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: 10/31/2015

Date of reporting period: 04/30/2015


Item 1 – Report to Stockholders


APRIL 30, 2015

 

 

 

 

 

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  

The Markets in Review

    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

    54   

Statements of Operations

    55   

Statements of Changes in Net Assets

    56   

Statements of Cash Flows

    58   

Financial Highlights

    59   

Notes to Financial Statements

    62   

Officers and Trustees

    76   

Additional Information

    77   

 

                
2    SEMI-ANNUAL REPORT    APRIL 30, 2015   


The Markets in Review

 

Dear Shareholder,

Financial market performance was generally positive for the 6- and 12-month periods ended April 30, 2015, although volatility increased from the remarkably low levels seen in recent years. In 2014, as the U.S. Federal Reserve (the “Fed”) gradually reduced its bond buying program (which ultimately ended in October), U.S. interest rates surprisingly trended lower and stock prices forged ahead despite high valuations on the back of a multi-year bull market.

Around mid-year, however, geopolitical tensions intensified in Ukraine and the Middle East and oil prices became highly volatile, stoking worries about economic growth outside the United States. As the U.S. economy continued to post stronger data, investors grew concerned that the Fed would raise short-term rates sooner than previously anticipated. The U.S. dollar appreciated and global credit markets tightened, ultimately putting a strain on investor flows, and financial markets broadly weakened in the third quarter.

U.S. economic growth picked up considerably in the fourth quarter while the broader global economy showed signs of slowing. U.S. markets significantly outperformed international markets during this period even as the European Central Bank (“ECB”) and the Bank of Japan eased monetary policy, which drove further strengthening in the U.S. dollar. Oil prices plummeted due to a global supply-and-demand imbalance, sparking a selloff in energy-related assets and stress in emerging markets. Fixed income investors piled into U.S. Treasuries as their persistently low yields became attractive as compared to international sovereign debt.

Equity markets reversed in 2015, with U.S. stocks underperforming international markets. Investors had held high expectations for the U.S. economy, but after a harsh winter, first-quarter data disappointed and high valuations took their toll on U.S. stocks. The continued appreciation of the dollar was an additional headwind for exporters. Although U.S. economic momentum had broadly weakened, the labor market — a key determinant for the Fed’s decision on the future of interest rate policy — showed improvement, keeping investors on edge about when to expect the first rate hike.

In contrast, economic reports in Europe and Asia easily beat investors’ very low expectations, and accommodative policies from central banks in those regions helped international equities rebound. The ECB’s asset purchase program was the largest in scale and effect on the markets. Global sentiment improved with a ceasefire in Ukraine and an improving outlook for Greece’s continued membership in the eurozone. Emerging market stocks rebounded in April as oil prices appeared to stabilize.

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 blackrock.com for further insight about investing in today’s markets.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of April 30, 2015  
    6-month     12-month  

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

    4.40     12.98

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

    4.65        9.71   

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

    6.81        1.66   

Emerging market equities
(MSCI Emerging Markets
Index)

    3.92        7.80   

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

Bill Index)

    0.01        0.02   

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

    3.59        8.03   

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

    2.06        4.46   

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

    1.27        4.86   

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

    1.52        2.59   
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, 2015    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, 2015, the Trust returned 3.66% based on market price and 2.71% based on NAV. For the same period, the closed-end Lipper Corporate BBB-Rated Debt Funds (Leveraged) category posted an average return of 3.16% based on market price and 1.90% 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 the Trust’s absolute performance based on NAV:

What factors influenced performance?

 

Ÿ  

The Trust’s positions in high-yield bonds and capital securities (which combine the features of corporate bonds and preferred stock and typically offer higher yields than corporate debt since they are lower in the capital structure), which outperformed the broader investment-grade corporate bond market, made a positive contribution to performance during the six-month period. On a sector basis, allocations to the financials, industrials and utilities sectors had a positive impact on performance.

 

Ÿ  

The Trust utilized derivatives during the period for the purposes of managing risk in its allocation to financials and targeting specific positioning with respect to the yield curve. On balance, these positions detracted from performance. The Trust also held a conservative duration positioning during the period, which prevented it from fully benefiting from the modest decline in bond yields.

Describe recent portfolio activity.

 

Ÿ  

The Trust had a bias toward higher quality securities, and it continued to look for opportunities to increase credit quality. In addition, the Trust reduced its overweight position in 30-year corporate bonds late in 2014.

Ÿ  

The Trust added to its position in the energy sector by increasing exposure to the midstream sub-sector, which is largely made up of gas pipeline companies. The Trust remained overweight in financials, particularly in the life insurance industry, as the financial sector typically features lower event risk than the industrials sector. Within the financial sector, the Trust maintained an allocation to capital securities given the attractive yield premium available by moving down the capital structure.

Describe portfolio positioning at period end.

 

Ÿ  

The Trust remained defensively positioned on the belief that overall valuations in the credit sectors were not particularly attractive. However, the investment advisor continued to look for ways to capitalize on market volatility and idiosyncratic opportunities. The Trust maintained a bias toward higher-quality securities and sought to avoid the risks associated with events such as mergers and acquisitions or other activities designed to benefit equity investors over bondholders.

 

Ÿ  

The Trust remained underweight in the industrials sector, with its largest underweights in the consumer cyclical, consumer non-cyclical, technology, and energy industries. Within the energy space, the Trust held a significant position in gas pipeline companies, which are less sensitive to fluctuations in the price of the underlying commodity.

 

Ÿ  

Believing U.S. bond yields are too low given the nation’s healthy economic fundamentals, the Trust closed the period with a short duration (or an interest-rate sensitivity below that of the benchmark). The Trust maintained a bias toward a flattening yield curve on the belief that rate hikes by the U.S. Federal Reserve could have a disproportionate impact on short-term bonds. (Prices and yields move in opposite directions). The Trust is more cautious on the international debt markets, however, as quantitative easing actions in Europe and Asia are likely to exacerbate a misallocation of capital flows and further delay the undertaking of true fiscal reform.

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.

 

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, 2015 ($13.54)1

  7.13%

Current Monthly Distribution per Common Share2

  $0.0805

Current Annualized Distribution per Common Share2

  $0.9660

Economic Leverage as of April 30, 20153

  32%

 

  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.

 

                
4    SEMI-ANNUAL REPORT    APRIL 30, 2015   


     BlackRock Credit Allocation Income Trust

 

 

Market Price and Net Asset Value Per Share Summary

 

           
      4/30/15      10/31/14      Change      High      Low  

Market Price

     $13.54         $13.54         0.00%         $13.65         $12.92   

Net Asset Value

     $15.22         $15.36         (0.91)%         $15.41         $14.93   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments
Portfolio Composition   4/30/15     10/31/141  

Corporate Bonds

    76     78

Preferred Securities

    16        16   

Asset-Backed Securities

    4        3   

U.S. Treasury Obligations

    2        1   

Municipal Bonds

    1        1   

Foreign Agency Obligations

    1        1   

Other2

             

 

  1   

Information has been revised to conform to current year presentation.

 

  2   

Includes a less than 1% holding in each of the following investment types: Options Purchased, Options Written, U.S. Sponsored-Agency Securities and Short-Term Securities.

Credit Quality Allocation3,4  

4/30/15

    10/31/141  

AAA/Aaa5

    3     2

AA/Aa

    2        2   

A

    19        17   

BBB/Baa

    45        45   

BB/Ba

    19        21   

B

    9        9   

CCC/Caa

    1        2   

N/R

    2        2   

 

  3   

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either Standard & Poor’s (“S&P”) or Moody’s Investors Service (“Moody’s”) if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  4   

Excludes Short-Term Securities, Options Purchased and Options Written.

 

  5   

The investment advisor evaluates the credit quality of not-rated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors, individual investments and/or issuer. Using this approach, the investment advisor has deemed U.S. Government Sponsored Agency Securities and U.S. Treasury Obligations as AAA/Aaa.

 

                
   SEMI-ANNUAL REPORT   

APRIL 30, 2015

   5


Trust Summary as of April 30, 2015    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, 2015, the Trust returned 5.78% based on market price and 3.98% based on NAV. For the same period, the closed-end Lipper Loan Participation Funds category posted an average return of 5.86% based on market price and 2.60% based on NAV. All returns reflect reinvestment of dividends. 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 the Trust’s absolute performance based on NAV:

What factors influenced performance?

 

Ÿ  

After declining in late 2014 along with global risk markets more generally, the market for floating rate loan interests (i.e. bank loans) recovered steadily from around mid-December through the end of the period. Within the loan portfolio, individual security selection in the electric sector, particularly Energy Future Holdings Corp., as well as a focus on higher quality companies in the independent energy sector, were the most significant positive contributors. The Trust’s use of leverage was also a contributor in a strong market for loans, as were modest allocations to collateralized loan obligations (“CLOs”) and high yield bonds.

 

Ÿ  

Allocations to loans within metals & mining and oil field services detracted from performance as those sectors declined.

 

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. During the period, the Trust modestly increased its exposure to loans rated BB and B, while reducing exposure to CCC-rated loans. The Trust also modestly increased holdings of CLOs given attractive valuations. With respect to individual holdings, the Trust reduced its position in Caesars Entertainment Resort Properties LLC as the company continued its restructuring, and added to its position in Valeant Pharmaceuticals International as the company did a large acquisition financing.

Describe portfolio positioning at period end.

 

Ÿ  

At period end, the Trust held 93% of its total portfolio in bank loans, with the remainder primarily in corporate bonds and collateralized loan obligations. The Trust continued to favor loans rated B where the investment advisor was comfortable with credit quality, in view of the incremental income they offered versus BB loans. The Trust had a cautious stance with respect to loans rated CC and below and nonrated loans, as well as smaller, less liquid loans. The Trust’s largest portfolio positions included Valeant Pharmaceuticals (pharmaceuticals), Level 3 Communications (wirelines) and HD Supply (building materials).

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.

 

Trust Information

Symbol on NYSE

   BGT

Initial Offering Date

   August 30, 2004

Current Distribution Rate on Closing Market Price as of April 30, 2015 ($13.50)1

   5.80%

Current Monthly Distribution per Common Share2

   $0.0653

Current Annualized Distribution per Common Share2

   $0.7836

Economic Leverage as of April 30, 20153

   29%

 

  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 bank borrowings 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.

 

                
6    SEMI-ANNUAL REPORT   

APRIL 30, 2015

  


     BlackRock Floating Rate Income Trust

 

 

Market Price and Net Asset Value Per Share Summary                              

 

      4/30/15      10/31/14      Change      High      Low  

Market Price

   $ 13.50       $ 13.18         2.43    $ 13.73       $ 12.58   

Net Asset Value

   $ 14.67       $ 14.57         0.69    $ 14.68       $ 14.12   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments
Portfolio Composition   

4/30/15

    10/31/141  

Floating Rate Loan Interests

     93     93

Corporate Bonds

     4        4   

Asset-Backed Securities

     2        2   

Common Stocks

     1        1   

Other

     2       3  

 

  1   

Information has been revised to conform to current year presentation.

 

  2   

Includes a less than 1% holding in each of the following investment types: Non-Agency Mortgage — Backed Securities, Other Interests, Investment Companies, Warrants, Short-Term Securities and Options Purchased.

 

  3   

Includes a less than 1% holding in each of the following investment types: Non-Agency Mortgage-Backed Securities, Other Interests, Warrants and Options Purchased.

 

Credit Quality Allocation4,5   

4/30/15

    10/31/141  

BBB/Baa

     6     7

BB/Ba

     45        38   

B

     42        43   

CCC/Caa

     4        4   

N/R

     3        8   

 

  4   

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P’s or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  5   

Excludes Short-Term Securities and Options Purchased.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2015    7


Trust Summary as of April 30, 2015    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, 2015, the Trust returned 3.42% based on market price and 3.75% based on NAV. For the same period, the closed-end Lipper General Bond Funds category posted an average return of 2.42% based on market price and 1.70% 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 the Trust’s absolute performance based on NAV:

What factors influenced performance?

 

Ÿ  

The Trust’s positions in high yield corporate bonds and bank capital securities were the most significant contributors to performance. The Trust also received positive contributions from its exposures to securitized assets in the form of commercial mortgage-backed securities, asset-backed securities (“ABS”) and non-agency mortgage-backed securities (“MBS”).

 

Ÿ  

The main detractor from the Trust’s performance came from its long positioning with respect to duration (sensitivity to interest rate movements).

Describe recent portfolio activity.

 

Ÿ  

With valuations increasingly stretched and market volatility elevated as event risk increased within the corporate credit space, the Trust’s exposure to corporate and high yield credit was marginally reduced over the reporting period. In contrast, the Trust’s exposure to ABS was increased as the investment manager viewed valuations there as relatively attractive given continued strong market fundamentals of healthy demand and limited supply. The Trust also added marginally to non-agency MBS as their spreads offered more attractive income than other fixed income securities.

Describe portfolio positioning at period end.

 

Ÿ  

The Trust continued to hold significant exposure to high yield and structured credit—including ABS and non-agency MBS—in order to maximize income within a market environment that is supportive of fixed income spread sectors.

 

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.

 

Trust Information     

Symbol on NYSE

  BIT

Initial Offering Date

  February 27, 2013

Current Distribution Rate on Closing Market Price as of April 30, 2015 ($17.59)1

  7.96%

Current Monthly Distribution per Common Share2

  $0.1167

Current Annualized Distribution per Common Share2

  $1.4004

Economic Leverage as of April 30, 20153

  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 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.

 

                
8    SEMI-ANNUAL REPORT   

APRIL 30, 2015

  


     BlackRock Multi-Sector Income Trust

 

 

Market Price and Net Asset Value Per Share Summary                              

 

     

4/30/15

     10/31/14      Change     High      Low  

Market Price

   $ 17.59       $ 17.79         (1.12 )%    $ 17.98       $ 16.57   

Net Asset Value

   $ 19.71       $ 19.87         (0.81 )%    $ 19.90       $ 19.15   

 

Market Price and Net Asset Value History Since Inception

 

LOGO

 

  1   

Commencement of operations.

 

Overview of the Trust’s Total Investments
Portfolio Composition  

4/30/15

    10/31/141  

Corporate Bonds

    33     35

Non-Agency Mortgage-Backed Securities

    29        29   

Asset-Backed Securities

    18        15   

Preferred Securities

    12        14   

Floating Rate Loan Interests

    5        5   

Short-Term Securities

    1        1   

Foreign Agency Obligations

    2        1   

Other2

             

 

  1   

Information has been revised to conform to current year presentation.

 

  2   

Includes a less than 1% holding in each of the following investment types: Options Purchased and Options Written.

 

Credit Quality Allocation3,4  

4/30/15

    10/31/141  

A

    3     3

BBB/Baa

    20        17   

BB/Ba

    26        25   

B

    15        17   

CCC/Caa

    20        21   

CC/Ca

    5        5   

D

             

N/R

    11        12   

 

  3   

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P’s or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  4   

Excludes Short-Term Securities, Options Purchased and Options Written.

 

                
   SEMI-ANNUAL REPORT   

APRIL 30, 2015

   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, is normally lower than the income earned by a Trust on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the Trust’s shareholders 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 leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the 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 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 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 incurs expenses in connection with the use of leverage, all of which are borne by shareholders and may reduce income to the shares. Moreover, to the extent the calculation of the Trust’s investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Trust’s investment advisor will be higher than if the Trust did not use leverage.

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”), BTZ and BGT are each permitted to issue debt up to 33 1/3% of their total managed assets and BIT is permitted to issue debt up to 50% of its total managed assets. A Trust may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Trust may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by 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. 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 manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage. Derivative financial instruments also 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 limit the amount of appreciation a Trust can realize on an investment and/or may result in lower distributions paid to shareholders. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

                
10    SEMI-ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments April 30, 2015 (Unaudited)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Asset-Backed Securities (a)   

Par  

(000)

    Value  

ACAS CLO Ltd., Class C (b):

      

Series 2014-1A, 3.18%, 7/18/26

     USD        750      $ 742,657   

Series 2014-2A, 3.47%, 1/15/27

       1,000        999,981   

ALM XII Ltd., Series 2015-12A, Class B, 3.53%, 4/16/27 (b)

       1,000        1,000,000   

ALM XIV Ltd., Series 2014-14A (b):

      

Class B, 3.23%, 7/28/26

       5,000        4,969,570   

Class C, 3.73%, 7/28/26

       5,000        4,781,378   

Anchorage Capital CLO Ltd., 3.28%, 4/28/26 (b)

       1,000        982,330   

Apidos CDO, Series 2012-9AR, Class CR, 3.18%, 7/15/23 (b)

       1,000        1,000,000   

Apidos CLO XVII, Series 2014-17A, Class B, 3.12%, 4/17/26 (b)

       1,000        990,874   

Apidos CLO XVIII, Series 2014-18A, Class C, 3.93%, 7/22/26 (b)

       1,800        1,749,029   

Atlas Senior Loan Fund V Ltd., Series 2014-1A (b):

      

Class C, 3.28%, 7/16/26

       1,000        984,970   

Class D, 3.73%, 7/16/26

       2,000        1,905,710   

Atlas Senior Loan Fund VI Ltd., Series 2014-6A, Class D, 3.98%, 10/15/26 (b)

       3,000        2,894,316   

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

       9,000        8,778,333   

Babson CLO Ltd., Series 2014-3A (b):

      

Class C1, 3.28%, 1/15/26

       1,500        1,500,000   

Class D1, 3.78%, 1/15/26

       1,000        953,750   

Battalion CLO VII Ltd., Series 2014-7A, Class C, 4.17%, 10/17/26 (b)

       1,000        976,457   

Benefit Street Partners CLO IV Ltd., Series 2014-IVA, Class B, 3.08%, 7/20/26 (b)

       1,250        1,221,875   

Benefit Street Partners CLO V Ltd., Series 2014-VA, Class D, 3.83%, 10/20/26 (b)

       1,500        1,446,384   

Benefit Street Partners CLO VI, Ltd., Series 2015-VIA, Class B, 3.20%, 4/18/27 (b)

       1,000        987,200   

Betony CLO, Ltd., Series 2015-1A, Class C, 3.41%, 4/15/27 (b)

       1,000        997,500   

BlueMountain CLO Ltd., Series 2011-1A, Class D, 4.26%, 8/16/22 (b)

       2,000        1,999,957   

Bowman Park CLO Ltd., Series 2014-1A, Class D2, 4.21%, 11/23/25 (b)

       1,000        996,197   

Carlyle Global Market Strategies CLO 2015-1, Ltd., Series 2015-1A, Class C, 3.41%, 4/20/27 (b)

       1,000        996,887   

Carlyle Global Market Strategies CLO Ltd., Series 2014-5A, Class C, 4.43%, 10/16/25 (b)

       1,000        1,000,684   

CIFC Funding Ltd., Series 2014-3A (b):

      

Class C1, 3.08%, 7/22/26

       1,500        1,472,763   

Class D, 3.68%, 7/22/26

       1,400        1,333,804   

Dryden 34 Senior Loan Fund, Series 2014-34A, Class C, 3.08%, 10/15/26 (b)

       750        740,473   

Galaxy CLO Ltd., Series 2014-18A, Class C1, 3.28%, 10/15/26 (b)

       1,750        1,749,970  

GoldenTree Loan Opportunities IX Ltd., Series 2014-9A, Class D, 3.78%, 10/29/26 (b)

       1,000        970,430   

Highbridge Loan Management 4-2014, Ltd., Series 4A-2014, Class B, 3.28%, 7/28/25 (b)

       1,000        981,677   
Asset-Backed Securities (a)   

Par  

(000)

    Value  

ING IM CLO Ltd., Series 2012-4A, Class C, 4.78%, 10/15/23 (b)

     USD        1,000      1,002,647   

Jamestown CLO Ltd., Series 2014-4A, Class C, 3.78%, 7/15/26 (b)

       3,250        3,111,735   

LCM XVIII LP, Series 18A, Class C1, 3.45%, 4/20/27 (b)

       1,000        1,000,000   

Limerock CLO III LLC, Series 2014-3A, Class C, 3.83%, 10/20/26 (b)

       1,000        969,000   

Madison Park Funding Ltd. (b):

      

Series 2012-10A, Class D, 4.53%, 1/20/25

       3,000        3,000,690   

Series 2012-8AR, Class CR, 3.08%, 4/22/22

       1,350        1,355,190   

Series 2012-8AR, Class DR, 4.13%, 4/22/22

       1,500        1,506,088   

Series 2014-14A, Class D, 3.88%, 7/20/26

       2,000        1,938,008   

Madison Park Funding XIII, Ltd., Series 2014-13A, Class C, 3.03%, 1/19/25 (b)

       1,000        988,333   

Madison Park Funding XV, Ltd., Series 2014-15A, Class B1, 3.46%, 1/27/26 (b)

       2,400        2,407,070   

Madison Park Funding XVI, Ltd., Series 2015-16A, Class B, 3.30%, 4/20/26 (b)

       1,000        990,100   

Octagon Investment Partners XX Ltd., Series 2014-1A (b):

      

Class C, 3.06%, 8/12/26

       750        736,287   

Class D, 3.91%, 8/12/26

       900        871,993   

Octagon Loan Funding Ltd., Series 2014-1A, Class D, 3.91%, 11/18/26 (b)

       1,500        1,451,048   

OZLM VII Ltd., Series 2014-7A, Class C, 3.87%, 7/17/26 (b)

       1,500        1,451,554   

OZLM VIII Ltd., Series 2014-8A, Class B, 3.27%, 10/17/26 (b)

       900        894,821   

OZLM XI, Ltd., Series 2015-11A, Class B, 3.27%, 1/30/27 (b)

       1,000        993,498   

Regatta IV Funding Ltd., Series 2014-1A (b):

      

Class C, 3.23%, 7/25/26

       1,500        1,477,234   

Class D, 3.78%, 7/25/26

       1,000        958,626   

Regatta V Funding Ltd., Series 2014-1A (b):

      

Class B, 3.23%, 10/25/26

       1,000        987,488   

Class C, 3.68%, 10/25/26

       1,000        955,309   

Silver Spring CLO Ltd., Series 2014-1A, Class D, 3.72%, 10/15/26 (b)

       750        697,687   

SLM Student Loan Trust, Series 2004-B, Class A2, 0.47%, 6/15/21

       2,368        2,354,586   

Sound Point CLO Ltd., Series 2014-3A, Class D, 3.89%, 1/23/27 (b)

       1,000        957,500   

Symphony CLO XV Ltd., Series 2014-15A (b):

      

Class C, 3.47%, 10/17/26

       1,500        1,502,116   

Class D, 4.02%, 10/17/26

       1,000        984,500   

Symphony CLO, Ltd., Series 2012-10AR, Class CR, 3.12%, 7/23/23 (b)

       1,000        1,000,000   

Venture XIII CLO Ltd., Series 2013-13A, Class D, 3.81%, 6/10/25 (b)

       800        778,012   

Venture XVIII CLO Ltd., Series 2014-18A, Class C, 3.35%, 10/15/26 (b)

       800        795,042   

Voya CLO Ltd., Class C (b):

      

Series 2014-3A, 3.88%, 7/25/26

       1,250        1,218,222   

Series 2014-4A, 4.28%, 10/14/26

       1,000        999,977   

 

Portfolio Abbreviations

 

ADS    American Depositary Shares      FKA    Formerly Known As    NZD    New Zealand Dollar
ARB    Airport Revenue Bonds      GBP    British Pound    OTC    Over-the-Counter
AUD    Australian Dollar      IDR    Indonesian Rupiah    PIK    Payment-In-Kind
BRL    Brazilian Real      JPY    Japanese Yen    PLN    Polish Zloty
BZDIOVER    Overnight Brazil CETIP Interbank Rate      KRW    South Korean Won    RB    Revenue Bonds
CAD    Canadian Dollar      LIBOR    London Interbank Offered Rate    REMIC    Real Estate Mortgage Investment Conduit
CLO    Collateralized Loan Obligation      MXIBTIIE    Mexico Interbank TIIE 28 Day    RUB    Russian Ruble
DIP    Debtor-In-Possession      MXN    Mexican Peso    TRY    Turkish Lira
EUR    Euro      MYR    Malaysian Ringgit    USD    U.S. Dollar
EURIBOR    Euro Interbank Offered Rate      NOK    Norwegian Krone    ZAR    South African Rand

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2015    11


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Asset-Backed Securities (a)   

Par  

(000)

    Value  

WhiteHorse IX Ltd., Series 2014-9A, Class C, 2.97%, 7/17/26 (b)

     USD        1,500      $ 1,426,671   
Total Asset-Backed Securities — 5.7%                      93,866,188   
      
                          
Corporate Bonds                      

Aerospace & Defense — 0.6%

      

Huntington Ingalls Industries, Inc.:

      

7.13%, 3/15/21

       2,000        2,145,000   

5.00%, 12/15/21 (b)

       536        554,090   

TransDigm, Inc.:

      

6.00%, 7/15/22

       4,585        4,613,656   

6.50%, 7/15/24

       2,140        2,171,779   
      

 

 

 
                       9,484,525   

Air Freight & Logistics — 0.1%

      

XPO Logistics, Inc., 7.88%, 9/01/19 (b)

             1,548        1,644,750   

Airlines — 1.1%

      

American Airlines Group, Inc., 4.63%, 3/01/20 (b)

       692        682,485   

Continental Airlines Pass-Through Trust:

      

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

       2,460        2,706,209   

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

       2,040        2,162,400   

Delta Air Lines Pass-Through Trust, Series 2002-1, Class G-1, 6.72%, 7/02/24

       3,200        3,711,744   

Turkish Airlines 2015-1 Class A Pass Through Trust, 4.20%, 9/15/28 (b)

       3,100        3,146,500   

United Airlines Pass-Through Trust, Series 2014-1, Class B, 4.75%, 10/11/23

       4,200        4,357,500   

Virgin Australia Trust, Series 2013-1, Class B, 6.00%, 4/23/22 (b)

       1,517        1,577,173   
      

 

 

 
                       18,344,011   

Auto Components — 1.6%

      

The Goodyear Tire & Rubber Co., 6.50%, 3/01/21

       1,600        1,692,800   

Icahn Enterprises LP/Icahn Enterprises Finance Corp.:

      

3.50%, 3/15/17

       265        266,325   

4.88%, 3/15/19

       3,950        4,024,655   

6.00%, 8/01/20

       3,108        3,267,907   

5.88%, 2/01/22

       3,816        3,944,409   

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

       2,470        2,525,575   

Schaeffler Holding Finance BV (b)(c):

      

6.25%, (6.25% Cash) 11/15/19

       1,112        1,184,280   

6.75%, (6.75% Cash) 11/15/22

       2,417        2,646,615   

TRW Automotive, Inc. (b):

      

4.50%, 3/01/21

       2,400        2,433,000   

4.45%, 12/01/23

       2,600        2,635,750   

ZF North America Capital, Inc. (b):

      

4.00%, 4/29/20

       545        548,406   

4.50%, 4/29/22

       291        290,454   

4.75%, 4/29/25

       868        870,170   
      

 

 

 
                       26,330,346   

Automobiles — 0.6%

      

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

       3,660        4,968,476   

General Motors Co.:

      

4.88%, 10/02/23

       1,875        2,030,662   

6.25%, 10/02/43

       940        1,121,905   

5.20%, 4/01/45

       1,530        1,618,833   
      

 

 

 
                       9,739,876   

Banks — 5.3%

      

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

       7,430        7,673,325   

CIT Group, Inc.:

      

4.25%, 8/15/17

       4,600        4,680,500   

5.25%, 3/15/18

       4,030        4,177,095   
Corporate Bonds   

Par  

(000)

    Value  

Banks (concluded)

      

CIT Group, Inc. (concluded):

      

6.63%, 4/01/18 (b)

     USD        335      359,288   

5.50%, 2/15/19 (b)

       5,147        5,385,049   

5.00%, 8/01/23

       660        674,438   

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

       2,900        3,322,370   

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

       3,775        3,872,312   

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

       12,000        13,701,660   

Discover Bank, 8.70%, 11/18/19

       748        916,005   

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

       5,000        4,760,000   

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

       5,150        6,077,000   

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

       6,110        6,144,803   

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

       10,080        11,040,070   

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

       3,750        3,773,962   

Wells Fargo & Co. (d):

      

3.45%, 2/13/23

       2,325        2,369,321   

4.13%, 8/15/23

       4,000        4,253,316   

5.61%, 1/15/44

       4,119        4,792,934   
      

 

 

 
                       87,973,448   

Building Products — 0.2%

      

Building Materials Corp. of America, 6.75%, 5/01/21 (b)

       2,700        2,868,750   

Masonite International Corp., 5.63%, 3/15/23 (b)

       610        637,450   
      

 

 

 
                       3,506,200   

Cable Television Services — 0.1%

      

SBA Communications Corp., 4.88%, 7/15/22 (b)

             1,445        1,428,744   

Capital Markets — 3.0%

      

E*Trade Financial Corp., 5.38%, 11/15/22

       1,348        1,432,250   

The Goldman Sachs Group, Inc. (d):

      

6.25%, 9/01/17

       625        690,476   

7.50%, 2/15/19

       5,165        6,128,613   

5.25%, 7/27/21

       1,175        1,329,622   

5.75%, 1/24/22

       5,500        6,382,799   

6.25%, 2/01/41

       15,000        18,934,335   

Morgan Stanley (d):

      

5.63%, 9/23/19

       6,770        7,666,240   

5.50%, 7/28/21

       2,695        3,106,144   

UBS AG, 5.88%, 7/15/16

       3,450        3,639,871   
      

 

 

 
                       49,310,350   

Chemicals — 1.8%

      

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

       1,745        1,797,350   

Axalta Coating Systems US Holdings, Inc./Axalta Coating Systems Dutch Holding BV, 7.38%, 5/01/21 (b)

       617        669,445   

Axiall Corp., 4.88%, 5/15/23

       367        370,670   

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

       6,000        8,170,782   

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

       2,615        2,869,962   

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

       2,500        2,726,993   

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

       632        653,330   

Eagle Spinco, Inc., 4.63%, 2/15/21

       2,370        2,399,625   

Huntsman International LLC:

      

4.88%, 11/15/20

       775        782,750   

8.63%, 3/15/21

       806        854,360   

5.13%, 11/15/22 (b)

       2,495        2,521,509   

NOVA Chemicals Corp. (b):

      

5.25%, 8/01/23

       2,277        2,396,543   

5.00%, 5/01/25

       905        953,644   

Platform Specialty Products Corp., 6.50%, 2/01/22 (b)

       1,693        1,769,185   
      

 

 

 
                       28,936,148   

Commercial Services & Supplies — 3.1%

      

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

       1,003        1,060,673   

 

See Notes to Financial Statements.

 

                
12    SEMI-ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Commercial Services & Supplies (concluded)

      

Aviation Capital Group Corp. (b):

      

7.13%, 10/15/20 (d)

     USD        31,000      $ 36,394,527   

6.75%, 4/06/21

       7,850        9,117,382   

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

       301        287,455   

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

       2,245        2,385,312   

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

       930        976,500   
      

 

 

 
                       50,221,849   

Communications Equipment — 0.2%

      

CommScope, Inc. (b):

      

5.00%, 6/15/21

       527        527,000   

5.50%, 6/15/24

       564        568,230   

Harris Corp., 5.05%, 4/27/45

       1,790        1,793,612   
      

 

 

 
                       2,888,842   

Construction & Engineering — 0.3%

      

AECOM Technology Corp. (b):

      

5.75%, 10/15/22

       333        344,655   

5.88%, 10/15/24

       2,311        2,393,942   

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

       413        421,301   

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

       673        681,413   

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

       825        792,000   
      

 

 

 
                       4,633,311   

Construction Materials — 0.7%

      

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

       1,907        2,007,118   

HD Supply, Inc.:

      

11.00%, 4/15/20

       2,740        3,109,900   

7.50%, 7/15/20

       2,905        3,115,612   

5.25%, 12/15/21 (b)

       3,278        3,400,925   
      

 

 

 
                       11,633,555   

Consumer Finance — 3.1%

      

Ally Financial, Inc.:

      

5.13%, 9/30/24

       855        887,062   

4.63%, 3/30/25

       235        234,266   

8.00%, 11/01/31

       5,665        7,109,575   

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

       11,610        11,672,195   

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

       8,069        8,479,147   

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

       3,252        3,340,090   

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

       2,550        2,575,559   

Navient Corp.:

      

3.88%, 9/10/15

       5,000        5,032,500   

6.25%, 1/25/16

       11,620        11,968,600   
      

 

 

 
                       51,298,994   

Containers & Packaging — 0.7%

      

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

       3,944        3,993,300   

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

       3,128        3,288,310   

Pactiv LLC, 7.95%, 12/15/25

       163        166,260   

Sealed Air Corp. (b):

      

6.50%, 12/01/20

       2,330        2,592,125   

8.38%, 9/15/21

       700        789,250   

5.13%, 12/01/24

       649        676,582   
      

 

 

 
                       11,505,827   

Diversified Consumer Services — 0.3%

      

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

             4,382        4,480,595   

Diversified Financial Services — 10.4%

      

Air Lease Corp., 3.75%, 2/01/22

       5,000        5,059,320   

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

       3,937        4,345,464   
Corporate Bonds   

Par  

(000)

    Value  

Diversified Financial Services (concluded)

      

Bank of America Corp. (d):

      

3.75%, 7/12/16

     USD        5,525      5,696,131   

5.00%, 5/13/21

       17,100        19,158,686   

5.70%, 1/24/22

       2,590        3,001,787   

4.00%, 4/01/24

       6,975        7,304,534   

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

       13,440        14,317,793   

Barclays PLC, 4.38%, 9/11/24

       2,100        2,097,075   

Citigroup, Inc. (d):

      

4.45%, 1/10/17

       4,800        5,045,688   

8.50%, 5/22/19

       464        574,101   

6.68%, 9/13/43

       4,125        5,292,693   

Deutsche Bank AG, 4.50%, 4/01/25

       3,985        3,901,960   

Ford Motor Credit Co. LLC:

      

8.00%, 12/15/16

       4,000        4,413,728   

5.88%, 8/02/21

       9,420        11,007,477   

General Motors Financial Co., Inc.:

      

6.75%, 6/01/18

       1,700        1,921,884   

4.38%, 9/25/21

       2,260        2,400,979   

4.25%, 5/15/23

       1,681        1,735,128   

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

       8,000        9,079,160   

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

       5,450        5,515,057   

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

       2,105        2,078,687   

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

       4,000        4,102,052   

Lloyds Banking Group PLC, 4.50%, 11/04/24

       6,875        7,048,243   

Moody’s Corp., 6.06%, 9/07/17

       20,000        20,881,640   

Mubadala GE Capital, Ltd., 3.00%, 11/10/19 (b)

       5,000        4,963,500   

Resparcs Funding LP I, 8.00% (e)(f)(g)

       4,000        1,746,800   

Reynolds Group Issuer, Inc.:

      

9.00%, 4/15/19

       370        387,575   

7.88%, 8/15/19

       2,480        2,610,200   

9.88%, 8/15/19

       147        156,647   

5.75%, 10/15/20

       3,142        3,283,390   

6.88%, 2/15/21

       105        110,316   

Royal Bank of Scotland Group PLC:

      

6.13%, 12/15/22

       425        471,499   

6.10%, 6/10/23

       2,500        2,746,417   

5.13%, 5/28/24

       5,250        5,422,426   

Societe Generale SA, 4.25%, 4/14/25 (b)

       2,600        2,502,685   
      

 

 

 
                       170,380,722   

Diversified Telecommunication Services — 5.6%

      

AT&T, Inc.:

      

6.30%, 1/15/38 (d)

       12,000        14,046,180   

4.30%, 12/15/42

       265        242,536   

4.35%, 6/15/45

       367        339,140   

CenturyLink, Inc.:

      

5.63%, 4/01/20

       1,375        1,448,549   

6.45%, 6/15/21

       285        306,375   

Frontier Communications Corp.:

      

6.25%, 9/15/21

       980        972,650   

7.63%, 4/15/24

       2,400        2,445,000   

Level 3 Financing, Inc.:

      

8.13%, 7/01/19

       11,171        11,740,721   

5.38%, 8/15/22

       2,250        2,297,812   

5.13%, 5/01/23 (b)

       1,653        1,648,868   

5.38%, 5/01/25 (b)

       1,985        1,982,519   

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

       6,550        6,809,557   

Verizon Communications, Inc. (d):

      

5.15%, 9/15/23

       8,775        9,903,930   

6.40%, 9/15/33

       9,475        11,532,506   

7.35%, 4/01/39

       7,825        10,519,703   

6.55%, 9/15/43

       13,225        16,547,318   
      

 

 

 
                       92,783,364   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2015    13


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Electric Utilities — 3.8%

      

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

     USD        9,900      $ 11,184,891   

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

       3,650        3,865,387   

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

       5,550        6,312,975   

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

       4,810        5,011,857   

Mirant Mid-Atlantic Pass-Through Trust:

      

Series B, 9.13%, 6/30/17

       1,039        1,103,780   

Series C, 10.06%, 12/30/28

       1,568        1,728,323   

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

       3,075        3,589,309   

Oncor Electric Delivery Co. LLC (d):

      

4.10%, 6/01/22

       4,150        4,516,366   

5.30%, 6/01/42

       2,750        3,336,418   

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

       12,000        15,864,744   

Puget Energy, Inc.:

      

6.00%, 9/01/21

       275        324,725   

5.63%, 7/15/22

       5,550        6,439,843   
      

 

 

 
                       63,278,618   

Electrical Equipment — 0.1%

      

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

             2,385        2,039,175   

Electronic Equipment, Instruments & Components — 0.4%

  

 

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

       2,600        3,009,500   

Nielsen Finance LLC/Nielsen Finance Co., 5.00%, 4/15/22 (b)

       475        477,612   

Sanmina Corp., 4.38%, 6/01/19 (b)

       1,415        1,422,075   

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

       1,605        1,412,400   
      

 

 

 
                       6,321,587   

Energy Equipment & Services — 0.9%

      

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

       10,200        11,108,575   

Ensco PLC, 4.50%, 10/01/24

       2,930        2,886,654   

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

       293        290,802   

Transocean, Inc., 6.00%, 3/15/18

       540        538,650   
      

 

 

 
                       14,824,681   

Food & Staples Retailing — 1.2%

      

Family Tree Escrow LLC (b):

      

5.25%, 3/01/20

       335        350,913   

5.75%, 3/01/23

       3,443        3,615,150   

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

       4,415        5,932,656   

Rite Aid Corp.:

      

6.75%, 6/15/21

       761        805,709   

6.13%, 4/01/23 (b)

       2,974        3,081,807   

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

       5,150        6,240,940   
      

 

 

 
                       20,027,175   

Food Products — 1.1%

      

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

       2,600        2,775,500   

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

       3,425        4,589,233   

Mondelez International, Inc.:

      

6.50%, 8/11/17

       4,450        4,967,424   

6.13%, 8/23/18

       4,840        5,535,445   

Smithfield Foods, Inc., 5.88%, 8/01/21 (b)

       715        750,750   
      

 

 

 
                       18,618,352   

Gas Utilities — 0.1%

      

Targa Resources Partners LP/Targa Resources Partners Finance Corp., 6.88%, 2/01/21

             1,265        1,328,250   

Health Care Equipment & Supplies — 0.5%

      

DJO Finco Inc./DJO Finance LLC/DJO Finance Corp., 8.13%, 6/15/21 (b)(i)

       1,865        1,892,975   

Medtronic, Inc., 4.63%, 3/15/45 (b)(d)

       4,565        4,917,071   

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

       1,660        1,720,175   
      

 

 

 
                       8,530,221   
Corporate Bonds   

Par  

(000)

    Value  

Health Care Providers & Services — 4.1%

      

Acadia Healthcare Co., Inc., 5.13%, 7/01/22

     USD        435      433,913   

Amsurg Corp., 5.63%, 7/15/22

       1,856        1,884,211   

Aviv Healthcare Properties LP/Aviv Healthcare Capital Corp., 7.75%, 2/15/19

       1,550        1,610,062   

CHS/Community Health Systems, Inc.:

      

5.13%, 8/15/18

       1,620        1,680,750   

6.88%, 2/01/22

       1,111        1,179,049   

DaVita HealthCare Partners, Inc.:

      

5.13%, 7/15/24

       1,990        2,025,074   

5.00%, 5/01/25

       1,871        1,867,492   

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

       4,549        4,844,685   

HCA, Inc.:

      

3.75%, 3/15/19

       4,364        4,494,920   

6.50%, 2/15/20

       10,421        11,879,940   

5.88%, 3/15/22

       340        380,375   

4.75%, 5/01/23

       676        709,800   

HealthSouth Corp.:

      

5.13%, 3/15/23

       512        527,360   

5.75%, 11/01/24

       889        937,895   

Omnicare, Inc.:

      

4.75%, 12/01/22

       289        315,733   

5.00%, 12/01/24

       183        199,470   

Tenet Healthcare Corp.:

      

6.25%, 11/01/18

       736        796,536   

4.75%, 6/01/20

       1,450        1,471,750   

6.00%, 10/01/20

       3,645        3,891,037   

4.50%, 4/01/21

       73        72,726   

4.38%, 10/01/21

       7,335        7,243,312   

8.13%, 4/01/22

       4,907        5,354,764   

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

       10,000        13,969,350   
      

 

 

 
                       67,770,204   

Health Care Technology — 0.4%

      

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

             6,500        7,028,066   

Hotels, Restaurants & Leisure — 0.8%

      

CDW LLC/CDW Finance Corp.:

      

6.00%, 8/15/22

       1,380        1,486,950   

5.00%, 9/01/23

       582        599,460   

5.50%, 12/01/24

       2,458        2,612,854   

MGM Resorts International, 6.00%, 3/15/23

       1,935        2,003,934   

New Red Finance, Inc., 6.00%, 4/01/22 (b)

       2,215        2,286,988   

Pinnacle Entertainment, Inc., 6.38%, 8/01/21

       1,586        1,685,125   

Sabre GLBL, Inc., 5.38%, 4/15/23 (b)

       594        605,880   

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

       1,718        1,773,835   
      

 

 

 
                       13,055,026   

Household Durables — 1.2%

      

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

       2,330        2,414,462   

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

       1,647        1,704,645   

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

       1,557        1,630,958   

KB Home, 7.25%, 6/15/18

       1,990        2,154,175   

Shea Homes LP / Shea Homes Funding Corp. (b):

      

5.88%, 4/01/23

       910        934,934   

6.13%, 4/01/25

       920        943,000   

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

       3,015        3,527,550   

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

       767        768,918   

Tri Pointe Holdings, Inc. (b):

      

4.38%, 6/15/19

       920        906,200   

5.88%, 6/15/24

       625        616,406   

United Rentals North America, Inc.:

      

7.38%, 5/15/20

       2,025        2,183,537   

7.63%, 4/15/22

       1,853        2,042,932   
      

 

 

 
                       19,827,717   

 

See Notes to Financial Statements.

 

                
14    SEMI-ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Household Products — 0.1%

      

Spectrum Brands, Inc.:

      

6.38%, 11/15/20

     USD        810      $ 858,600   

6.63%, 11/15/22

       1,110        1,187,700   
      

 

 

 
                       2,046,300   

Independent Power and Renewable Electricity Producers — 0.8%

  

 

Baytex Energy Corp., 5.13%, 6/01/21 (b)

       435        424,125   

Calpine Corp.:

      

6.00%, 1/15/22 (b)

       878        928,485   

5.38%, 1/15/23

       2,333        2,353,414   

5.88%, 1/15/24 (b)

       823        880,610   

5.50%, 2/01/24

       1,749        1,749,000   

5.75%, 1/15/25

       1,770        1,778,939   

Dynegy, Inc., 6.75%, 11/01/19 (b)

       2,195        2,293,775   

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

       1,130        1,226,050   

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

       1,927        1,951,087   
      

 

 

 
                       13,585,485   

Insurance — 5.3%

      

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

       1,204        1,240,120   

American International Group, Inc., 6.40%, 12/15/20 (d)

       8,710        10,451,225   

Aon Corp., 5.00%, 9/30/20 (d)

       7,700        8,624,593   

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

       6,500        6,253,611   

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

       3,400        3,965,593   

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

       10,425        11,605,986   

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

       1,455        1,545,937   

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

       12,000        15,342,504   

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

       2,825        3,532,725   

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

       10,000        13,008,100   

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

       10,085        11,713,818   
      

 

 

 
                       87,284,212   

Internet Software & Services — 0.1%

      

Netflix, Inc. (b):

      

5.50%, 2/15/22

       563        592,558   

5.88%, 2/15/25

       339        361,035   
      

 

 

 
                       953,593   

IT Services — 0.5%

      

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

       2,400        2,508,000   

First Data Corp. (b):

      

7.38%, 6/15/19

       2,905        3,017,569   

6.75%, 11/01/20

       1,768        1,882,920   

8.25%, 1/15/21

       250        265,077   
      

 

 

 
                       7,673,566   

Life Sciences Tools & Services — 0.8%

      

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

             12,000        13,806,468   

Media — 6.2%

      

21st Century Fox America, Inc., 6.15%, 3/01/37 (d)

       9,575        11,739,390   

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

       5,000        5,038,000   

Altice Financing SA, 6.63%, 2/15/23 (b)

       1,313        1,352,390   

Altice Finco SA, 7.63%, 2/15/25 (b)

       551        561,676   

Altice SA (b):

      

7.75%, 5/15/22

       3,245        3,277,482   

7.63%, 2/15/25

       1,515        1,532,120   

AMC Networks, Inc.:

      

7.75%, 7/15/21

       1,330        1,449,700   

4.75%, 12/15/22

       685        697,844   

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

       349        360,761   
Corporate Bonds   

Par  

(000)

    Value  

Media (concluded)

      

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

     USD        10,205      10,764,207   

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

       5,000        6,878,035   

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

       4,005        4,638,190   

DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., 5.00%, 3/01/21 (d)

       8,575        9,488,117   

DISH DBS Corp., 5.88%, 11/15/24

       2,462        2,425,070   

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

       713        757,563   

Grupo Televisa SAB, 5.00%, 5/13/45 (d)

       3,345        3,407,863   

Intelsat Jackson Holdings SA:

      

7.25%, 4/01/19

       710        735,738   

5.50%, 8/01/23

       2,909        2,738,096   

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

       6,025        6,173,691   

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

       463        493,095   

NAI Entertainment Holdings/NAI Entertainment Holdings Finance Corp., 5.00%, 8/01/18 (b)

       1,471        1,518,808   

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

       9,000        9,219,375   

Outfront Media Capital LLC / Outfront Media Capital Corp.:

      

5.25%, 2/15/22

       249        257,715   

5.63%, 2/15/24

       122        127,033   

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

       2,300        2,288,500   

Time Warner Cable, Inc.:

      

4.13%, 2/15/21

       1,136        1,133,186   

4.00%, 9/01/21

       575        572,031   

6.55%, 5/01/37

       3,519        3,643,928   

Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, 5.50%, 1/15/23 (b)

       1,000        1,046,250   

Univision Communications, Inc. (b):

      

5.13%, 5/15/23

       4,793        4,846,921   

5.13%, 2/15/25

       999        1,006,493   

Virgin Media Secured Finance PLC, 5.38%, 4/15/21 (b)

       1,255        1,312,625   
      

 

 

 
                       101,481,893   

Metals & Mining — 3.1%

      

Alcoa, Inc., 5.13%, 10/01/24

       2,451        2,641,989   

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

       5,000        4,819,235   

ArcelorMittal, 6.13%, 6/01/18

       2,575        2,748,813   

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

       2,194        2,089,785   

Constellium NV:

      

4.63%, 5/15/21

     EUR        490        530,114   

5.75%, 5/15/24 (b)

     USD        1,178        1,133,825   

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

       8,500        9,865,032   

Freeport-McMoRan, Inc. (d):

      

3.55%, 3/01/22

       4,700        4,410,757   

3.88%, 3/15/23

       8,900        8,373,645   

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

       3,285        3,506,737   

Peabody Energy Corp., 6.50%, 9/15/20

       1,020        632,400   

Southern Copper Corp., 5.88%, 4/23/45

       3,870        3,805,371   

Steel Dynamics, Inc.:

      

5.13%, 10/01/21 (b)

       1,105        1,129,863   

6.38%, 8/15/22

       1,430        1,533,675   

5.25%, 4/15/23

       163        166,668   

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

       2,785        3,014,762   
      

 

 

 
                       50,402,671   

Multi-Utilities — 1.3%

      

CenterPoint Energy, Inc. (d):

      

5.95%, 2/01/17

       9,000        9,727,110   

6.50%, 5/01/18

       9,675        10,970,057   
      

 

 

 
                       20,697,167   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2015    15


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Multiline Retail — 0.2%

      

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

     USD        3,460      $ 3,604,718   

Offshore Drilling & Other Services — 0.1%

      

Sensata Technologies BV (b):

      

5.63%, 11/01/24

       695        741,913   

5.00%, 10/01/25

       1,418        1,464,085   
      

 

 

 
                       2,205,998   

Oil, Gas & Consumable Fuels — 15.3%

      

Access Midstream Partners LP/ACMP Finance Corp.:

      

6.13%, 7/15/22

       1,668        1,793,100   

4.88%, 5/15/23

       343        347,998   

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

       75        83,341   

Antero Resources Finance Corp.:

      

6.00%, 12/01/20

       750        765,938   

5.38%, 11/01/21

       649        655,490   

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

       3,207        2,637,757   

Bonanza Creek Energy, Inc.:

      

6.75%, 4/15/21

       1,145        1,165,037   

5.75%, 2/01/23

       1,555        1,512,237   

California Resources Corp.:

      

5.50%, 9/15/21

       1,389        1,316,077   

6.00%, 11/15/24

       6,012        5,651,280   

Chesapeake Energy Corp.:

      

6.88%, 11/15/20

       493        506,558   

5.75%, 3/15/23

       1,151        1,125,102   

Cimarex Energy Co., 4.38%, 6/01/24

       527        533,588   

Concho Resources, Inc.:

      

5.50%, 10/01/22

       226        229,978   

5.50%, 4/01/23

       1,995        2,022,431   

CONSOL Energy, Inc., 5.88%, 4/15/22

       6,131        5,625,192   

Continental Resources, Inc.:

      

5.00%, 9/15/22

       11,232        11,400,480   

4.50%, 4/15/23

       469        472,169   

Denbury Resources, Inc., 5.50%, 5/01/22

       604        572,290   

El Paso LLC:

      

7.80%, 8/01/31

       197        236,298   

7.75%, 1/15/32

       4,586        5,472,813   

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

       2,345        2,929,958   

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

       5,075        5,866,294   

Enbridge Energy Partners LP, 9.88%, 3/01/19 (d)

       6,000        7,517,556   

Energy Transfer Equity LP:

      

7.50%, 10/15/20

       1,028        1,156,500   

5.88%, 1/15/24

       3,913        4,108,650   

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

       12,000        13,881,312   

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

       2,693        2,776,483   

Hilcorp Energy I LP/Hilcorp Finance Co., 5.00%, 12/01/24 (b)

       5,105        4,951,850   

Kinder Morgan Energy Partners LP:

      

6.85%, 2/15/20 (d)

       12,000        14,028,276   

4.25%, 9/01/24

       2,170        2,195,109   

5.40%, 9/01/44

       3,615        3,556,831   

Kinder Morgan, Inc.:

      

5.30%, 12/01/34

       1,310        1,300,374   

5.55%, 6/01/45

       2,560        2,555,894   

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

       231        247,170   

Linn Energy LLC/Linn Energy Finance Corp.:

      

6.25%, 11/01/19

       1,047        884,715   

8.63%, 4/15/20

       1,797        1,636,384   

7.75%, 2/01/21

       475        408,500   

Marathon Petroleum Corp., 3.50%, 3/01/16 (d)

       4,600        4,691,880   

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

       1,369        1,447,717   
Corporate Bonds   

Par  

(000)

    Value  

Oil, Gas & Consumable Fuels (concluded)

      

MEG Energy Corp. (b):

      

6.50%, 3/15/21

     USD        3,839      3,791,012   

7.00%, 3/31/24

       3,598        3,544,750   

Midcontinent Express Pipeline LLC, 6.70%, 9/15/19 (b)

       3,500        3,780,000   

Newfield Exploration Co., 5.38%, 1/01/26

       701        729,040   

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

       4,615        5,661,973   

NGPL PipeCo LLC, 9.63%, 6/01/19 (b)

       902        929,060   

Oasis Petroleum, Inc.:

      

7.25%, 2/01/19

       915        933,758   

6.50%, 11/01/21

       1,025        1,030,125   

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

       10,000        11,983,240   

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

       613        519,518   

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

       1,225        1,304,625   

Peabody Energy Corp.:

      

6.00%, 11/15/18

       2,527        1,991,592   

6.25%, 11/15/21 (d)

       1,483        889,800   

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

       2,221        2,434,771   

Petrobras International Finance Co. SA:

      

3.88%, 1/27/16

       12,550        12,570,331   

5.38%, 1/27/21

       3,385        3,248,923   

Petroleos Mexicanos (d):

      

3.50%, 1/30/23

       5,000        4,831,250   

4.88%, 1/18/24

       2,000        2,109,600   

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

  

    3,980        3,711,350   

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

       1,665        1,885,160   

Range Resources Corp.:

      

5.00%, 8/15/22

       32        32,480   

5.00%, 3/15/23

       75        76,125   

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

       4,351        4,470,652   

RHP Hotel Properties LP / RHP Finance Corp., 5.00%, 4/15/23 (b)

       607        614,588   

Rockies Express Pipeline LLC, 6.88%, 4/15/40 (b)

       580        632,200   

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

       3,448        3,452,310   

RSP Permian, Inc., 6.63%, 10/01/22 (b)

       789        818,982   

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

       10,000        10,840,740   

Sabine Pass Liquefaction LLC:

      

5.63%, 4/15/23

       7,393        7,466,930   

5.75%, 5/15/24

       2,869        2,897,690   

Sabine Pass LNG LP, 7.50%, 11/30/16

       5,965        6,360,181   

Sanchez Energy Corp., Series WI, 6.13%, 1/15/23

       1,141        1,118,180   

SandRidge Energy, Inc.:

      

8.75%, 1/15/20

       114        84,645   

7.50%, 2/15/23

       1,291        852,060   

Seventy Seven Energy, Inc., 6.50%, 7/15/22

       469        268,503   

SM Energy Co., 6.50%, 1/01/23

       322        338,100   

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

       1,614        1,678,560   

Tesoro Logistics LP/Tesoro Logistics Finance Corp., 6.25%, 10/15/22 (b)

       1,519        1,612,039   

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

       293        275,420   

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

       5,125        5,703,556   

Whiting Petroleum Corp.:

      

5.00%, 3/15/19

       3,019        3,011,452   

5.75%, 3/15/21

       1,171        1,187,839   

The Williams Cos., Inc.:

      

3.70%, 1/15/23

       5,000        4,727,725   

4.55%, 6/24/24

       830        815,906   

8.75%, 3/15/32

       2,478        3,014,589   

5.75%, 6/24/44

       685        644,431   

WPX Energy, Inc., 5.25%, 9/15/24

       856        789,660   
      

 

 

 
                       251,932,028   

 

See Notes to Financial Statements.

 

                
16    SEMI-ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Paper & Forest Products — 2.0%

      

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

     USD        532      $ 524,020   

International Paper Co. (d):

      

7.50%, 8/15/21

       9,675        12,115,606   

8.70%, 6/15/38

       4,000        5,736,960   

7.30%, 11/15/39

       10,000        12,990,660   

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

       2,130        2,268,450   
      

 

 

 
                       33,635,696   

Pharmaceuticals — 3.6%

      

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

       5,675        5,610,464   

Actavis Funding SCS:

      

3.45%, 3/15/22

       4,610        4,684,092   

3.85%, 6/15/24

       6,000        6,108,000   

3.80%, 3/15/25

       1,650        1,667,780   

4.75%, 3/15/45

       1,450        1,465,862   

Endo Finance LLC/Endo Finco, Inc. (b):

      

7.00%, 12/15/20

       241        253,653   

7.25%, 1/15/22

       499        527,693   

6.00%, 2/01/25

       1,601        1,642,026   

Forest Laboratories, Inc. (b):

      

4.38%, 2/01/19

       2,924        3,122,466   

5.00%, 12/15/21

       1,631        1,803,023   

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

       1,613        1,649,292   

Mallinckrodt International Finance SA, 5.75%, 8/01/22 (b)

       2,130        2,204,550   

Mallinckrodt International Finance SA / Mallinckrodt CB LLC (b):

      

4.88%, 4/15/20

       517        525,401   

5.50%, 4/15/25

       447        455,940   

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

       6,420        8,640,993   

Valeant Pharmaceuticals International (b):

      

6.75%, 8/15/18

       6,955        7,363,606   

5.38%, 3/15/20

       1,391        1,426,644   

6.38%, 10/15/20

       2,355        2,481,581   

5.63%, 12/01/21

       1,615        1,655,375   

5.50%, 3/01/23

       979        991,238   

5.88%, 5/15/23

       3,205        3,289,131   

6.13%, 4/15/25

       1,622        1,673,701   
      

 

 

 
                       59,242,511   

Professional Services — 0.5%

      

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

       2,048        2,158,080   

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

       5,750        5,898,954   
      

 

 

 
                       8,057,034   

Real Estate Investment Trusts (REITs) — 2.7%

      

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

       10,000        11,620,380   

DDR Corp.:

      

4.75%, 4/15/18

       2,140        2,298,621   

7.88%, 9/01/20

       2,650        3,283,186   

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

       10,000        10,914,180   

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

       999        1,038,960   

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

       3,450        3,879,891   

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

       3,600        3,613,727   

iStar Financial, Inc.:

      

4.00%, 11/01/17

       825        813,986   

5.00%, 7/01/19

       580        577,825   

UDR, Inc., 4.25%, 6/01/18 (d)

       5,225        5,589,078   
      

 

 

 
                       43,629,834   

Real Estate Management & Development — 0.6%

  

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

       1,805        1,825,306   

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

       4,485        4,143,813   

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

       2,085        2,220,525   
Corporate Bonds   

Par  

(000)

    Value  

Real Estate Management & Development (concluded)

  

Realogy Group LLC / Realogy Co-Issuer Corp. (b):

      

4.50%, 4/15/19

     USD        803      816,731   

5.25%, 12/01/21

       344        351,740   
      

 

 

 
                       9,358,115   

Road & Rail — 1.5%

  

The Hertz Corp.:

      

4.25%, 4/01/18

       983        997,745   

6.75%, 4/15/19

       1,167        1,207,600   

5.88%, 10/15/20

       925        941,188   

7.38%, 1/15/21

       310        326,275   

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

       17,200        21,219,141   
      

 

 

 
                       24,691,949   

Semiconductors & Semiconductor Equipment — 0.4%

  

Micron Technology, Inc. (b):

      

5.25%, 1/15/24

       1,190        1,178,100   

5.50%, 2/01/25

       3,590        3,572,050   

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

       1,655        1,758,437   
      

 

 

 
                       6,508,587   

Software — 0.5%

  

Infor US, Inc., 6.50%, 5/15/22 (b)

       2,425        2,491,688   

MSCI, Inc., 5.25%, 11/15/24 (b)

       587        610,480   

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

       4,435        4,479,350   
      

 

 

 
                       7,581,518   

Specialty Retail — 1.1%

  

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

       6,125        6,879,122   

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

       3,050        3,522,750   

Penske Automotive Group, Inc., 5.38%, 12/01/24

       2,750        2,860,000   

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

       5,000        5,570,450   
      

 

 

 
                       18,832,322   

Textiles Apparel & Shoes — 0.1%

  

Springs Industries, Inc., 6.25%, 6/01/21

             1,674        1,655,168   

Textiles, Apparel & Luxury Goods — 0.1%

  

Levi Strauss & Co., 5.00%, 5/01/25 (b)

       699        698,563   

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

       1,406        1,458,725   
      

 

 

 
                       2,157,288   

Thrifts & Mortgage Finance — 0.1%

  

Radian Group, Inc., 5.50%, 6/01/19

             1,378        1,446,900   

Tobacco — 2.1%

  

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

       13,392        23,257,766   

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

       8,375        8,600,204   

Reynolds American, Inc.:

      

3.25%, 11/01/22

       970        959,445   

4.85%, 9/15/23

       1,120        1,230,795   
      

 

 

 
                       34,048,210   

Trading Companies & Distributors — 0.4%

  

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

      

Class A, 5.25%, 5/30/25

       2,739        2,910,280   

Class B, 6.13%, 11/30/21

       3,419        3,649,262   
      

 

 

 
                       6,559,542   

Transportation Infrastructure — 0.9%

  

CEVA Group PLC (b):

      

4.00%, 5/01/18

       3,310        3,028,650   

7.00%, 3/01/21

       1,067        1,053,662   

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

       10,500        11,288,046   
      

 

 

 
                       15,370,358   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    APRIL 30, 2015    17


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Corporate Bonds   

Par  

(000)

    Value  

Wireless Telecommunication Services — 5.4%

  

America Movil SAB de CV:

      

2.38%, 9/08/16

     USD        12,495      $ 12,694,045   

3.13%, 7/16/22 (d)

       1,275        1,291,652   

American Tower Corp.:

      

4.50%, 1/15/18

       6,500        6,955,208   

5.05%, 9/01/20

       500        551,537   

5.90%, 11/01/21 (d)

       3,770        4,310,501   

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

       1,380        1,456,728   

Crown Castle Towers LLC (b):

      

5.50%, 1/15/37

       4,000        4,183,868   

4.17%, 8/15/37

       3,000        3,120,552   

6.11%, 1/15/40

       4,555        5,189,088   

Digicel Group Ltd. (b):

      

8.25%, 9/30/20

       2,615        2,697,111   

7.13%, 4/01/22

       825        781,172   

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

       1,285        1,247,362   

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

       13,975        14,534,196   

Sprint Communications, Inc. (b):

      

9.00%, 11/15/18

       5,290        6,019,015   

7.00%, 3/01/20

       9,302        10,290,337   

Sprint Corp.:

      

7.88%, 9/15/23

       2,715        2,725,181   

7.13%, 6/15/24

       1,755        1,686,994   

T-Mobile USA, Inc.:

      

6.63%, 4/28/21

       2,680        2,827,400   

6.73%, 4/28/22

       2,495        2,629,106   

6.00%, 3/01/23

       580        591,049   

6.84%, 4/28/23

       1,405        1,485,787   

6.38%, 3/01/25

       1,845        1,894,797   
      

 

 

 
                       89,162,686   
Total Corporate Bonds — 109.2%                      1,796,786,346   
      
                          
Foreign Agency Obligations                      

Brazilian Government International Bond, 5.00%, 1/27/45

       5,000        4,687,500   

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

       4,400        5,054,500   

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

             2,300        2,361,525   
Total Foreign Agency Obligations — 0.7%                      12,103,525   
      
                          
Municipal Bonds                      

City of Chicago Illinois, Refunding ARB, O’Hare International Airport, General 3rd Lien, Build America Bonds, Series B, 6.85%, 1/01/38

       5,000        5,665,200   

Metropolitan Transportation Authority (NY), RB, Build America Bonds, Series B-1, 6.55%, 11/15/31

             10,000        13,233,300   
Total Municipal Bonds — 1.1%                      18,898,500   
      
                          
U.S. Government Sponsored Agency Securities                

Agency Obligations — 0.2%