ  

For the six-month period ended April 30, 2014, the Trust returned 9.38% based on market price and 6.81% based on NAV. For the same period, the closed-end Lipper Corporate BBB-Rated Debt Funds (Leveraged) category posted an average return of 5.32% based on market price and 4.66% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Trust’s discount to NAV, which narrowed 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  

In a positive market environment, the Trust’s high level of leverage enhanced the rewards of its credit exposures. A preference for companies generating cash flows sourced from the U.S. 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 debt boosted returns. Within the investment grade space, security selection within industrials and a preference for capital trust securities within financials added to performance. Additionally, the Trust’s short duration bias enhanced results as interest rates increased in late 2013, as did a yield curve-flattening bias as longer-term rates declined in March of 2014.

 

Ÿ  

As the slow-growth, low-rate environment has been conducive for positive performance in credit sectors, there were no material detractors from the Trust’s performance during the period.

Describe recent portfolio activity.

 

Ÿ  

During the six-month period, the Trust tactically rotated in and out of sectors and individual credit names, but overall, did not make significant changes to its overall weightings in investment grade credit, high yield and capital trust securities. Within the investment grade space, the Trust favored financials and capital trust securities over industrials given the rising event-driven headline risk among industrial credits.

Describe portfolio positioning at period end.

 

Ÿ  

As of period end, the Trust continued to maintain its allocations to high yield debt and financials, with a preference for capital trust securities, and retained a bias toward companies with U.S.-sourced cash flows.

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    SEMI-ANNUAL REPORT    APRIL 30, 2014   


     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 April 30, 2014 ($13.68)1

  7.06%

Current Monthly Distribution per Common Share2

  $0.0805

Current Annualized Distribution per Common Share2

  $0.9660

Economic Leverage as of April 30, 20143

  31%

 

  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 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 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

 

           
        4/30/14        10/31/13        Change        High        Low  

Market Price

       $13.68           $12.97           5.47%           $13.72           $12.51   

Net Asset Value

       $15.44           $14.99           3.00%           $15.44           $14.75   

 

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

 

LOGO

 

Overview of the Trust’s Long-Term Investments
Portfolio Composition   4/30/14     10/31/13  

Corporate Bonds

    79     84

Preferred Securities

    16        14   

U.S. Treasury Obligations

    4          

Municipal Bonds

    1        1   

Asset-Backed Securities

           1   
Credit Quality Allocation4   4/30/14     10/31/13  

AAA/Aaa5

    5       

AA/Aa

    1        1

A

    16        16   

BBB/Baa

    39        43   

BB/Ba

    25        24   

B

    11        13   

CCC/Caa

    1          

Not Rated

    2        3   

 

  4   

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

 

  5   

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

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2014    5


Trust Summary as of April 30, 2014    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 U.S. and non-U.S. 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 six-month period ended April 30, 2014, the Trust returned 2.42% based on market price and 3.42% based on NAV. For the same period, the closed-end Lipper Loan Participation Funds category posted an average return of 0.77% based on market price and 3.19% based on NAV. All returns reflect reinvestment of dividends and/or distributions. 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  

Security selection in the gaming and technology 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 tactical exposures to higher quality collateralized loan obligations (“CLOs”) also helped results.

 

Ÿ  

Conversely, positioning in the media non-cable and electric sectors detracted from performance, as did the Trust’s underweight to lower-rated loan assets, which outperformed middle and higher quality loans during the period.

Describe recent portfolio activity.

 

Ÿ  

Throughout the six-month period, the Trust maintained its focus on the higher quality segments of the loan market in terms of loan structure, liquidity and overall credit quality. With the average loan trading recently at or just below par (i.e., with limited or no upside), the Trust has concentrated its investments in strong companies with stable cash flows and high quality collateral, with the ability to meet interest obligations and ultimately return principal. The Trust actively participated in the new-issue market, where appealing investment opportunities have been emerging. While the investment advisor anticipates modest growth and improving economic conditions, the Trust’s exposure to lower-rated segments of the market remained limited given less attractive risk-reward profiles in that space. From an asset allocation perspective, the Trust continued to reduce exposure to higher quality high yield bonds as valuations in that market moved closer to fair value. In addition, the Trust tactically added risk in high quality CLOs, an area of the market with appealing valuations.

Describe portfolio positioning at period end.

 

Ÿ  

At period end, the Trust held 93% of its total portfolio in floating rate loan interests (bank loans), with the remainder in corporate bonds, asset-backed securities and common stocks. The Trust’s highest-conviction holdings included Alliance Boots Holdings Ltd. (retailers) and La Quinta Intermediate Holdings LLC (lodging).

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    SEMI-ANNUAL REPORT    APRIL 30, 2014   


     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 April 30, 2014 ($14.03)1

   5.94%

Current Monthly Distribution per Common Share2

   $0.0695

Current Annualized Distribution per Common Share2

   $0.8340

Economic Leverage as of April 30, 20143

   24%

 

  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 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 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                                        
           
      4/30/14      10/31/13      Change      High      Low  

Market Price

     $14.03         $14.12         (0.64)%         $14.47         $13.80   

Net Asset Value

     $14.84         $14.79         0.34%         $14.91         $14.72   

 

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    4/30/14     10/31/13  

Floating Rate Loan Interests

     93     83

Corporate Bonds

     3        13   

Asset-Backed Securities

     3        3   

Common Stocks

     1        1   

 

Credit Quality Allocation4    4/30/14     10/31/13  

BBB/Baa

     9     10

BB/Ba

     29        21   

B

     44        67   

Not Rated

     18        2   

 

  4   

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

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2014    7


Trust Summary as of April 30, 2014    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 six-month period ended April 30, 2014, the Trust returned 12.31% based on market price and 9.73% based on NAV. For the same period, the closed-end Lipper General Bond Funds category posted an average return of 6.87% based on market price and 6.18% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Trust’s discount to NAV, which narrowed 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 largest contributor to the Trust’s positive performance was its exposure to corporate credit, particularly high yield bonds and capital securities. Additionally, the Trust’s holdings in asset-backed securities (“ABS”), especially home equity ABS, and non-agency mortgage-backed securities (“MBS”) had a notable impact on returns. In securitized debt, exposure to non-U.S. dollar-denominated positions enhanced overall performance for the period. In the positive market environment, the Trust’s high level of leverage enhanced the rewards of its credit exposures.

Ÿ  

As the slow-growth, low-rate environment has been conducive for positive performance in credit sectors, there were no material detractors from the Trust’s performance during the period.

Describe recent portfolio activity.

 

Ÿ  

During the six-month period, the Trust took advantage of favorable market conditions offering attractive entry points to increase allocations to capital securities and securitized debt, particularly collateralized loan obligations.

 

Ÿ  

The Trust maintained a high level of leverage throughout the period in order to maximize its income generation potential. Given the low yield environment over the six months, 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  

As of period end, the Trust was positioned to benefit from a continuation of a positive market environment for risk assets with its largest allocation in high yield debt, followed by capital securities and securitized debt.

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    SEMI-ANNUAL REPORT    APRIL 30, 2014   


     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 April 30, 2014 ($18.39)1

  7.62%

Current Monthly Distribution per Common Share2

  $0.1167

Current Annualized Distribution per Common Share2

  $1.4004

Economic Leverage as of April 30, 20143

  41%

 

  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 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 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                                        
           
      4/30/14      10/31/13      Change      High      Low  

Market Price

     $18.39         $17.04         7.92%         $18.40         $16.39   

Net Asset Value

     $19.98         $18.95         5.44%         $19.98         $18.81   

 

Market Price and Net Asset Value History Since Inception

 

LOGO

 

  4   

Commencement of operations.

 

Overview of the Trust’s Long-Term Investments
Portfolio Composition   4/30/14     10/31/13  

Corporate Bonds

    39     42

Non-Agency Mortgage-Backed Securities

    27        25   

Asset-Backed Securities

    17        18   

Preferred Securities

    11        9   

Floating Rate Loan Interests

    5        5   

Foreign Agency Obligations

    1        1   

 

Credit Quality Allocation5   4/30/14     10/31/13  

AA/Aa

           1

A

    2     3   

BBB/Baa

    18        23   

BB/Ba

    37        33   

B

    34        31   

CCC/Caa

    6        6   

Not Rated

    3        3   

 

  5   

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

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2014    9


The Benefits and Risks of Leveraging     

 

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

In general, the concept of leveraging is based on the premise that the financing cost of leverage, which will be based on short-term interest rates, will normally be lower than the income earned by a Trust on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of the Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the 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.

To illustrate these concepts, assume a Trust’s capitalization is $100 million and it utilizes leverage for an additional $30 million, creating a total value of $130 million available for investment in longer-term income securities. If prevailing short-term interest rates are 3% and longer-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Trust’s financing costs on the $30 million of proceeds obtained from leverage are based on the lower short-term interest rates. At the same time, the securities purchased by the Trust with the proceeds from leverage earn income based on longer-term interest rates. In this case, the Trust’s financing cost of leverage is significantly lower than the income earned on the Trust’s longer-term investments acquired from such leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

However, in order to benefit shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the Trust’s return on assets purchased with leverage proceeds, income to shareholders will be lower than if the Trust had not used leverage. Furthermore, the value of the Trust’s portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the value of the Trust’s obligations under its leverage arrangement generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trust’s NAVs positively or negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that a Trust’s intended leveraging strategy will be successful.

Leverage also will generally cause greater changes in the Trusts’ NAVs, market prices and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the net asset value and market price of a Trust’s Common Shares than if the Trust were not leveraged. In addition, the Trust may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Trust to incur losses. The use of leverage may limit the Trust’s ability to invest in certain types of securities or use certain types of hedging strategies. The Trust will incur expenses in connection with the use of leverage, all of which are borne by shareholders and may reduce income to the shares.

Each Trust may utilize leverage through a credit facility or reverse repurchase agreements as described in the Notes to Financial Statements.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), each Trust is permitted to issue debt up to 33 1/3% of their total managed assets. A Trust may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Trust may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by its credit facility, which may be more stringent than those imposed by the 1940 Act. If a Trust segregates or designates on its books and records cash or liquid assets having values not less than the value of the Trust’s obligations under the reverse repurchase agreement (including accrued interest), then such transaction will not be considered a senior security and will not be subject to the foregoing limitations and requirements under the 1940 Act.

 

Derivative Financial Instruments     

 

The Trusts may invest in various derivative financial instruments, including financial futures contracts, forward 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    SEMI-ANNUAL REPORT    APRIL 30, 2014   


Schedule of Investments April 30, 2014 (Unaudited)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Asset-Backed Securities   

Par  

(000)

    Value  

Atrium CDO Corp., Series 5A, Class A4, 0.62%, 7/20/20 (a)(b)

     USD        9,000      $ 8,518,761   

SLM Student Loan Trust, Series 2004-B, Class A2, 0.43%, 6/15/21 (a)

             3,551        3,518,939   
Total Asset-Backed Securities — 0.7%                      12,037,700   
      
                          
Corporate Bonds                      

Aerospace & Defense — 0.2%

      

Huntington Ingalls Industries, Inc.:

      

6.88%, 3/15/18

       1,430        1,530,100   

7.13%, 3/15/21

       2,000        2,205,000   
      

 

 

 
                       3,735,100   

Airlines — 0.9%

      

Continental Airlines Pass-Through Trust:

      

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

       3,048        3,444,363   

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

       2,040        2,172,600   

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

       3,422        3,986,287   

United Airlines 2014-1 Class B Pass-Through Trust, Series B, 4.75%, 1/01/00

       4,200        4,239,396   

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

       1,866        1,940,772   
      

 

 

 
                       15,783,418   

Auto Components — 1.1%

      

Chrysler Group LLC/CG Co-Issuer, Inc., 8.25%, 6/15/21 (b)

       2,925        3,286,969   

Delphi Corp., 6.13%, 5/15/21

       870        968,963   

Icahn Enterprises LP/Icahn Enterprises Finance Corp. (b):

      

3.50%, 3/15/17

       265        266,988   

4.88%, 3/15/19

       3,950        4,004,312   

6.00%, 8/01/20

       4,538        4,787,590   

5.88%, 2/01/22

       2,669        2,709,035   

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

       2,470        2,534,837   
      

 

 

 
                       18,558,694   

Automobiles — 0.5%

      

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

       3,660        4,775,941   

General Motors Co. (b):

      

4.88%, 10/02/23

       1,875        1,938,281   

6.25%, 10/02/43

       940        1,029,300   
      

 

 

 
                       7,743,522   

Beverages — 0.2%

      

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

             3,004        3,109,140   

Building Products — 0.3%

      

Building Materials Corp. of America (b):

      

7.00%, 2/15/20

       1,430        1,519,375   

6.75%, 5/01/21

       3,600        3,897,000   
      

 

 

 
                       5,416,375   
Corporate Bonds   

Par  

(000)

    Value  

Capital Markets — 3.1%

      

The Goldman Sachs Group, Inc. (c):

      

6.25%, 9/01/17

     USD        625      $ 714,205   

7.50%, 2/15/19

       5,165        6,271,420   

5.25%, 7/27/21

       1,175        1,304,635   

5.75%, 1/24/22

       5,500        6,275,451   

6.25%, 2/01/41

       15,000        17,920,995   

Morgan Stanley (c):

      

5.63%, 9/23/19

       6,770        7,719,120   

5.50%, 7/28/21

       2,695        3,049,832   

5.00%, 11/24/25

       5,000        5,187,675   

UBS AG, 5.88%, 7/15/16 (c)

       3,450        3,795,186   
      

 

 

 
                       52,238,519   

Chemicals — 2.4%

      

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

       1,745        1,792,987   

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

       367        358,743   

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

       6,000        7,953,342   

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

       2,615        2,863,425   

CF Industries, Inc., 5.38%, 3/15/44

       2,500        2,624,140   

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

       632        655,700   

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

       2,370        2,358,150   

Huntsman International LLC:

      

4.88%, 11/15/20

       1,385        1,402,312   

8.63%, 3/15/21 (c)

       2,000        2,230,000   

Ineos Finance PLC (b):

      

8.38%, 2/15/19

       255        280,819   

7.50%, 5/01/20

       2,080        2,275,000   

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

       569        608,830   

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

       2,277        2,436,390   

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

       990        1,022,175   

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

       885        903,806   

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

       9,256        9,487,400   

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

       617        677,158   
      

 

 

 
                       39,930,377   

Commercial Banks — 5.9%

  

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

       7,430        7,920,075   

CIT Group, Inc.:

      

4.25%, 8/15/17

       4,600        4,818,500   

5.25%, 3/15/18

       4,030        4,322,175   

6.63%, 4/01/18 (b)

       335        373,944   

5.50%, 2/15/19 (b)

       5,147        5,545,893   

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

       2,900        3,243,024   

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

       3,775        3,797,329   

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

       12,000        13,395,480   

Credit Suisse Group AG, 7.50% (a)(b)(d)

       3,250        3,530,313   

Discover Bank:

      

8.70%, 11/18/19

       748        947,344   

4.20%, 8/08/23

       4,460        4,634,065   

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

       5,000        4,625,000   

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

       5,150        6,092,084   

Oversea-Chinese Banking Corp., Ltd., 4.00%, 10/15/24 (a)(b)

       2,000        1,991,404   

 

Portfolio Abbreviations      

 

     ABS    Asset-Backed Security    LIBOR    London Interbank Offered Rate
     ARB    Airport Revenue Bonds    OTC    Over-the-Counter
     CAD    Canadian Dollar    PIK    Payment-In-Kind
     CLO    Collateralized Loan Obligation    RB    Revenue Bonds
     EUR    Euro    REMIC    Real Estate Mortgage Investment Conduit
     GBP    British Pound    USD    U.S. Dollar

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2014    11


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)

  

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

     USD        6,110      $ 6,429,785   

RESPARCS Funding LP I, 8.00% (d)(e)(f)

       4,000        1,720,000   

Royal Bank of Scotland Group PLC, 6.00%, 12/19/23

       9,000        9,402,030   

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

       3,750        3,857,254   

Wells Fargo & Co. (c):

      

3.45%, 2/13/23

       2,325        2,273,564   

4.13%, 8/15/23

       4,000        4,079,392   

5.61%, 1/15/44

       4,119        4,591,309   
      

 

 

 
                       97,589,964   

Commercial Services & Supplies — 3.3%

  

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

       1,003        1,087,001   

Aviation Capital Group Corp. (b):

      

7.13%, 10/15/20 (c)

       31,000        34,810,427   

6.75%, 4/06/21

       7,850        8,778,914   

Brand Energy & Infrastructure Services, Inc., 8.50%, 12/01/21 (b)

       913        967,780   

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

       2,245        2,402,150   

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

       930        1,029,975   

United Rentals North America, Inc.:

      

7.38%, 5/15/20

       2,025        2,242,687   

7.63%, 4/15/22

       1,853        2,084,625   

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

       2,287        2,441,373   
      

 

 

 
                       55,844,932   

Communications Equipment — 0.8%

  

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

       8,695        9,303,650   

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

       649        702,542   

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

       2,400        2,634,000   
      

 

 

 
                       12,640,192   

Construction & Engineering — 0.1%

  

BlueLine Rental Finance Corp., 7.00%, 2/01/19 (b)

       413        441,910   

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

       673        713,380   

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

       825        825,000   
      

 

 

 
                       1,980,290   

Construction Materials — 1.0%

  

HD Supply, Inc.:

      

8.13%, 4/15/19

       7,300        8,084,750   

11.00%, 4/15/20

       2,740        3,233,200   

7.50%, 7/15/20

       2,905        3,144,662   

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

       1,380        1,597,350   
      

 

 

 
                       16,059,962   

Consumer Finance — 3.8%

  

Ally Financial, Inc.:

      

8.30%, 2/12/15

       5,290        5,574,337   

8.00%, 11/01/31

       6,195        7,618,525   

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

       11,610        11,468,091   

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

       8,069        8,835,337   

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

       3,252        3,266,618   

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

       2,550        2,588,449   

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

       5,620        5,844,800   

SLM Corp.:

      

3.88%, 9/10/15

       5,000        5,150,000   

6.25%, 1/25/16

       11,620        12,535,075   
      

 

 

 
                       62,881,232   
Corporate Bonds   

Par  

(000)

    Value  

Containers & Packaging — 1.3%

      

Ardagh Packaging Finance PLC, 7.38%, 10/15/17 (b)

     USD        410      $ 434,600   

Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc., 6.25%, 1/31/19 (b)

       906        944,505   

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

       7,360        7,893,600   

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

       200        238,605   

Beverage Packaging Holdings Luxembourg II SA, 5.63%, 12/15/16 (b)

       3,944        4,027,810   

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

       447        465,718   

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

       3,128        3,386,060   

Pactiv LLC, 7.95%, 12/15/25

       163        167,890   

Sealed Air Corp. (b):

      

6.50%, 12/01/20

       2,330        2,574,650   

8.38%, 9/15/21

       700        806,750   
      

 

 

 
                       20,940,188   

Diversified Consumer Services — 0.3%

      

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

       750        763,125   

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

       4,382        4,294,360   
      

 

 

 
                       5,057,485   

Diversified Financial Services — 8.7%

      

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

       3,937        4,242,118   

Bank of America Corp.:

      

3.75%, 7/12/16 (c)

       5,525        5,833,157   

5.00%, 5/13/21 (c)

       17,100        18,843,704   

5.70%, 1/24/22 (c)

       2,590        2,965,268   

4.00%, 4/01/24

       6,975        7,010,140   

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

       13,440        14,803,743   

Citigroup, Inc. (c):

      

4.45%, 1/10/17

       4,800        5,184,614   

8.50%, 5/22/19

       464        591,168   

6.68%, 9/13/43

       4,125        4,942,851   

Ford Motor Credit Co. LLC:

      

8.00%, 12/15/16

       4,000        4,665,668   

General Motors Financial Co., Inc.:

      

5.88%, 8/02/21

       9,420        10,919,476   

6.75%, 6/01/18

       1,700        1,933,750   

4.25%, 5/15/23

       1,681        1,649,481   

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

       8,000        8,942,400   

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

       5,450        5,607,903   

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

       2,105        2,204,988   

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

       1,850        1,953,202   

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

       812        818,090   

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

       6,775        6,915,988   

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

       4,000        4,208,268   

Moody’s Corp., 6.06%, 9/07/17

       20,000        20,678,200   

Reynolds Group Issuer, Inc.:

      

7.13%, 4/15/19

       1,588        1,675,340   

9.00%, 4/15/19

       110        117,425   

7.88%, 8/15/19

       2,480        2,721,800   

9.88%, 8/15/19

       585        649,350   

5.75%, 10/15/20

       4,620        4,804,800   

6.88%, 2/15/21

       365        392,831   

8.25%, 2/15/21

       522        564,413   
      

 

 

 
                       145,840,136   

Diversified Telecommunication Services — 5.3%

  

 

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

       12,000        14,001,588   

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

       1,660        1,745,075   

Level 3 Financing, Inc.:

      

8.13%, 7/01/19

       11,171        12,218,281   

8.63%, 7/15/20

       2,240        2,508,800   

Telecom Italia Capital SA, 6.18%, 6/18/14

       2,177        2,190,062   

 

See Notes to Financial Statements.

 

                
12    SEMI-ANNUAL REPORT    APRIL 30, 2014   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Diversified Telecommunication Services (concluded)

  

 

Telefonica Emisiones SAU, 3.19%, 4/27/18

     USD        6,550      $ 6,788,394   

Verizon Communications, Inc. (c):

      

5.15%, 9/15/23

       8,775        9,672,999   

6.40%, 9/15/33

       9,475        11,424,870   

7.35%, 4/01/39

       7,825        10,277,472   

6.55%, 9/15/43

       13,225        16,312,958   

Windstream Corp., 7.75%, 10/15/20

       510        550,800   
      

 

 

 
                       87,691,299   

Electric Utilities — 3.7%

  

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

       9,900        11,143,371   

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

       3,650        3,782,174   

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

       5,550        6,235,270   

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

       5,000        5,012,440   

Mirant Mid Atlantic Pass-Through Trust:

      

Series B, 9.13%, 6/30/17

       1,386        1,500,880   

Series C, 10.06%, 12/30/28

       886        987,481   

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

       3,075        3,660,013   

Oncor Electric Delivery Co. LLC (c):

      

4.10%, 6/01/22

       4,150        4,399,303   

5.30%, 6/01/42

       2,750        3,112,585   

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

       12,000        15,707,304   

Puget Energy, Inc.:

      

6.00%, 9/01/21

       275        321,419   

5.63%, 7/15/22

       5,550        6,414,512   
      

 

 

 
                       62,276,752   

Electrical Equipment — 0.1%

  

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

             2,385        2,438,663   

Electronic Equipment, Instruments & Components — 0.3%

  

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

       2,600        3,100,500   

WireCo WorldGroup, Inc., 9.50%, 5/15/17

       1,605        1,641,113   
      

 

 

 
                       4,741,613   

Energy Equipment & Services — 2.3%

  

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

       375        399,375   

CGG, 6.50%, 6/01/21

       2,390        2,407,925   

Energy Transfer Partners LP, 5.20%, 2/01/22

       10,200        11,152,394   

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

       293        304,720   

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

       2,591        2,694,640   

Oil States International, Inc.:

      

6.50%, 6/01/19

       2,155        2,265,444   

5.13%, 1/15/23

       2,385        2,671,200   

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

       5,360        5,531,327   

Transocean, Inc.:

      

2.50%, 10/15/17

       1,300        1,322,240   

6.50%, 11/15/20

       3,795        4,288,639   

6.38%, 12/15/21

       4,655        5,260,699   

6.80%, 3/15/38

       720        778,026   
      

 

 

 
                       39,076,629   

Food & Staples Retailing — 0.7%

  

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

       4,415        4,768,200   

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

       1,170        1,272,375   

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

       5,150        5,874,450   
      

 

 

 
                       11,915,025   

Food Products — 1.8%

  

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

       2,600        2,721,758   

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

       5,000        6,319,735   

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

       5,000        5,312,795   

Mondelez International, Inc.:

      

6.50%, 8/11/17

       4,450        5,137,547   

6.13%, 8/23/18

       4,840        5,591,357   
Corporate Bonds   

Par  

(000)

    Value  

Food Products (concluded)

  

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

     USD        917      $ 898,660   

Post Holdings, Inc., 6.75%, 12/01/21 (b)

       1,044        1,093,590   

Sun Merger Sub, Inc. (b):

      

5.25%, 8/01/18

       1,389        1,448,032   

5.88%, 8/01/21

       715        751,644   
      

 

 

 
                       29,275,118   

Gas Utilities — 0.3%

  

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

       1,575        1,669,500   

Targa Resources Partners LP:

      

7.88%, 10/15/18

       2,355        2,502,187   

6.88%, 2/01/21

       1,265        1,356,713   
      

 

 

 
                       5,528,400   

Health Care Equipment & Supplies — 0.1%

  

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

             1,660        1,772,050   

Health Care Providers & Services — 3.6%

  

Aviv Healthcare Properties LP/Aviv Healthcare Capital Corp.:

      

7.75%, 2/15/19

       1,550        1,662,375   

6.00%, 10/15/21

       869        912,450   

CHS/Community Health Systems, Inc.:

      

5.13%, 8/15/18

       1,620        1,703,025   

6.88%, 2/01/22 (b)

       1,631        1,690,124   

HCA Holdings, Inc., 7.75%, 5/15/21

       4,549        4,998,214   

HCA, Inc.:

      

3.75%, 3/15/19

       4,364        4,396,730   

6.50%, 2/15/20

       10,421        11,619,415   

5.88%, 3/15/22

       340        364,650   

4.75%, 5/01/23

       445        437,212   

Tenet Healthcare Corp.:

      

6.25%, 11/01/18

       1,712        1,884,056   

4.75%, 6/01/20

       1,450        1,457,250   

6.00%, 10/01/20 (b)

       2,669        2,802,450   

4.50%, 4/01/21

       304        295,032   

4.38%, 10/01/21

       7,335        7,032,431   

8.13%, 4/01/22

       4,387        4,869,570   

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

       10,000        13,425,810   
      

 

 

 
                       59,550,794   

Health Care Technology — 0.4%

  

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

             6,500        6,861,992   

Hotels, Restaurants & Leisure — 1.1%

  

Caesars Entertainment Operating Co., Inc., 9.00%, 2/15/20

       3,958        3,450,383   

Caesars Entertainment Resort Properties LLC, 8.00%, 10/01/20 (b)

       4,618        4,802,720   

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

       2,131        2,320,126   

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

       3,895        3,885,262   

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

       494        518,700   

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

       1,718        1,735,180   

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

       1,758        1,784,370   
      

 

 

 
                       18,496,741   

Household Durables — 1.0%

  

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

       2,330        2,487,275   

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

       1,647        1,684,058   

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

       3,675        3,978,187   

KB Home:

      

7.25%, 6/15/18

       1,990        2,238,750   

7.00%, 12/15/21

       1,504        1,613,040   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2014    13


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Household Durables (concluded)

  

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

     USD        3,015      $ 3,572,775   

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

       1,537        1,552,370   
      

 

 

 
                       17,126,455   

Household Products — 0.1%

  

Spectrum Brands, Inc.:

      

6.38%, 11/15/20

       810        878,850   

6.63%, 11/15/22

       1,110        1,212,675   
      

 

 

 
                       2,091,525   

Independent Power Producers & Energy Traders — 0.3%

  

Calpine Corp. (b):

      

7.50%, 2/15/21

       195        213,038   

6.00%, 1/15/22

       878        932,875   

5.88%, 1/15/24

       823        844,604   

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

       656        695,360   

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

       1,927        1,931,817   
      

 

 

 
                       4,617,694   

Insurance — 6.3%

  

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

       1,204        1,276,240   

American International Group, Inc.:

      

3.80%, 3/22/17 (c)

       5,070        5,423,663   

8.25%, 8/15/18

       2,125        2,654,856   

6.40%, 12/15/20 (c)

       8,710        10,513,841   

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

       7,700        8,585,785   

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

       6,500        6,099,853   

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

       3,400        3,849,585   

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

       2,880        3,598,710   

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

       10,425        11,431,429   

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

       1,455        1,567,763   

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

       12,000        14,639,412   

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

       2,825        3,606,231   

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

       10,000        12,893,640   

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

       10,085        11,719,496   

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

       6,800        7,310,000   
      

 

 

 
                       105,170,504   

Internet Software & Services — 0.1%

  

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

             1,425        1,364,438   

IT Services — 1.5%

  

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

       12,085        13,761,794   

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

       2,400        2,616,000   

First Data Corp. (b):

      

7.38%, 6/15/19

       2,905        3,115,612   

6.75%, 11/01/20

       2,720        2,903,600   

8.25%, 1/15/21

       250        269,375   

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

       2,460        2,607,600   
      

 

 

 
                       25,273,981   

Life Sciences Tools & Services — 0.8%

  

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

             12,000        13,922,928   

Machinery — 0.1%

  

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

             1,907        2,021,420   

Media — 6.0%

  

A&E Television Networks LLC, 3.11%, 8/22/19

       5,000        4,975,000   
Corporate Bonds   

Par  

(000)

    Value  

Media (concluded)

  

AMC Networks, Inc.:

      

7.75%, 7/15/21

     USD        1,330      $ 1,489,600   

4.75%, 12/15/22

       685        683,288   

CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp. (b):

      

5.25%, 2/15/22

       249        255,225   

5.63%, 2/15/24

       212        217,830   

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

       349        349,000   

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

       10,205        10,905,560   

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

       5,000        6,805,410   

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

       4,005        4,775,962   

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

       8,575        9,290,875   

Gray Television, Inc., 7.50%, 10/01/20

       713        766,475   

Intelsat Jackson Holdings SA:

      

7.25%, 4/01/19

       710        760,588   

5.50%, 8/01/23 (b)

       2,909        2,847,184   

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

       6,025        5,967,943   

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

       463        504,670   

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

       1,394        1,428,850   

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

       1,471        1,533,517   

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

       1,725        1,916,906   

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

       9,575        11,339,098   

Numericable Group SA, 6.00%, 5/15/22 (b)(h)

       9,000        9,213,750   

Sirius XM Radio, Inc., 4.25%, 5/15/20 (b)

       2,300        2,208,000   

Time Warner Cable, Inc., 6.55%, 5/01/37

       3,519        4,314,164   

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

      

7.50%, 3/15/19

       3,530        3,803,575   

5.50%, 1/15/23

       1,000        1,010,000   

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

       4,793        4,888,860   

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

       7,750        8,016,600   
      

 

 

 
                       100,267,930   

Metals & Mining — 3.1%

  

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

       5,000        4,845,245   

ArcelorMittal, 6.13%, 6/01/18

       2,575        2,822,844   

Barrick Gold Corp., 4.10%, 5/01/23

       5,000        4,868,695   

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

       2,194        2,106,240   

Constellium NV:

      

4.63%, 5/15/21

     EUR        490        679,801   

5.75%, 5/15/24 (b)

     USD        1,178        1,208,923   

FMG Resources August 2006 Property Ltd., 6.00%, 4/01/17 (b)(c)

       1,996        2,100,790   

Freeport-McMoRan Copper & Gold, Inc.:

      

3.55%, 3/01/22

       4,700        4,544,298   

3.88%, 3/15/23

       8,900        8,663,216   

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

       8,500        9,983,530   

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

       1,795        1,839,875   

Novelis, Inc., 8.75%, 12/15/20

       3,285        3,662,775   

Steel Dynamics, Inc.:

      

6.38%, 8/15/22

       1,430        1,562,275   

5.25%, 4/15/23

       163        165,649   

Wise Metals Group LLC/Wise Alloys Finance Corp., 8.75%, 12/15/18 (b)

       2,575        2,729,500   
      

 

 

 
                       51,783,656   

 

See Notes to Financial Statements.

 

                
14    SEMI-ANNUAL REPORT    APRIL 30, 2014   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Multi-Utilities — 1.9%

  

CenterPoint Energy, Inc. (c):

      

5.95%, 2/01/17

     USD        9,000      $ 10,118,754   

6.50%, 5/01/18

       9,675        11,207,017   

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

       8,000        10,257,312   
      

 

 

 
                       31,583,083   

Multiline Retail — 0.4%

  

Dollar General Corp., 3.25%, 4/15/23

       2,500        2,360,545   

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

       3,460        3,578,263   
      

 

 

 
                       5,938,808   

Oil, Gas & Consumable Fuels — 16.2%

  

Access Midstream Partners LP/ACMP Finance Corp.:

      

5.88%, 4/15/21

       3,267        3,479,355   

6.13%, 7/15/22

       1,600        1,730,000   

4.88%, 5/15/23

       411        416,138   

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

       75        86,662   

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

       649        663,603   

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

       656        708,480   

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

       3,207        3,287,175   

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

       1,145        1,225,150   

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

       1,076        1,178,220   

Chesapeake Energy Corp.:

      

6.63%, 8/15/20

       3,171        3,563,411   

6.88%, 11/15/20

       493        559,555   

6.13%, 2/15/21

       1,857        2,033,415   

5.75%, 3/15/23

       2,615        2,778,437   

Concho Resources, Inc.:

      

6.50%, 1/15/22

       562        615,390   

5.50%, 10/01/22

       226        237,018   

5.50%, 4/01/23

       1,365        1,421,306   

CONSOL Energy, Inc.:

      

8.25%, 4/01/20

       355        386,506   

5.88%, 4/15/22 (b)

       3,506        3,611,180   

Continental Resources, Inc.:

      

5.00%, 9/15/22

       11,232        11,877,840   

4.50%, 4/15/23

       469        492,849   

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

       710        741,950   

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

       1,074        1,114,829   

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

       2,690        2,681,365   

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

       2,572        2,446,615   

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

       1,812        1,870,890   

El Paso LLC:

      

7.80%, 8/01/31

       197        211,563   

7.75%, 1/15/32

       3,153        3,406,864   

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

       2,345        3,048,371   

El Paso Pipeline Partners Operating Co. LLC, 6.50%, 4/01/20

       5,075        5,901,119   

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

       6,000        7,904,946   

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

       2,351        2,527,325   

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

       12,000        14,183,376   

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

       3,833        4,115,684   

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

       2,525        2,638,625   

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

       12,000        14,271,672   

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

       752        752,383   
Corporate Bonds   

Par  

(000)

    Value  

Oil, Gas & Consumable Fuels (continued)

  

Kodiak Oil & Gas Corp.:

      

8.13%, 12/01/19

     USD        3,145      $ 3,490,950   

5.50%, 2/01/22

       540        553,500   

Laredo Petroleum, Inc., 7.38%, 5/01/22

       900        992,250   

Linn Energy LLC/Linn Energy Finance Corp.:

      

7.25%, 11/01/19 (b)

       1,224        1,265,310   

8.63%, 4/15/20

       480        517,800   

7.75%, 2/01/21

       475        508,250   

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

       4,600        4,809,806   

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

       1,369        1,475,097   

MEG Energy Corp. (b):

      

6.50%, 3/15/21

       3,839        4,040,547   

7.00%, 3/31/24

       3,598        3,813,880   

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

       885        932,569   

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

       4,615        5,352,883   

Oasis Petroleum, Inc.:

      

7.25%, 2/01/19

       915        976,763   

6.50%, 11/01/21

       1,025        1,096,750   

6.88%, 3/15/22 (b)

       885        960,225   

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

       10,000        12,517,140   

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

       1,537        1,494,732   

Parker Drilling Co., 7.50%, 8/01/20

       1,255        1,342,850   

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

       191        208,668   

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

       1,225        1,344,438   

Peabody Energy Corp.:

      

6.00%, 11/15/18

       2,527        2,684,937   

6.25%, 11/15/21

       2,503        2,540,545   

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

       2,691        3,040,830   

Petrobras International Finance Co. (c):

      

3.88%, 1/27/16

       12,550        12,921,794   

5.38%, 1/27/21

       3,385        3,466,643   

Petroleos Mexicanos:

      

3.50%, 1/30/23

       5,000        4,737,500   

4.88%, 1/18/24

       2,000        2,069,500   

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

       3,980        4,278,500   

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

       1,665        1,964,842   

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

       11,500        11,960,000   

Range Resources Corp.:

      

6.75%, 8/01/20

       1,760        1,896,400   

5.00%, 8/15/22

       32        32,880   

5.00%, 3/15/23

       75        76,500   

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

       4,351        4,100,817   

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

       1,035        1,122,975   

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

       3,448        3,508,340   

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

       10,000        11,043,310   

Sabine Pass Liquefaction LLC, 5.63%, 2/01/21

       7,393        7,633,272   

Sabine Pass Liquified Natural Gas LP, 7.50%, 11/30/16

       5,965        6,621,150   

SandRidge Energy, Inc.:

      

8.75%, 1/15/20

       139        150,294   

7.50%, 3/15/21

       325        345,313   

7.50%, 2/15/23

       1,291        1,368,460   

SM Energy Co.:

      

6.63%, 2/15/19

       903        965,081   

6.50%, 11/15/21

       1,160        1,247,000   

6.50%, 1/01/23

       322        346,955   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2014    15


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)

  

Stone Energy Corp., 7.50%, 11/15/22

     USD        1,290      $ 1,399,650   

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

       1,614        1,735,050   

Ultra Petroleum Corp., 5.75%, 12/15/18 (b)

       778        818,845   

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

       5,125        5,733,163   

Whiting Petroleum Corp.:

      

5.00%, 3/15/19

       3,550        3,736,375   

5.75%, 3/15/21

       2,341        2,510,722   

The Williams Cos., Inc.:

      

3.70%, 1/15/23

       5,000        4,616,640   

8.75%, 3/15/32

       2,478        3,079,780   
      

 

 

 
                       269,617,738   

Paper & Forest Products — 2.3%

  

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

       1,473        1,565,062   

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

       532        514,710   

International Paper Co. (c):

      

7.50%, 8/15/21

       9,675        12,200,117   

8.70%, 6/15/38

       4,000        5,903,268   

7.30%, 11/15/39

       10,000        13,419,220   

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

       2,130        2,353,650   

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

       2,900        3,132,000   
      

 

 

 
                       39,088,027   

Pharmaceuticals — 2.3%

  

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

       5,675        5,529,408   

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

     EUR        400        605,689   

Endo Finance Co., 5.75%, 1/15/22 (b)

     USD        1,559        1,609,667   

Endo Health Solutions, Inc., 7.25%, 1/15/22

       499        545,158   

Forest Laboratories, Inc. (b):

      

4.38%, 2/01/19

       2,924        3,110,405   

5.00%, 12/15/21

       1,631        1,743,131   

Grifols Worldwide Operations Ltd., 5.25%, 4/01/22 (b)

       1,613        1,637,195   

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

       6,420        8,458,247   

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

       3,250        3,420,076   

Salix Pharmaceuticals, Ltd. 6.00%, 1/15/21 (b)

       697        747,533   

Valeant Pharmaceuticals International (b):

      

6.75%, 8/15/18

       6,955        7,528,787   

6.38%, 10/15/20

       2,355        2,531,625   

5.63%, 12/01/21

       1,615        1,679,600   
      

 

 

 
                       39,146,521   

Professional Services — 0.5%

  

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

       2,158        2,492,490   

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

       5,750        5,945,534   
      

 

 

 
                       8,438,024   

Real Estate Investment Trusts (REITs) — 2.8%

  

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

       10,000        11,642,330   

DDR Corp.:

      

4.75%, 4/15/18

       2,140        2,325,585   

7.88%, 9/01/20

       2,650        3,314,098   

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

       10,000        11,302,180   

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

       999        1,011,488   

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

       3,450        3,904,275   

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

       3,600        3,538,696   

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

       5,225        5,593,472   
Corporate Bonds   

Par  

(000)

    Value  

Real Estate Investment Trusts (REITs) (concluded)

  

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

     USD        3,835      $ 4,167,951   
      

 

 

 
                       46,800,075   

Real Estate Management & Development — 0.7%

  

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

       1,805        1,759,875   

Northwest Florida Timber Finance LLC, 4.75%, 3/04/29 (b)

       4,485        4,423,107   

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

       2,085        2,324,775   

Realogy Group LLC/Realogy Co-Issuer Corp., 4.50%, 4/15/19 (b)

       1,147        1,152,735   

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

       1,625        1,783,437   
      

 

 

 
                       11,443,929   

Road & Rail — 1.6%

  

Avis Budget Car Rental LLC/Avis Budget Finance, Inc., 2.99%, 12/01/17 (a)(b)

       600        603,750   

The Hertz Corp.:

      

4.25%, 4/01/18

       983        1,014,947   

6.75%, 4/15/19

       1,167        1,251,607   

5.88%, 10/15/20

       925        980,500   

7.38%, 1/15/21

       310        341,388   

6.25%, 10/15/22

       1,560        1,669,200   

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

       17,200        20,200,093   
      

 

 

 
                       26,061,485   

Semiconductors & Semiconductor Equipment — 0.5%

  

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

       5,515        6,469,569   

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

       1,655        1,750,163   
      

 

 

 
                       8,219,732   

Software — 0.4%

  

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

       2,190        2,458,275   

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

       4,435        4,468,263   
      

 

 

 
                       6,926,538   

Specialty Retail — 1.0%

  

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

       6,125        7,043,750   

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

       3,050        3,477,000   

New Academy Finance Co. LLC/New Academy Finance Corp., 8.00% (8.00% Cash or 8.75% PIK) 6/15/18 (b)(i)

       485        497,130   

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

       355        382,269   

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

       5,000        5,740,035   
      

 

 

 
                       17,140,184   

Textiles, Apparel & Luxury Goods — 0.2%

  

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

       1,674        1,740,960   

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

       1,406        1,455,210   
      

 

 

 
                       3,196,170   

Tobacco — 1.9%

  

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

       13,392        22,377,376   

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

       8,375        8,829,762   
      

 

 

 
                       31,207,138   

Trading Companies & Distributors — 0.7%

  

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

      

6.13%, 11/30/19

       4,000        4,190,000   

5.25%, 5/30/23

       3,000        3,142,500   

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

       3,435        3,575,062   
      

 

 

 
                       10,907,562   

 

See Notes to Financial Statements.

 

                
16    SEMI-ANNUAL REPORT    APRIL 30, 2014   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Transportation Infrastructure — 0.9%

  

CEVA Group PLC (b):

      

4.00%, 5/01/18

     USD        3,310      $ 3,094,850   

7.00%, 3/01/21

       1,067        1,097,676   

Penske Truck Leasing Co. LP/PTL Finance Corp., 4.88%, 7/11/22 (b)

       10,500        11,242,917   
      

 

 

 
                       15,435,443   

Wireless Telecommunication Services — 5.6%

  

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

      

2.38%, 9/08/16

       12,495        12,845,135   

3.13%, 7/16/22

       1,275        1,232,498   

American Tower Corp.:

      

4.50%, 1/15/18

       6,500        7,027,345   

3.40%, 2/15/19

       2,000        2,062,246   

5.05%, 9/01/20

       500        539,159   

5.90%, 11/01/21 (c)

       3,770        4,271,881   

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

       1,880        1,931,700   

Crown Castle Towers LLC (b):

      

5.50%, 1/15/37

       4,000        4,333,200   

4.17%, 8/15/37

       3,000        3,196,569   

6.11%, 1/15/40

       4,555        5,272,034   

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

       3,440        3,663,600   

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

       1,285        1,301,063   

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

       13,975        14,959,511   

Sprint Communications, Inc. (b):

      

9.00%, 11/15/18

       5,290        6,447,188   

7.00%, 3/01/20

       9,302        10,732,182   

Sprint Corp. (b):

      

7.88%, 9/15/23

       3,630        4,002,075   

7.13%, 6/15/24

       1,625        1,706,250   

T-Mobile USA, Inc.:

      

6.63%, 4/28/21

       2,680        2,894,400   

6.73%, 4/28/22

       2,495        2,691,481   

6.84%, 4/28/23

       1,405        1,512,131   
      

 

 

 
                       92,621,648   
Total Corporate Bonds — 112.8%                      1,882,387,238   
      
                          
Foreign Agency Obligations                      

Indonesia Government International Bond, 5.88%, 1/15/24 (b)

       4,400        4,763,000   

Mexico Government International Bond, 4.75%, 3/08/44

             2,300        2,219,500   
Total Foreign Agency Obligations — 0.4%                      6,982,500   
      
                          
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        5,424,450   

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

             10,000        12,178,000   
Total Municipal Bonds — 1.1%                      17,602,450   
      
                          
U.S. Government Sponsored Agency
Securities — 0.2%
                     

Agency Obligations — 0.2%

      

Fannie Mae, 0.00%, 10/09/19 (c)(j)

             3,945        3,424,217   
U.S. Treasury Obligations — 5.3%   

Par  

(000)

    Value  

U.S. Treasury Note, 2.75%, 2/15/24 (c)

     USD        88,430      $ 89,203,762   
      
                          
Preferred Securities                      
Capital Trusts                      

Capital Markets — 1.4%

      

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

       3,000        3,330,000   

The Goldman Sachs Group, Inc., Series L, 5.70% (a)(d)

       2,950        3,012,688   

State Street Capital Trust IV, 1.23%, 6/01/77 (a)(c)

       20,845        17,353,463   
      

 

 

 
                       23,696,151   

Commercial Banks — 2.6%

  

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

      

5.93%

       2,125        2,263,125   

7.43%

       2,225        2,486,438   

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

       5,000        5,600,000   

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

       5,000        5,800,000   

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

       11,835        17,279,100   

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

       4,540        4,614,574   

Wells Fargo & Co., Series S, 5.90% (a)(d)

       4,640        4,751,824   
      

 

 

 
                       42,795,061   

Diversified Financial Services — 3.5%

  

Bank of America NA, Series U, 5.20% (a)(d)

       9,000        8,460,000   

Citigroup, Inc., Series M, 6.30% (a)(d)

       5,000        4,981,250   

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

      

Series B, 6.25%

       9,100        9,884,875   

Series C, 5.25% (c)

       3,000        2,958,750   

JPMorgan Chase & Co. (a)(d):

      

6.75%

       7,775        8,241,500   

Series Q, 5.15%

       4,000        3,785,000   

Series R, 6.00% (c)

       17,780        17,691,100   

Morgan Stanley, Series H, 5.45% (a)(d)

       2,200        2,219,250   
      

 

 

 
                       58,221,725   

Electric Utilities — 0.5%

  

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

             8,300        8,383,000   

Insurance — 7.3%

      

ACE Capital Trust II, 9.70%, 4/01/30

       7,000        10,281,068   

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

       500        659,109   

American International Group, Inc., 8.18%, 5/15/68 (a)

       3,755        5,022,313   

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

       10,400        11,206,000   

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

      

6.38%

       4,900        5,255,250   

6.46%

       6,000        6,432,000   

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

       2,000        2,673,020   

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

       7,400        8,214,000   

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

       4,890        5,391,416   

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

       500        517,500   

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

       3,500        4,130,000   

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

       4,750        4,749,525   

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

       8,325        12,570,750   

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

       9,005        9,344,488   

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

       9,775        10,605,875   

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

       6,100        6,420,250   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2014    17


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Capital Trusts   

Par  

(000)

    Value  

Insurance (concluded)

      

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

     USD        12,000      $ 12,180,000   

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

       4,450        4,761,500   

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

       1,920        1,891,200   
      

 

 

 
                       122,305,264   

Multi-Utilities — 0.3%

  

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

             4,400        4,774,000   

Oil, Gas & Consumable Fuels — 1.4%

      

Enterprise Products Operating LLC (a):

      

7.00%, 6/01/67

       2,500        2,637,500   

Series A, 8.38%, 8/01/66

       9,325        10,560,562   

TransCanada PipeLines Ltd., 6.35%, 5/15/67

       9,400        9,764,250   
      

 

 

 
                       22,962,312   

Real Estate Investment Trusts (REITs) — 0.5%

  

Sovereign Real Estate Investment Trust, 12.00% (b)

             7,000        8,771,210   

Road & Rail — 0.4%

      

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

             6,125        6,768,125   
Total Capital Trusts — 17.9%                      298,676,848   
      
                          
Preferred Stocks                      

Capital Markets — 0.6%

      

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

       162,450        3,838,693   

SCE Trust III, 5.75% (a)

       31,650        816,887   

State Street Corp., Series D, 5.90% (a)

       220,495        5,724,050   
      

 

 

 
                       10,379,630   

Commercial Banks — 0.7%

  

Wells Fargo & Co., 5.85% (a)

             438,900        11,126,115   

Consumer Finance — 0.0%

  

Ally Financial, Inc., Series A, 8.50% (a)

             24,509        662,723   

Diversified Financial Services — 0.3%

  

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

             206,000        5,526,980   

Electric Utilities — 0.1%

  

Entergy Louisiana LLC, 5.25%

             90,000        2,205,900   

Insurance — 0.2%

  

The Allstate Corp., Series E, 6.63%

             119,407        3,081,895   

Machinery — 0.1%

  

Stanley Black & Decker, Inc., 6.25% (k)

             11,107        1,242,096   

Media — 0.4%

  

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

             5,600        5,824,000   
Preferred Stocks   

Par  

(000)

    Value  

Real Estate Investment Trusts (REITs) — 0.2%

  

Ventas Realty LP/Ventas Capital Corp., 5.45%

     USD        75,000      $ 1,834,500   

Vornado Realty Trust, Series K, 5.70%

       50,000        1,183,000   
      

 

 

 
                       3,017,500   

Wireless Telecommunication Services — 1.2%

  

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

       15,143        18,819,910   

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

       8,192        817,889   
      

 

 

 
                       19,637,799   
Total Preferred Stocks — 3.8%                      62,704,638   
      
                          
Trust Preferred — 0.6%                      

Diversified Financial Services — 0.6%

  

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

             353,111        9,555,600   
Total Preferred Securities — 22.2%                      370,937,086   
Total Long-Term Investments
(Cost — $2,224,539,795) — 142.8%
                2,382,574,953   
      
                          
Short-Term Securities           Shares         

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (l)(m)

             2,444,842        2,444,842   
Total Short-Term Securities
(Cost — $2,444,842) — 0.1%
                2,444,842   
      
                          
Options Purchased                      
(Cost — $8,311,840) — 0.3%                      5,711,184   
Total Investments Before Options Written
(Cost — $2,235,296,477) — 143.2%
                     2,390,730,979   
      
                          
Options Written                      
(Premiums Received — $6,393,785) — (0.2)%                (3,658,725
Total Investments, Net of Options Written — 143.0%          2,387,072,254   
Liabilities in Excess of Other Assets — (43.0)%          (718,035,368
      

 

 

 
Net Assets — 100.0%        $ 1,669,036,886   
      

 

 

 

 

Notes to Schedule of Investments

 

(a)   Variable rate security. Rate shown is as of report date.

 

(b)   Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(c)   All or a portion of security has been pledged as collateral in connection with outstanding reverse repurchase agreements.

 

(d)   Security is perpetual in nature and has no stated maturity date.

 

(e)   Non-income producing security.

 

(f)   Issuer filed for bankruptcy and/or is in default of principal and/or interest payments.

 

(g)   Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown is as of report date.

 

See Notes to Financial Statements.

 

                
18    SEMI-ANNUAL REPORT    APRIL 30, 2014   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

 

 

(h)   When-issued security. Unsettled when-issued transactions were as follows:

 

Counterparty      Value        Unrealized
Appreciation
 

J.P. Morgan Securities LLC

     $ 9,213,750         $ 213,750   

 

(i)   Represents a payment-in-kind security which may pay interest/dividends in additional par/shares and/or in cash. Rates shown are the current rate and possible payment rates.

 

(j)   Zero-coupon bond.

 

(k)   Convertible security.

 

(l)   Investments in issuers considered to be an affiliate of the Trust during the six months ended April 30, 2014, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at October 31,
2013
       Net
Activity
       Shares Held
at April 30,
2014