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 811-21318
Name of Fund: BlackRock Corporate High Yield Fund VI, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock Corporate High Yield Fund VI, Inc., 800 Scudders Mill
Road, Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton,
NJ 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 08/31/06
Date of reporting period: 09/01/05 - 08/31/06
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES
FIXED INCOME LIQUIDITY REAL ESTATE
BlackRock Corportate High Yield Fund VI, Inc. BLACKROCK
ANNUAL REPORT | AUGUST 31, 2006
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock Corporate High Yield Fund VI, Inc.
The Benefits and Risks of Leveraging
BlackRock Corporate High Yield Fund VI, Inc. utilizes leveraging through
borrowings or issuance of short-term debt securities or shares of Preferred
Stock. The concept of leveraging is based on the premise that the cost of assets
to be obtained from leverage will be based on short-term interest rates, which
normally will be lower than the yield earned by the Fund on its longer-term
portfolio investments. Since the total assets of the Fund (including the assets
obtained from leverage) are invested in higher-yielding portfolio investments,
the Fund's Common Stock shareholders are the beneficiaries of the incremental
yield.
Leverage creates risks for holders of Common Stock including the likelihood of
greater net asset value and market price volatility. In addition, there is the
risk that fluctuations in interest rates on borrowings (or in the dividend rates
on any Preferred Stock, if the Fund were to issue Preferred Stock) may reduce
the Common Stock's yield and negatively impact its net asset value and market
price. If the income derived from securities purchased with assets received from
leverage exceeds the cost of leverage, the Fund's net income will be greater
than if leverage had not been used. Conversely, if the income from the
securities purchased is not sufficient to cover the cost of leverage, the Fund's
net income will be less than if leverage had not been used, and therefore the
amount available for distribution to Common Stock shareholders will be reduced.
2 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
A Letter to Shareholders
Dear Shareholder
It is my pleasure to welcome you to BlackRock.
On September 29, 2006, BlackRock, Inc. ("BlackRock") and Merrill Lynch
Investment Managers, L.P. ("MLIM") united to form one of the largest asset
management firms in the world. Now with more than $1 trillion in assets under
management, over 4,000 employees in 18 countries and representation in key
markets worldwide, BlackRock's global presence means greater depth and scale to
serve you.
The new BlackRock unites some of the finest money managers in the industry. Our
ranks include more than 500 investment professionals globally -- portfolio
managers, research analysts, risk management professionals and traders. With
offices strategically located around the world, our investment professionals
have in-depth local knowledge and the ability to leverage our global presence
and robust infrastructure to deliver focused investment solutions. BlackRock's
professional investors are supported by disciplined investment processes and
best-in-class technology, ensuring that our portfolio managers are well equipped
to research, uncover and capitalize on the opportunities the world's markets
have to offer.
The BlackRock culture emphasizes excellence, teamwork and integrity in the
management of a variety of equity, fixed income, cash management, alternative
investment and real estate products. Our firm's core philosophy is grounded in
the belief that experienced investment and risk professionals using disciplined
investment processes and sophisticated analytical tools can consistently add
value to client portfolios.
As you probably are aware, former MLIM investment products now carry the
"BlackRock" name. This is reflected in newspapers and online fund reporting
resources. Your account statements will reflect the BlackRock name beginning
with the October month-end reporting period. Unless otherwise communicated to
you, your funds maintain the same investment objectives that they did prior to
the combination of MLIM and BlackRock. Importantly, this union does not affect
your brokerage account or your relationship with your financial advisor. Clients
of Merrill Lynch remain clients of Merrill Lynch.
We view this combination of asset management leaders as a complementary union
that reinforces our commitment to shareholders. Individually, each firm made
investment performance its single most important mission. Together, we are even
better prepared to capitalize on market opportunities on behalf of our
shareholders. Our focus on investment excellence is accompanied by an unwavering
commitment to service, enabling us to assist clients, in cooperation with their
financial professionals, in working toward their investment goals. We thank you
for allowing us the opportunity, and we look forward to serving your investment
needs in the months and years ahead as the new BlackRock.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
Vice Chairman
BlackRock, Inc.
Data, including assets under management, are as of June 30, 2006.
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 3
A Discussion With Your Fund's Portfolio Manager
The Fund outperformed its benchmark and comparable Lipper category average
for the fiscal year, benefiting from the strong performance of select holdings,
particularly in the first half of the period.
How did the Fund perform during the fiscal year in light of the existing market
conditions?
For the 12-month period ended August 31, 2006, the Common Stock of BlackRock
Corporate High Yield Fund VI, Inc. had net annualized yields of 8.14% and 9.21%,
based on a year-end per share net asset value of $14.12 and a per share market
price of $12.48, respectively, and $1.150 per share income dividends. For the
same period, the total investment return on the Fund's Common Stock was +6.29%,
based on a change in per share net asset value from $15.08 to $14.12, and
assuming reinvestment of all distributions. By comparison, the high yield bond
market, as measured by the Credit Suisse High Yield Index, returned +5.41%,
while the Fund's comparable Lipper category of High Current Yield Funds
(Leveraged) had an average return of +5.44% for the 12-month period. (Funds in
this Lipper category aim for relatively high current yield from investment in
fixed income securities, have no quality or maturity restrictions and tend to
invest in lower-grade debt issues.)
For the six-month period ended August 31, 2006, the total investment return on
the Fund's Common Stock was +2.69%, based on a change in per share net asset
value from $14.36 to $14.12, and assuming reinvestment of all distributions. For
the same period, the benchmark returned +3.45%, while the Lipper category posted
an average return of +2.88%.
For a description of the Fund's total investment return based on a change in the
per share market value of the Fund's Common Stock (as measured by the trading
price of the Fund's shares on the New York Stock Exchange), and assuming
reinvestment of dividends, please refer to the Financial Highlights section of
this report. As a closed-end fund, the Fund's shares may trade in the secondary
market at a premium or a discount to the Fund's net asset value. As a result,
total investment returns based on changes in the market value of the Fund's
Common Stock can vary significantly from total investment returns based on
changes in the Fund's net asset value.
High yield securities posted modest gains during the past 12 months, despite a
decline in the market in June 2006. The extent of the decline was not as intense
as that experienced by other markets in the middle of the calendar year. The
correction was widespread, with equities and emerging markets securities
declining markedly in May. However, the high yield market found support in
benign default rates and lower sensitivity to rising interest rates and,
therefore, experienced less volatility than other equity and fixed income asset
classes.
What factors most influenced Fund performance?
The majority of the Fund's outperformance occurred in the first six months of
the fiscal year. The market was strengthening during this time, and the
performance of many of our more speculative holdings improved. Companies such as
HealthSouth Corp. and propane distributor Star Gas Partners, L.P. resolved
financial issues, showed solid earnings recovery and generated positive returns.
The same was true of Cypress Semiconductor Corp., ADC Telecommunications, Inc.
and several other companies in which we held convertible securities. Fund
performance also benefited from our airlines positions in the first half, as the
industry began to resolve over-capacity problems and instituted price hikes to
counteract rising fuel costs.
In the latter half of the fiscal year, positive contributors to Fund results
included Select Medical Corp., an outpatient medical services provider; Reliant
Energy, Inc., an independent power producer; and Indalex Holding Corp., a metals
manufacturer. Each of these companies reported better- than-expected earnings
several times during the year.
While the Fund outperformed its benchmark and its Lipper category average for
the full fiscal period, it modestly underperformed both in the second half of
the year. This is attributed primarily to the reduced risk profile of the
portfolio. As measured by the Credit Suisse High Yield Index, returns of the CCC
rating category and of distressed and defaulted bonds were more than 6% higher
than those of better- quality securities during the six months ended August 31,
2006. In addition, higher-risk sectors such as airlines, alternative
telecommunications providers and autos/auto parts performed quite well during
this time. The Fund had a more conservative mix of investments within these
higher-risk sectors.
4 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
What changes were made to the portfolio during the period?
In anticipation of gradually slowing economic growth and a moderate increase in
the default rates on high yield bonds, we reduced the portfolio's risk profile
during the year. We trimmed the Fund's position in lower-rated CCC bonds and
increased the weighting in higher-quality BB-rated issues. We also reduced the
portfolio's exposure to cyclical sectors such as chemicals, manufacturing and
paper.
Also during the year, we reduced the Fund's position in convertible securities
while increasing exposure to floating rate securities. Our position in
convertible securities (corporate bonds that pay interest and also can be
converted to shares of company stock at a specific price) was trimmed from 8.5%
of net assets a year ago to less than 3% at period-end. Our holdings in floating
rate securities, including bank loans, increased from 11.6% of net assets a year
ago to nearly 15% at August 31, 2006.
The Fund's leverage position averaged 28.4% during the past six months. That is,
the Fund borrowed the equivalent of 28.4% of total assets invested, earning
incremental yield on the investments we made with the borrowed funds. As of
August 31, 2006, the Fund was 30.3% leveraged after borrowing $216.2 million at
a cost of 5.35%. For the year ended August 31, 2006, the average borrowing
amount was approximately $184.1 million, and the weighted average annual
interest rate was 4.89%. While leveraging will hinder the Fund's total return in
a weak market, the converse also is true. (For a more complete discussion of the
benefits and risks of leveraging, see page 2 of this report to shareholders.)
The Federal Reserve Board raised the target federal funds rate from 3.50% to
5.25% in seven increments of 25 basis points (.25%) during the 12-month period.
Rising interest rates resulted in higher borrowing costs for the Fund. The
increasing cost of leverage had an adverse effect on the Fund's earnings during
the period. As mentioned previously, we also upgraded the portfolio's credit
quality in anticipation of a gradual increase in default rates in 2006 and 2007.
While this has decreased the Fund's earnings in the short term, we believe these
changes should result in a higher net asset value in the medium term.
How would you characterize the Fund's position at the close of the period?
Both the Fund and the Credit Suisse High Yield Index had an average credit
rating of B at the end of the period. Relative to its benchmark, the portfolio
had an underweight exposure to securities rated CCC and below, the lowest rating
categories. The Fund's largest industry exposures at period-end were in
defensive sectors, primarily health care, gaming, U.S. cable and utility. This
reflects our risk-reduction efforts and, we believe, positions the Fund well for
a slowdown in economic growth and gradual rise in default rates.
Elizabeth M. Phillips
Vice President and Portfolio Manager
September 18, 2006
--------------------------------------------------------------------------------
Effective October 2, 2006, Portfolio Managers Scott Amero and Jeff Gary assumed
responsibility for the day-to-day management of the Fund's portfolio. Mr. Amero
joined BlackRock in 1990 and is a Managing Director and co-head of BlackRock's
fixed income portfolio management team. Prior to joining BlackRock, he was a
Vice President in Fixed Income Research at The First Boston Corporation. Mr.
Gary joined BlackRock in 2003 and is a Managing Director and portfolio manager.
Prior to joining BlackRock, Mr. Gary had most recently been a Managing Director
and portfolio manager with AIG (American General) Investment Group for several
years.
--------------------------------------------------------------------------------
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 5
Portfolio Information
Percent of
As of August 31, 2006 Total Assets
====================================================================================================================================
Ten Largest Holdings
------------------------------------------------------------------------------------------------------------------------------------
Building Materials Corp. of America* Building Materials is a manufacturer of residential roofing products, with
Timberline as its major brand. 1.6%
------------------------------------------------------------------------------------------------------------------------------------
L-3 Communications Corp.* The company is a supplier of secure communications systems, avionics,
telemetry, instrumentation and other communications and support services.
Customers include aerospace contractors and the United States military and
federal agencies. 1.3
------------------------------------------------------------------------------------------------------------------------------------
Qwest* Qwest provides a broad range of telecommunications services, including
broadband Internet-based data, voice and image communication, local
exchange services, and data and long-distance services to residential and
business customers. The company also provides Web hosting, high-speed
Internet access and private networks. 1.3
------------------------------------------------------------------------------------------------------------------------------------
SunGard Data Systems, Inc.* SunGard is a top financial software firm, brought private by a group of
seven financial investors. The company provides information technology and
electronic processing for financial services companies worldwide. It also
offers a high availability infrastructure for business continuity. 1.2
------------------------------------------------------------------------------------------------------------------------------------
Sierra Pacific Resources* Sierra Pacific Resources is the holding company for two utilities, Nevada
Power Company and Sierra Pacific Power Company. Both utilities primarily
serve the State of Nevada. 1.2
------------------------------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp. Cablevision Systems New York Group provides telecommunications and
entertainment services. The company has operations in multimedia delivery,
subscription cable television services, championship professional sports
teams and national television program networks. Cablevision serves cable
customers primarily in the New York metropolitan area. 1.2
------------------------------------------------------------------------------------------------------------------------------------
Adelphia Communications Corp.* Adelphia is a cable television operator, with systems in suburban areas of
large- and medium-sized cities in the United States. Our holdings are
primarily in loans to Adelphia's Century Cable subsidiary that have
continued to pay interest through the bankruptcy proceedings. 1.2
------------------------------------------------------------------------------------------------------------------------------------
Intelsat* Intelsat owns and operates a global communications satellite system that
offers satellite service for voice, data, video and Internet
communications to over 200 countries and territories. 1.1
------------------------------------------------------------------------------------------------------------------------------------
FelCor Lodging LP* FelCor is a real estate investment trust holding upscale and full-service
hotels, primarily in Texas, California and Florida. The company's brands
include Embassy Suites, Crowne Plaza, Holiday Inn and Doubletree, as well
as Sheraton and Westin. 1.1
------------------------------------------------------------------------------------------------------------------------------------
Rogers Wireless Communications, Inc.* A subsidiary of Canadian communications and media company, Rogers
Communications, Rogers Wireless provides wireless communications services
throughout Canada. The company has digital personal communications
service, cellular, paging, interactive messaging and wireless data
services. 1.0
------------------------------------------------------------------------------------------------------------------------------------
* Includes combined holdings or affiliates.
Portfolio Profile
--------------------------------------------------------------------------------
Quality Ratings by Percent of
S&P/Moody's Total Investments
--------------------------------------------------------------------------------
BBB/Baa ................................................... 2.0%
BB/Ba ..................................................... 22.0
B/B ....................................................... 64.0
CCC/Caa ................................................... 9.1
NR (Not Rated) ............................................ 1.8
Other* .................................................... 1.1
--------------------------------------------------------------------------------
* Includes investments in common stocks, preferred stocks, capital trusts,
warrants and short-term securities.
--------------------------------------------------------------------------------
Percent of
Five Largest Foreign Countries* Total Investments
--------------------------------------------------------------------------------
Canada .................................................... 6.9%
Bermuda ................................................... 1.1
Ireland ................................................... 1.1
Brazil .................................................... 0.9
United Kingdom ............................................ 0.7
--------------------------------------------------------------------------------
* All holdings are denominated in U.S. dollars
--------------------------------------------------------------------------------
Percent of
Five Largest Industries Total Investments
--------------------------------------------------------------------------------
Health Care ............................................... 8.6%
Gaming .................................................... 7.5
Cable -- U.S. ............................................. 7.2
Utility ................................................... 7.1
Paper ..................................................... 5.7
--------------------------------------------------------------------------------
For Fund compliance purposes, the Fund's industry classifications refer to
any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report which may combine industry sub-classifications for reporting
ease. These industry classifications are unaudited.
--------------------------------------------------------------------------------
Average Portfolio Maturity 6.8 years
--------------------------------------------------------------------------------
6 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Schedule of Investments (in U.S. dollars)
Face
Amount Corporate Bonds Value
===============================================================================
Aerospace & Defense--4.7%
Alliant Techsystems, Inc.:
$ 950,000 6.75% due 4/01/2016 $ 923,875
3,150,000 3% due 8/15/2024 (a)(h) 3,697,313
2,325,000 DRS Technologies, Inc., 6.875% due 11/01/2013 2,255,250
1,600,000 Esterline Technologies Corp., 7.75%
due 6/15/2013 1,600,000
L-3 Communications Corp.:
2,200,000 7.625% due 6/15/2012 2,255,000
2,550,000 5.875% due 1/15/2015 2,409,750
2,200,000 6.375% due 10/15/2015 2,117,500
2,220,000 3% due 8/01/2035 (a)(h) 2,233,875
2,875,000 Standard Aero Holdings, Inc., 8.25%
due 9/01/2014 2,767,188
3,200,000 Vought Aircraft Industries, Inc., 8%
due 7/15/2011 2,880,000
-------------
23,139,751
===============================================================================
Airlines--1.6%
3,650,000 American Airlines, Inc. Class C, 7.80%
due 4/01/2008 3,650,000
Continental Airlines, Inc.:
3,286,269 Series 1997-4-B, 6.90% due 7/02/2018 3,113,835
51,961 Series 1998-1-C, 6.541% due 9/15/2009 49,677
901,265 Series 2001-1 Class C, 7.033%
due 12/15/2012 892,693
-------------
7,706,205
===============================================================================
Automotive--2.6%
AutoNation, Inc. (a):
4,575,000 7.507% due 4/15/2013 (c) 4,597,875
2,400,000 7% due 4/15/2014 2,367,000
4,725,000 Ford Motor Credit Co., 9.875% due 8/05/2011 4,936,689
950,000 General Motors Acceptance Corp., 7.25%
due 3/02/2011 947,831
-------------
12,849,395
===============================================================================
Broadcasting--4.7%
2,800,000 Allbritton Communications Co., 7.75%
due 12/15/2012 2,768,500
2,550,000 Barrington Broadcasting Group LLC, 10.50%
due 8/15/2014 (a) 2,499,000
3,175,000 CMP Susquehanna Corp., 9.875%
due 5/15/2014 (a) 2,960,688
4,750,000 Paxson Communications Corp., 8.757%
due 1/15/2012 (a)(c) 4,785,625
4,075,000 Salem Communications Corp., 7.75%
due 12/15/2010 4,059,719
2,550,000 Sinclair Broadcast Group, Inc., 8% due 3/15/2012 2,581,875
2,250,000 Sirius Satellite Radio, Inc., 9.625% due
8/01/2013 2,137,500
1,875,000 XM Satellite Radio, Inc., 9.75% due 5/01/2014
(a) 1,762,500
-------------
23,555,407
===============================================================================
Cable--U.S.--7.5%
1,300,000 Adelphia Communications Corp., 6%
due 2/15/2006 (h)(j)(l) 6,500
3,075,000 CCH I LLC, 11% due 10/01/2015 2,729,062
3,750,000 CSC Holdings, Inc. Series B, 7.625%
due 4/01/2011 3,834,375
4,125,000 Cablevision Systems Corp. Series B, 8%
due 4/15/2012 4,145,625
3,500,000 Charter Communications Holdings II LLC, 10.25%
due 9/15/2010 3,543,750
Intelsat Subsidiary Holding Co. Ltd.:
4,200,000 10.484% due 1/15/2012 (c) 4,263,000
3,475,000 8.625% due 1/15/2015 3,509,750
1,019,000 Loral Spacecom Corp., 14% due 11/15/2015 (f) 1,154,017
3,900,000 Mediacom LLC, 9.50% due 1/15/2013 4,007,250
3,459,000 PanAmSat Corp., 9% due 8/15/2014 3,519,532
3,150,000 Quebecor Media, Inc., 7.75% due 3/15/2016 3,118,500
3,100,000 Rainbow National Services LLC, 10.375%
due 9/01/2014 (a) 3,452,625
-------------
37,283,986
===============================================================================
Chemicals--6.1%
2,459,000 BCP Caylux Holdings Luxembourg SCA, 9.625%
due 6/15/2014 2,664,941
2,405,000 Huntsman International, LLC, 10.125%
due 7/01/2009 2,453,100
1,275,000 Innophos, Inc., 8.875% due 8/15/2014 1,275,000
6,675,000 Millennium America, Inc., 9.25% due 6/15/2008 6,825,187
Nalco Co.:
1,900,000 7.75% due 11/15/2011 1,933,250
1,900,000 8.875% due 11/15/2013 1,957,000
1,168,000 Nalco Finance Holdings, Inc., 10.078%
due 1/15/2014 (b) 890,600
4,775,000 Nova Chemicals Corp., 8.405%
due 11/15/2013 (c) 4,876,469
3,750,000 Omnova Solutions, Inc., 11.25% due 6/01/2010 3,975,000
2,550,000 Reichhold Industries, Inc., 9% due 8/15/2014 (a) 2,499,000
1,025,000 Unifi, Inc., 11.50% due 5/15/2014 (a) 973,750
-------------
30,323,297
===============================================================================
Consumer--Durables--0.9%
2,125,000 Sealy Mattress Co., 8.25% due 6/15/2014 2,146,250
2,200,000 Simmons Bedding Co., 7.875% due 1/15/2014 2,123,000
-------------
4,269,250
===============================================================================
Consumer--Non-Durables--6.5%
6,775,000 American Greetings Corp., 7.375%
due 6/01/2016 6,817,344
3,825,000 Chattem, Inc., 7% due 3/01/2014 3,652,875
4,825,000 Church & Dwight Co., Inc., 6% due 12/15/2012 4,535,500
5,725,000 Hines Nurseries, Inc., 10.25% due 10/01/2011 5,095,250
Levi Strauss & Co.:
2,525,000 10.258% due 4/01/2012 (c) 2,607,062
3,200,000 8.875% due 4/01/2016 3,160,000
3,150,000 Quiksilver, Inc., 6.875% due 4/15/2015 2,937,375
3,475,000 Samsonite Corp., 8.875% due 6/01/2011 3,570,563
-------------
32,375,969
===============================================================================
Diversified Media--7.4%
1,575,000 American Media Operations, Inc. Series B, 10.25%
due 5/01/2009 1,460,812
4,125,000 CBD Media, Inc., 8.625% due 6/01/2011 4,042,500
2,525,000 Cadmus Communications Corp., 8.375%
due 6/15/2014 2,468,187
3,800,000 CanWest Media, Inc., 8% due 9/15/2012 3,676,500
2,256,000 Dex Media West LLC, 9.875% due 8/15/2013 2,422,380
2,525,000 Houghton Mifflin Co., 12.031%
due 5/15/2011 (a)(c) 2,537,625
3,173,000 Liberty Media Corp., 0.75% due 3/30/2023 (h) 3,327,684
4,775,000 Nielsen Finance LLC, 10% due 8/01/2014 (a) 4,888,406
5,050,000 Quebecor World Capital Corp., 8.75%
due 3/15/2016 (a) 4,747,000
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 7
Schedule of Investments (continued) (in U.S. dollars)
Face
Amount Corporate Bonds Value
===============================================================================
Diversified Media (concluded)
RH Donnelley Corp.:
$2,275,000 Series A-2, 6.875% due 1/15/2013 $ 2,041,813
2,400,000 Series A-3, 8.875% due 1/15/2016 2,364,000
2,850,000 Universal City Florida Holding Co. I, 10.239%
due 5/01/2010 (c) 2,914,125
-------------
36,891,032
===============================================================================
Energy--Exploration & Production--4.8%
2,500,000 Chaparral Energy, Inc., 8.50% due 12/01/2015 2,518,750
4,750,000 Compton Petroleum Finance Corp., 7.625%
due 12/01/2013 4,631,250
3,150,000 Encore Acquisition Co., 6.25% due 4/15/2014 2,961,000
4,450,000 Exco Resources, Inc., 7.25% due 1/15/2011 4,327,625
Plains Exploration & Production Co.:
325,000 7.125% due 6/15/2014 333,125
4,250,000 Series B, 8.75% due 7/01/2012 4,462,500
3,175,000 Pogo Producing Co., 7.875% due 5/01/2013 (a) 3,238,500
1,625,000 Quicksilver Resources, Inc., 7.125%
due 4/01/2016 1,551,875
-------------
24,024,625
===============================================================================
Energy--Other--4.7%
1,750,000 Copano Energy LLC, 8.125% due 3/01/2016 1,771,875
3,975,000 Dresser, Inc., 9.375% due 4/15/2011 4,044,562
650,000 Ferrellgas Escrow LLC, 6.75% due 5/01/2014 625,625
3,825,000 Ferrellgas Partners LP, 8.75% due 6/15/2012 3,958,875
3,175,000 MarkWest Energy Partners LP, 8.50%
due 7/15/2016 (a) 3,214,687
3,200,000 Ocean RIG ASA, 9.481% due 4/04/2011 3,176,000
3,700,000 SemGroup LP, 8.75% due 11/15/2015 (a) 3,764,750
3,200,000 Suburban Propane Partners, LP, 6.875%
due 12/15/2013 3,064,000
-------------
23,620,374
===============================================================================
Financial--0.4%
1,600,000 Saxon Capital, Inc., 12% due 5/01/2014 (a) 2,186,581
===============================================================================
Food & Tobacco--4.4%
1,300,000 AmeriQual Group LLC, 9.50% due 4/01/2012 (a) 1,326,000
Constellation Brands Inc.:
3,800,000 8.125% due 1/15/2012 3,942,500
1,950,000 7.25% due 9/01/2016 1,959,750
4,800,000 Cott Beverages USA, Inc., 8% due 12/15/2011 4,860,000
4,791,000 Del Monte Corp., 8.625% due 12/15/2012 5,012,584
1,600,000 Michael Foods, Inc., 8% due 11/15/2013 1,632,000
3,150,000 National Beef Packing Co. LLC, 10.50%
due 8/01/2011 3,283,875
-------------
22,016,709
===============================================================================
Gaming--10.5%
5,175,000 Boyd Gaming Corp., 8.75% due 4/15/2012 5,427,281
2,200,000 Caesars Entertainment, Inc., 7.875%
due 3/15/2010 2,293,500
Galaxy Entertainment Finance Co. Ltd. (a):
1,675,000 10.42% due 12/15/2010 (c) 1,754,562
875,000 9.875% due 12/15/2012 916,562
2,775,000 Inn of the Mountain Gods Resort & Casino, 12%
due 11/15/2010 2,802,750
Isle of Capri Casinos, Inc.:
1,875,000 9% due 3/15/2012 1,961,719
625,000 7% due 3/01/2014 593,750
2,125,000 Jacobs Entertainment Co., 9.75%
due 6/15/2014 (a) 2,122,344
2,425,000 Little Traverse Bay Bands of Odawa Indians,
10.25% due 2/15/2014 (a) 2,412,875
MGM Mirage:
2,575,000 9.75% due 6/01/2007 2,639,375
1,150,000 6.75% due 4/01/2013 (a) 1,109,750
1,575,000 Mirage Resorts, Inc., 6.75% due 2/01/2008 1,580,906
3,150,000 Penn National Gaming, Inc., 6.875%
due 12/01/2011 3,134,250
3,950,000 Poster Financial Group, Inc., 8.75%
due 12/01/2011 4,127,750
4,200,000 Resorts International Hotel and Casino, Inc.,
11.50% due 3/15/2009 4,394,250
1,575,000 San Pasqual Casino, 8% due 9/15/2013 (a) 1,584,844
Station Casinos, Inc.:
1,900,000 6.50% due 2/01/2014 1,771,750
2,575,000 7.75% due 8/15/2016 2,655,469
2,225,000 6.625% due 3/15/2018 1,985,813
4,525,000 Trump Entertainment Resorts, Inc., 8.50%
due 6/01/2015 4,377,938
2,825,000 Wynn Las Vegas LLC, 6.625% due 12/01/2014 2,697,875
-------------
52,345,313
===============================================================================
Health Care--10.8%
1,925,000 Athena Neurosciences Finance LLC, 7.25%
due 2/21/2008 1,910,562
6,100,000 DaVita, Inc., 7.25% due 3/15/2015 5,978,000
3,175,000 Elan Finance Plc, 9.405% due 11/15/2011 (c) 3,206,750
3,175,000 HCA, Inc., 5.50% due 12/01/2009 3,131,344
4,750,000 HealthSouth Corp., 11.418%
due 6/15/2014 (a)(c) 4,880,625
Mylan Laboratories, Inc.:
3,500,000 5.75% due 8/15/2010 3,403,750
3,375,000 6.375% due 8/15/2015 3,252,656
2,725,000 Omnicare, Inc., 6.75% due 12/15/2013 2,616,000
Select Medical Corp.:
2,225,000 7.625% due 2/01/2015 1,924,625
2,225,000 10.82% due 9/15/2015 (c) 2,047,000
1,575,000 Tenet Healthcare Corp., 9.875% due 7/01/2014 1,535,625
4,175,000 Triad Hospitals, Inc., 7% due 5/15/2012 4,101,938
4,775,000 U.S. Oncology, Inc., 9% due 8/15/2012 4,942,125
1,575,000 VWR International, Inc., 8% due 4/15/2014 1,559,250
3,175,000 Vanguard Health Holding Co. II, LLC, 9%
due 10/01/2014 3,079,750
6,325,000 Ventas Realty, LP, 6.75% due 6/01/2010 6,443,594
-------------
54,013,594
===============================================================================
Housing--5.1%
Building Materials Corp. of America:
2,350,000 8% due 10/15/2007 2,338,250
8,850,000 8% due 12/01/2008 8,805,750
4,750,000 Forest City Enterprises, Inc., 7.625%
due 6/01/2015 4,785,625
Goodman Global Holding Co., Inc.:
1,147,000 8.329% due 6/15/2012 (c) 1,147,000
2,225,000 7.875% due 12/15/2012 2,085,937
2,550,000 Ply Gem Industries, Inc., 9% due 2/15/2012 2,065,500
1,275,000 Standard-Pacific Corp., 9.25% due 4/15/2012 1,192,125
1,275,000 Technical Olympic USA, Inc., 8.25%
due 4/01/2011 (a) 1,192,125
1,600,000 Texas Industries, Inc., 7.25% due 7/15/2013 1,600,000
-------------
25,212,312
===============================================================================
8 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Schedule of Investments (continued) (in U.S. dollars)
Face
Amount Corporate Bonds Value
===============================================================================
Information Technology--4.7%
$2,792,000 Cypress Semiconductor Corp., 1.25%
due 6/15/2008 (h) $ 3,301,540
MagnaChip Semiconductor SA:
3,325,000 8.579% due 12/15/2011 (c) 2,842,875
350,000 8% due 12/15/2014 224,000
SunGard Data Systems, Inc.:
3,875,000 9.125% due 8/15/2013 4,000,938
2,625,000 9.973% due 8/15/2013 (c) 2,743,125
1,625,000 10.25% due 8/15/2015 1,659,531
650,000 Telcordia Technologies Inc., 10%
due 3/15/2013 (a) 518,375
2,100,000 UGS Capital Corp. II, 10.38% due 6/01/2011
(a)(f) 2,115,750
2,225,000 UGS Corp., 10% due 6/01/2012 2,391,875
3,575,000 Viasystems, Inc., 10.50% due 1/15/2011 3,467,750
-------------
23,265,759
===============================================================================
Leisure--1.9%
FelCor Lodging LP:
2,425,000 8.50% due 6/01/2011 2,564,437
4,650,000 9.57% due 6/01/2011 (c) 4,766,250
2,375,000 Host Marriott LP, 6.75% due 6/01/2016 2,303,750
-------------
9,634,437
===============================================================================
Manufacturing--2.4%
3,500,000 CPI Holdco, Inc., 11.298% due 2/01/2015 (c) 3,605,000
3,175,000 Chart Industries, Inc., 9.125% due 10/15/2015
(a) 3,302,000
1,455,000 Invensys Plc, 9.875% due 3/15/2011 (a) 1,571,400
3,800,000 Trimas Corp., 9.875% due 6/15/2012 3,600,500
-------------
12,078,900
===============================================================================
Metal--Other--2.0%
3,250,000 Foundation PA Coal Co., 7.25% due 8/01/2014 3,160,625
3,775,000 Indalex Holding Corp.,11.50% due 2/01/2014 (a) 4,001,500
3,175,000 Novelis, Inc., 8.25% due 2/15/2015 (a) 3,016,250
-------------
10,178,375
===============================================================================
Packaging--2.4%
3,475,000 Graham Packing Co., Inc., 9.875%
due 10/15/2014 3,344,687
Owens-Brockway:
4,175,000 8.875% due 2/15/2009 4,289,812
1,575,000 8.25% due 5/15/2013 1,594,687
2,775,000 Packaging Dynamics Finance Corp., 10%
due 5/01/2016 (a) 2,775,000
-------------
12,004,186
===============================================================================
Paper--8.0%
3,200,000 Abitibi-Consolidated, Inc., 8.829%
due 6/15/2011 (c) 3,152,000
3,175,000 Boise Cascade LLC, 8.382% due 10/15/2012 (c) 3,190,875
4,475,000 Bowater, Inc., 8.329% due 3/15/2010 (c) 4,519,750
5,075,000 Domtar, Inc., 7.125% due 8/15/2015 4,719,750
Graphic Packaging International Corp.:
1,675,000 8.50% due 8/15/2011 1,700,125
2,825,000 9.50% due 8/15/2013 2,839,125
NewPage Corp.:
2,400,000 11.739% due 5/01/2012 (c) 2,592,000
1,600,000 12% due 5/01/2013 1,652,000
5,400,000 Norske Skog Canada Ltd. Series D, 8.625%
due 6/15/2011 5,305,500
3,175,000 Rock-Tenn Co., 8.20% due 8/15/2011 3,270,250
4,150,000 Smurfit Kappa Funding Plc, 9.625%
due 10/01/2012 4,331,563
Verso Paper Holdings LLC (a):
1,525,000 9.125% due 8/01/2014 1,517,375
1,075,000 11.375% due 8/01/2016 1,064,250
-------------
39,854,563
===============================================================================
Retail--1.6%
4,150,000 Jean Coutu Group, Inc., 8.50% due 8/01/2014 3,958,062
Neiman Marcus Group, Inc.:
2,225,000 9% due 10/15/2015 2,364,062
1,575,000 10.375% due 10/15/2015 1,685,250
-------------
8,007,374
===============================================================================
Service--7.4%
3,175,000 Ashtead Capital, Inc., 9% due 8/15/2016 (a) 3,238,500
Avis Budget Car Rental LLC (a):
950,000 7.625% due 5/15/2014 902,500
4,450,000 7.905% due 5/15/2014 (c) 4,349,875
4,775,000 Corrections Corp. of America, 7.50%
due 5/01/2011 4,876,469
2,825,000 Dycom Industries, Inc., 8.125% due 10/15/2015 2,853,250
1,875,000 MSW Energy Holdings LLC, 8.50% due 9/01/2010 1,931,250
750,000 MSW Energy Holdings II LLC, 7.375%
due 9/01/2010 753,750
3,175,000 Mac-Gray Corp., 7.625% due 8/15/2015 3,222,625
4,775,000 Service Corp. International, 8% due 6/15/2017
(a) 4,572,063
5,400,000 United Rentals North America, Inc., 7.75%
due 11/15/2013 5,170,500
4,775,000 Waste Services, Inc., 9.50% due 4/15/2014 4,870,500
-------------
36,741,282
===============================================================================
Steel--0.9%
3,175,000 Chaparral Steel Co., 10% due 7/15/2013 3,508,375
700,000 Ucar Finance, Inc., 10.25% due 2/15/2012 735,000
-------------
4,243,375
===============================================================================
Telecommunications--5.2%
ADC Telecommunications, Inc. (h):
2,226,000 1% due 6/15/2008 2,061,833
1,025,000 5.795% due 6/15/2013 (c) 964,781
3,175,000 Inmarsat Finance Plc, 7.625% due 6/30/2012 3,254,375
4,900,000 LCI International, Inc., 7.25% due 6/15/2007 4,900,000
3,800,000 Nordic Telephone Co. Holdings ApS, 8.875%
due 5/01/2016 (a) 3,952,000
650,000 Qwest Communications International, Inc., 7.50%
due 2/15/2014 644,313
Qwest Corp.:
2,300,000 8.579% due 6/15/2013 (c) 2,475,375
875,000 7.625% due 6/15/2015 897,969
1,450,000 Time Warner Telecom Holdings, Inc., 9.405%
due 2/15/2011 (c) 1,479,000
4,800,000 Windstream Corp., 8.125% due 8/01/2013 (a) 5,064,000
-------------
25,693,646
===============================================================================
Transportation--0.9%
2,225,000 OMI Corp., 7.625% due 12/01/2013 2,225,000
2,250,000 Teekay Shipping Corp., 8.875% due 7/15/2011 2,362,500
-------------
4,587,500
===============================================================================
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 9
Schedule of Investments (continued) (in U.S. dollars)
Face
Amount Corporate Bonds Value
===============================================================================
Utility--10.0%
The AES Corp.:
$4,000,000 9.375% due 9/15/2010 $ 4,320,000
100,000 8.75% due 5/15/2013 (a) 107,375
2,124,000 CenterPoint Energy, Inc. Series B, 3.75%
due 5/15/2023 (h) 2,737,305
4,775,000 Dynegy Holdings, Inc., 8.375% due 5/01/2016 (a) 4,703,375
4,128,000 ESI Tractebel Acquisition Corp. Series B, 7.99%
due 12/30/2011 4,273,256
4,125,000 Edison Mission Energy, 7.50% due 6/15/2013 (a) 4,125,000
2,825,000 El Paso Performance-Linked Trust, 7.75%
due 7/15/2011 (a) 2,877,969
4,125,000 Mirant North America LLC, 7.375%
due 12/31/2013 4,083,750
NRG Energy, Inc.:
2,550,000 7.25% due 2/01/2014 2,518,125
2,350,000 7.375% due 2/01/2016 2,314,750
Nevada Power Co.:
622,000 9% due 8/15/2013 678,029
2,400,000 Series A, 8.25% due 6/01/2011 2,629,032
4,750,000 Reliant Energy, Inc., 9.50% due 7/15/2013 4,940,000
3,825,000 Sierra Pacific Power Co. Series A, 8%
due 6/01/2008 3,952,434
775,000 Sierra Pacific Resources, 8.625% due 3/15/2014 833,054
1,650,000 Southern Natural Gas Co., 8.875%
due 3/15/2010 1,730,928
3,322,601 Tenaska Alabama Partners LP, 7%
due 6/30/2021 (a) 3,190,903
-------------
50,015,285
===============================================================================
Wireless Communications--4.1%
2,675,000 Centennial Cellular Operating Co. LLC, 10.125%
due 6/15/2013 2,822,125
1,900,000 Dobson Communications Corp., 9.757%
due 10/15/2012 (c) 1,923,750
3,800,000 IWO Holdings, Inc., 9.257% due 1/15/2012 (c) 3,923,500
Rogers Wireless Communications, Inc.:
1,875,000 8.454% due 12/15/2010 (c) 1,924,219
250,000 8% due 12/15/2012 261,250
5,250,000 6.375% due 3/01/2014 5,145,000
Rural Cellular Corp.:
3,125,000 8.25% due 3/15/2012 3,203,125
950,000 8.25% due 3/15/2012 (a) 973,750
-------------
20,176,719
-------------------------------------------------------------------------------
Total Corporate Bonds
(Cost--$670,287,491)--134.2% 668,295,201
===============================================================================
Floating Rate Loan Interests (k)
===============================================================================
Cable--U.S.--1.6%
8,400,000 Century Cable Holdings LLC, Discretionary Term
Loan, 10.25% due 12/31/2009 8,142,750
===============================================================================
Chemicals--1.0%
4,870,000 Wellman, Inc. Second Lien Term Loan, 12.239%
due 2/10/2010 4,760,425
-------------------------------------------------------------------------------
Total Floating Rate Loan Interests
(Cost--$12,771,338)--2.6% 12,903,175
===============================================================================
Foreign Government Obligations
===============================================================================
Government--Foreign--1.2%
4,800,000 Brazilian Government International Bond, 11%
due 8/17/2040 6,271,200
-------------------------------------------------------------------------------
Total Foreign Government Obligations
(Cost--$6,076,029)--1.2% 6,271,200
===============================================================================
Shares
Held Common Stocks
===============================================================================
Cable--U.S.--0.7%
126,494 Loral Space & Communications Ltd. (g) 3,250,896
===============================================================================
Manufacturing--0.5%
116,910 Medis Technologies Ltd. (g) 2,341,707
===============================================================================
Paper--0.0%
78,039 Western Forest Products, Inc. (g) 116,030
-------------------------------------------------------------------------------
Total Common Stocks
(Cost--$6,506,742)--1.2% 5,708,633
===============================================================================
===============================================================================
Preferred Securities
-------------------------------------------------------------------------------
Face
Amount Capital Trusts
===============================================================================
Health Care--1.2%
$5,975,000 Fresenius Medical Care Capital Trust II, 7.875%
due 2/01/2008 6,094,500
-------------------------------------------------------------------------------
Total Capital Trusts
(Cost--$6,090,290)--1.2% 6,094,500
===============================================================================
Shares
Held Preferred Stocks
===============================================================================
Cable--U.S.--0.4%
9,781 Loral Spacecom Corp.
Series A, 12% (f) 1,931,748
-------------------------------------------------------------------------------
Total Preferred Stocks
(Cost--$1,931,430)--0.4% 1,931,748
-------------------------------------------------------------------------------
Total Preferred Securities
(Cost--$8,021,720)--1.6% 8,026,248
===============================================================================
10 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Schedule of Investments (concluded) (in U.S. dollars)
Shares
Held Warrants (d) Value
===============================================================================
Health Care--0.0%
54,577 HealthSouth Corp.
(expires 1/16/2014) $ 95,510
-------------------------------------------------------------------------------
Total Warrants
(Cost--$0)--0.0% 95,510
===============================================================================
Beneficial
Interest Short-Term Securities
===============================================================================
$ 67,441 Merrill Lynch Liquidity Series, LLC
Cash Sweep Series I, 5.11% (e)(i) 67,441
-------------------------------------------------------------------------------
Total Short-Term Securities
(Cost--$67,441)--0.0% 67,441
===============================================================================
Total Investments (Cost--$703,730,761*)--140.8% 701,367,408
Liabilities in Excess of Other Assets--(40.8%) (203,271,489)
-------------
Net Assets--100.0% $ 498,095,919
=============
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2006, as computed for federal income tax purposes, were as
follows:
Aggregate cost ........................................... $ 704,465,616
=============
Gross unrealized appreciation ............................ $ 11,089,769
Gross unrealized depreciation ............................ (14,187,977)
-------------
Net unrealized depreciation .............................. $ (3,098,208)
=============
(a) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(b) Represents a step bond; the interest rate shown reflects the effective
yield at the time of purchase.
(c) Floating rate security.
(d) Warrants entitle the Fund to purchase a predetermined number of shares of
common stock and are non-income producing. The purchase price and number
of shares are subject to adjustment under certain conditions until the
expiration date.
(e) Represents the current yield as of August 31, 2006.
(f) Represents a pay-in-kind security which may pay interest/dividends in
additional face/shares.
(g) Non-income producing security.
(h) Convertible security.
(i) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net Interest
Affiliate Activity Income
--------------------------------------------------------------------------
Merrill Lynch Liquidity Series, LLC
Cash Sweep Series I $ 67,441 $ 28,123
--------------------------------------------------------------------------
(j) As a result of bankruptcy proceedings, the company did not repay the
principal amount of the security upon maturity.
(k) Floating rate loan interests in which the Fund invests generally pay
interest at rates that are periodically redetermined by reference to a
base lending rate plus a premium. The base lending rates are generally (i)
the lending rate offered by one or more major European banks, such as
LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by one
or more major U.S. banks or (iii) the certificate of deposit rate.
(l) Non-income producing security; issuer filed for bankruptcy or is in
default of interest payments.
o For Fund compliance purposes, the Fund's industry classifications refer to
any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report which may combine industry sub-classifications for reporting
ease. Industries are shown as a percent of net assets. These industry
classifications are unaudited.
o Swaps outstanding as of August 31, 2006 were as follows:
-----------------------------------------------------------------------------------
Unrealized
Notional Appreciation
Amount (Depreciation)
-----------------------------------------------------------------------------------
Sold credit default protection on General Motors
Acceptance Corp. and receive 3.50%
Broker, JPMorgan Chase
Expires March 2007 $1,250,000 $ 17,720
Sold credit default protection on General Motors
Acceptance Corp. and receive 4.50%
Broker, Morgan Stanley Capital Group, Inc.
Expires March 2007 $1,250,000 24,540
Sold credit default protection on General Motors
Corp. and receive 4.40%
Broker, Morgan Stanley Capital Services, Inc.
Expires June 2007 $ 625,000 10,037
Sold credit default protection on General Motors
Corp. and receive 8.00%
Broker, Morgan Stanley Capital Services, Inc.
Expires June 2007 $ 625,000 27,638
Sold credit default protection on Dow Jones
CDX North American High Yield 100 Index
Series 6 and receive 3.45%
Broker, UBS Warburg
Expires June 2011 $1,600,000 (2,902)
Sold credit default protection on Dow Jones
CDX North American High Yield 100 Index
Series 6 and receive 3.45%
Broker, UBS Warburg
Expires June 2011 $4,725,000 (14,024)
Sold credit default protection on Dow Jones
CDX North American High Yield B Index Series 6
and receive 3.00%
Broker, UBS Warburg
Expires June 2011 $4,725,000 18,043
-----------------------------------------------------------------------------------
Total $ 81,052
=============
See Notes to Financial Statements.
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 11
Statement of Assets, Liabilities and Capital
As of August 31, 2006
===================================================================================================================================
Assets
-----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (identified cost--$703,663,320) ....... $701,299,967
Investments in affiliated securities, at value (identified cost--$67,441) .............. 67,441
Cash ................................................................................... 100,000
Unrealized appreciation on swaps ....................................................... 97,978
Swap premiums paid ..................................................................... 63,185
Receivables:
Interest ............................................................................ $ 13,388,037
Securities sold ..................................................................... 2,745,799
Swaps ............................................................................... 108,985 16,242,821
------------
Prepaid expenses ....................................................................... 3,767
------------
Total assets ........................................................................... 717,875,159
------------
===================================================================================================================================
Liabilities
-----------------------------------------------------------------------------------------------------------------------------------
Loans .................................................................................. 216,200,000
Unrealized depreciation on swaps ....................................................... 16,926
Payables:
Securities purchased ................................................................ 2,688,272
Investment adviser .................................................................. 339,809
Interest on loans ................................................................... 231,685
Dividends to shareholders ........................................................... 200,718
Other affiliates .................................................................... 4,125 3,464,609
------------
Accrued expenses ....................................................................... 97,705
------------
Total liabilities ...................................................................... 219,779,240
------------
===================================================================================================================================
Net Assets
-----------------------------------------------------------------------------------------------------------------------------------
Net assets ............................................................................. $498,095,919
============
===================================================================================================================================
Capital
-----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.10 par value, 200,000,000 shares authorized ............................ $ 3,528,644
Paid-in capital in excess of par ....................................................... 501,493,556
Undistributed investment income--net ................................................... $ 3,055,699
Accumulated realized capital losses--net ............................................... (7,699,679)
Unrealized depreciation--net ........................................................... (2,282,301)
------------
Total accumulated losses--net (6,926,281)
------------
Total capital--Equivalent to $14.12 per share based on 35,286,436 shares of capital
stock outstanding (market price--$12.48) .............................................. $498,095,919
============
See Notes to Financial Statements.
12 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Statement of Operations
For the Year Ended August 31, 2006
===================================================================================================================================
Investment Income
-----------------------------------------------------------------------------------------------------------------------------------
Interest (including $28,123 from affiliates) ........................................... $ 54,667,695
Dividends .............................................................................. 417,020
Other .................................................................................. 490,857
------------
Total income ........................................................................... 55,575,572
------------
===================================================================================================================================
Expenses
-----------------------------------------------------------------------------------------------------------------------------------
Loan interest expense .................................................................. $ 9,004,348
Investment advisory fees ............................................................... 4,824,787
Borrowing costs ........................................................................ 263,472
Accounting services .................................................................... 172,308
Professional fees ...................................................................... 87,307
Transfer agent fees .................................................................... 67,540
Printing and shareholder reports ....................................................... 44,048
Custodian fees ......................................................................... 36,252
Pricing services ....................................................................... 30,182
Directors' fees and expenses ........................................................... 24,931
Listing fees ........................................................................... 21,769
Other .................................................................................. 40,113
------------
Total expenses ......................................................................... 14,617,057
------------
Investment income--net ................................................................. 40,958,515
------------
===================================================================================================================================
Realized & Unrealized Gain (Loss)--Net
-----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments--net .................................................................... (7,096,659)
Foreign currency transaction--net ................................................... (4)
Swaps--net .......................................................................... 739,360 (6,357,303)
------------
Change in unrealized appreciation/depreciation on:
Investments--net .................................................................... (10,919,746)
Swaps--net .......................................................................... 70,854 (10,848,892)
----------------------------
Total realized and unrealized loss--net ................................................ (17,206,195)
------------
Net Increase in Net Assets Resulting from Operations ................................... $ 23,752,320
============
See Notes to Financial Statements.
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 13
Statements of Changes in Net Assets
For the Year Ended
August 31,
----------------------------
Increase (Decrease) in Net Assets: 2006 2005
===================================================================================================================================
Operations
-----------------------------------------------------------------------------------------------------------------------------------
Investment income--net ................................................................. $ 40,958,515 $ 48,420,037
Realized gain (loss)--net .............................................................. (6,357,303) 19,825,223
Change in unrealized appreciation/depreciation--net .................................... (10,848,892) (13,335,576)
----------------------------
Net increase in net assets resulting from operations ................................... 23,752,320 54,909,684
----------------------------
===================================================================================================================================
Dividends & Distributions to Shareholders
-----------------------------------------------------------------------------------------------------------------------------------
Investment income--net ................................................................. (41,283,214) (52,626,956)
Realized gain--net ..................................................................... (16,468,850) (24,641,888)
----------------------------
Net decrease in net assets resulting from dividends and distributions to shareholders .. (57,752,064) (77,268,844)
----------------------------
===================================================================================================================================
Capital Stock Transactions
-----------------------------------------------------------------------------------------------------------------------------------
Value of shares issued to Common Stock shareholders in reinvestment of dividends and
distributions ......................................................................... 64,908 --
----------------------------
Net increase in net assets derived from capital stock transactions ..................... 64,908 --
----------------------------
===================================================================================================================================
Net Assets
-----------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets ........................................................... (33,934,836) (22,359,160)
Beginning of year ...................................................................... 532,030,755 554,389,915
----------------------------
End of year* ........................................................................... $498,095,919 $532,030,755
============================
* Undistributed investment income--net ................................................ $ 3,055,699 $ 2,178,295
============================
See Notes to Financial Statements.
14 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Statement of Cash Flows
For the Year Ended August 31, 2006
===================================================================================================================================
Cash Provided by Operating Activities
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations .............................................. $ 23,752,320
Adjustments to reconcile net increase in net assets resulting from operations to net
cash provided by operating activities:
Increase in receivables and swap premiums paid ................................................. (698,247)
Decrease in other assets ....................................................................... 26
Increase in other liabilities .................................................................. 124,674
Realized and unrealized loss--net .............................................................. 17,206,195
Amortization of premium and discount ........................................................... (429,642)
Realized loss on foreign currency transactions .................................................... (2)
Proceeds from sales and paydowns of long-term investments ......................................... 427,900,085
Other investment related transactions ............................................................. 739,360
Purchases of long-term investments ................................................................ (441,773,965)
Purchases of short-term investments--net .......................................................... (67,441)
-------------
Net cash provided by operating activities ......................................................... 26,753,363
-------------
===================================================================================================================================
Cash Used by Financing Activities
-----------------------------------------------------------------------------------------------------------------------------------
Cash receipts from borrowings ..................................................................... 320,500,000
Cash payments on borrowings ....................................................................... (289,500,000)
Dividends and distributions paid to shareholders .................................................. (57,747,523)
-------------
Net cash used for financing activities ............................................................ (26,747,523)
-------------
===================================================================================================================================
Cash Impact from Foreign Exchange Fluctuations
-----------------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash ........................................................... (2)
=============
===================================================================================================================================
Cash
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in cash .............................................................................. 5,838
Cash at beginning of year ......................................................................... 94,162
-------------
Cash at end of year ............................................................................... $ 100,000
=============
===================================================================================================================================
Cash Flow Information
-----------------------------------------------------------------------------------------------------------------------------------
Cash paid for interest ............................................................................ $ 8,905,592
=============
===================================================================================================================================
Non-Cash Financing Activities
-----------------------------------------------------------------------------------------------------------------------------------
Capital shares issued in reinvestment of dividends and distributions to shareholders .............. $ 64,908
=============
See Notes to Financial Statements.
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 15
Financial Highlights
For the Year Ended For the Period
August 31, May 30, 2003+
The following per share data and ratios have been derived ------------------------------------ to August 31,
from information provided in the financial statements. 2006 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period .................................... $ 15.08 $ 15.71 $ 14.39 $ 14.33
--------------------------------------------------
Investment income--net ............................................... 1.16*** 1.37*** 1.50 .30
Realized and unrealized gain (loss)--net ............................. (.49) .19 1.27 (.03)
--------------------------------------------------
Total from investment operations ........................................ .67 1.56 2.77 .27
--------------------------------------------------
Less dividends and distributions:
Investment income--net ............................................... (1.17) (1.49) (1.43) (.20)
Realized gain--net ................................................... (.46) (.70) (.02) --
--------------------------------------------------
Total dividends and distributions ....................................... (1.63) (2.19) (1.45) (.20)
--------------------------------------------------
Offering costs resulting from the issuance of Common Stock .............. -- -- -- (.01)
--------------------------------------------------
Net asset value, end of period .......................................... $ 14.12 $ 15.08 $ 15.71 $ 14.39
--------------------------------------------------
Market price per share, end of period ................................... $ 12.48 $ 14.32 $ 14.52 $ 13.61
==================================================
===================================================================================================================================
Total Investment Return**
-----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ...................................... 6.29% 11.28% 20.70% 1.91%@
==================================================
Based on market price per share ......................................... (1.07%) 14.34% 17.95% (7.92%)@
==================================================
===================================================================================================================================
Ratios to Average Net Assets
-----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of waiver and excluding interest expense .................. 1.11% 1.11% 1.09% .45%*
==================================================
Expenses, net of waiver ................................................. 2.89% 2.09% 1.56% .52%*
==================================================
Expenses ................................................................ 2.89% 2.09% 1.57% .91%*
==================================================
Investment income--net .................................................. 8.11% 8.91% 9.76% 8.22%*
==================================================
===================================================================================================================================
Leverage
-----------------------------------------------------------------------------------------------------------------------------------
Amount of borrowings outstanding, end of period (in thousands) .......... $216,200 $185,200 $207,100 $113,300
==================================================
Average amount of borrowings outstanding during the period (in thousands) $184,070 $188,044 $178,605 $ 24,585
==================================================
Average amount of borrowings outstanding per share during the period*** . $ 5.22 $ 5.33 $ 5.06 $ .71
==================================================
===================================================================================================================================
Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ................................ $498,096 $532,031 $554,390 $507,588
==================================================
Portfolio turnover ...................................................... 62.38% 48.24% 81.43% 59.69%
==================================================
* Annualized.
** Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
dif ferent returns. Total investment returns exclude the effects of sales
charges.
*** Based on average shares outstanding.
+ Commencement of operations.
@ Aggregate total investment return.
See Notes to Financial Statements.
16 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Notes to Financial Statements
1. Significant Accounting Policies:
On September 29, 2006, Merrill Lynch Corporate High Yield Fund VI, Inc. was
renamed BlackRock Corporate High Yield Fund VI, Inc. (the "Fund"). The Fund is
registered under the Investment Company Act of 1940, as amended, as a
diversified, closed-end management investment company. The Fund's financial
statements are prepared in conformity with U.S. generally accepted accounting
principles, which may require the use of management accruals and estimates.
Actual results may differ from these estimates. The Fund determines and makes
available for publication the net asset value of its Common Stock on a daily
basis. The Fund's Common Stock shares are listed on the New York Stock Exchange
("NYSE") under the symbol HYT. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments -- Debt securities are traded primarily in the
over-the-counter ("OTC") markets and are valued at the last available bid price
in the OTC market or on the basis of values obtained by a pricing service.
Floating rate loan interests are valued at the mean between the last available
bid and asked prices from one or more brokers or dealers as obtained from a
pricing service. As of October 2, 2006, floating rate loan interests will be
valued at the mean between the last available bid prices. Pricing services use
valuation matrixes that incorporate both dealer-supplied valuations and
valuation models. The procedures of the pricing service and its valuations are
reviewed by the officers of the Fund under the general direction of the Board of
Directors. Such valuations and procedures will be reviewed periodically by the
Board of Directors of the Fund. Financial futures contracts and options thereon,
which are traded on exchanges, are valued at their closing prices as of the
close of such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of options traded
in the OTC market, valuation is the last asked price (options written) or the
last bid price (options purchased). Swap agreements are valued based upon quoted
fair valuations received daily by the Fund from a pricing service or
counterparty. Short-term investments with a remaining maturity of 60 days or
less are valued at amortized cost, which approximates market value, under which
method the investment is valued at cost and any premium or discount is amortized
on a straight line basis to maturity. Repurchase agreements are valued at cost
plus accrued interest. Investments in open-end investment companies are valued
at their net asset value each business day. Securities and other assets for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of Directors of
the Fund.
Equity securities that are held by the Fund, which are traded on stock exchanges
or the Nasdaq National Market, are valued at the last sale price or official
close price on the exchange, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price for long positions, and at the last available asked price for short
positions. In cases where equity securities are traded on more than one
exchange, the securities are valued on the exchange designated as the primary
market by or under the authority of the Board of Directors of the Fund. Long
positions traded in the OTC market, Nasdaq Small Cap or Bulletin Board are
valued at the last available bid price obtained from one or more dealers or
pricing services approved by the Board of Directors of the Fund. Short positions
traded in the OTC market are valued at the last available asked price. Portfolio
securities that are traded both in the OTC market and on a stock exchange are
valued according to the broadest and most representative market.
Generally, trading in foreign securities, as well as U.S. government securities,
money market instruments and certain fixed income securities, is substantially
completed each day at various times prior to the close of business on the NYSE.
The values of such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency exchange rates
will be generally determined prior to the close of business on the NYSE. As of
October 2, 2006, foreign currency exchange rates also are generally determined
at the close of business on the NYSE. Occasionally, events affecting the values
of such securities and such exchange rates may occur between the times at which
they are determined and the close of business on the NYSE that may not be
reflected in the computation of the Fund's net asset value. If events (for
example, a company announcement, market volatility or a natural disaster) occur
during such periods that are expected to materially affect the value of such
securities, those securities may be valued at their fair value as determined in
good faith by the Fund's Board of Directors or by the Investment Adviser using a
pricing service and/or procedures approved by the Fund's Board of Directors.
(b) Foreign currency transactions -- Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 17
Notes to Financial Statements (continued)
liabilities expressed in foreign currencies into U.S. dollars. Realized and
unrealized gains or losses from investments include the effects of foreign
exchange rates on investments. The Fund invests in foreign securities, which may
involve a number of risk factors and special considerations not present with
investments in securities of U.S. corporations.
(c) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the securities
markets. Losses may arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
o Options -- The Fund may write and purchase call and put options. When the
Fund writes an option, an amount equal to the premium received by the Fund
is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market
value of the option written. When a security is purchased or sold through
an exercise of an option, the related premium paid (or received) is added
to (or deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option expires
(or the Fund enters into a closing transaction), the Fund realizes a gain
or loss on the option to the extent of the premiums received or paid (or
gain or loss to the extent the cost of the closing transaction exceeds the
premium paid or received).
Written and purchased options are non-income producing investments.
o Financial futures contracts -- The Fund may purchase or sell financial
futures contracts and options on such financial futures contracts.
Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield.
Upon entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which the
transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or
losses. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time
it was opened and the value at the time it was closed.
o Swaps -- The Fund may enter into swap agreements, which are OTC contracts
in which the Fund and a counterparty agree to make periodic net payments
on a specified notional amount. The net payments can be made for a set
period of time or may be triggered by a predetermined credit event. The
net periodic payments may be based on a fixed or variable interest rate;
the change in market value of a specified security, basket of securities,
or index; or the return generated by a security. These periodic payments
received or made by the Fund are recorded in the accompanying Statement of
Operations as realized gains or losses, respectively. Gains or losses are
realized upon termination of the swap agreements. Swaps are
marked-to-market daily and changes in value are recorded as unrealized
appreciation (depreciation). Risks include changes in the returns of the
underlying instruments, failure of the counterparties to perform under the
contracts' terms and the possible lack of liquidity with respect to the
swap agreements.
(d) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(e) Recent accounting pronouncement -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48") entitled
"Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement No. 109." FIN 48 prescribes the minimum recognition threshold a tax
position must meet in connection with accounting for uncertainties in income tax
positions taken or expected to be taken by an entity including mutual funds
before being measured and recognized in the financial statements. Adoption of
FIN 48 is required for fiscal years beginning after December 15, 2006. The
impact on the Fund's financial statements, if any, is currently being assessed.
(f) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Fund amortizes all
premiums and discounts on debt securities.
(g) Dividends and distributions -- Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
18 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Notes to Financial Statements (continued)
(h) Securities lending -- The Fund may lend securities to financial institutions
that provide cash or securities issued or guaranteed by the U.S. government as
collateral, which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. The market value of
the loaned securities is determined at the close of business of the Fund and any
additional required collateral is delivered to the Fund on the next business
day. Where the Fund receives securities as collateral for the loaned securities,
it collects a fee from the borrower. The Fund typically receives the income on
the loaned securities but does not receive the income on the collateral. Where
the Fund receives cash collateral, it may invest such collateral and retain the
amount earned on such investment, net of any amount rebated to the borrower.
Loans of securities are terminable at any time and the borrower, after notice,
is required to return borrowed securities within five business days. The Fund
may pay reasonable finder's, lending agent, administrative and custodial fees in
connection with its loans. In the event that the borrower defaults on its
obligation to return borrowed securities because of insolvency or for any other
reason, the Fund could experience delays and costs in gaining access to the
collateral. The Fund also could suffer a loss where the value of the collateral
falls below the market value of the borrowed securities, in the event of
borrower default or in the event of losses on investments made with cash
collateral.
(i) Reclassifications -- U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, during the current
year, $1,198,834 has been reclassified between accumulated net realized capital
losses and undistributed net investment income, $3,269 has been reclassified
between paid-in capital in excess of par and undistributed net investment
income, and $1,649 has been reclassified between paid-in capital in excess of
par and accumulated net realized capital losses as a result of permanent
differences attributable to amortization methods on fixed income securities,
swap agreements, securities in default, the reclassification of distributions,
foreign currency transactions, non-deductible expenses, and distributions in
excess of capital gains. These reclassifications have no effect on net assets or
net asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect, wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML
& Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operation of the Fund. For such services, the Fund pays a monthly fee at
an annual rate of .70% of the Fund's average weekly net assets plus the proceeds
of any outstanding principal borrowed.
The Fund has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S"), an affiliate of FAM, or its affiliates.
Pursuant to that order, the Fund also has retained Merrill Lynch Investment
Managers, LLC ("MLIM, LLC"), an affiliate of FAM, as the securities lending
agent for a fee based on a share of the returns on investment of cash
collateral. MLIM, LLC may, on behalf of the Fund, invest cash collateral
received by the Fund for such loans, among other things, in a private investment
company managed by MLIM, LLC or in registered money market funds advised by
Merrill Lynch Investment Managers, L.P. ("MLIM"), an affiliate of FAM.
In addition, MLPF&S received $18,766 in commissions on the execution of
portfolio security transactions for the Fund for the year ended August 31, 2006.
For the year ended August 31, 2006, the Fund reimbursed FAM $11,079 for certain
accounting services.
In February 2006, ML & Co. and BlackRock, Inc. entered into an agreement to
contribute ML & Co.'s investment management business, including FAM, to the
investment management business of BlackRock, Inc. The transaction will close on
September 29, 2006.
On August 15, 2006, shareholders of the Fund approved a new Investment Advisory
Agreement with BlackRock Advisors, Inc. (the "Manager"), a wholly-owned
subsidiary of BlackRock, Inc. BlackRock Advisors, Inc. was reorganized into
BlackRock Advisors, LLC. The new advisory agreement will become effective on
September 29, 2006 and the investment advisory fee is unchanged. In addition,
the Manager has entered into a sub-advisory agreement with BlackRock Financial
Management, Inc., an affiliate, under which the
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 19
Notes to Financial Statements (concluded)
Manager pays the Sub-Adviser for services it provides a fee equal to 59% of the
management fee paid to the Manager.
In connection with the closing, MLIM, LLC, the security lending agent, will
become BlackRock Investment Management, LLC.
During the year ended August 31, 2006, certain officers and/or directors of the
Fund are officers and/or directors of FAM, PSI, ML & Co., and/or MLIM, LLC.
3. Investments:
Purchases and sales (including paydowns) of investments, excluding short-term
securities, for the year ended August 31, 2006 were $442,836,924 and
$426,158,472, respectively.
4. Capital Share Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock, par value
$.10, all of which were initially classified as Common Stock. The Board of
Directors is authorized, however, to classify and reclassify any unissued shares
of capital stock without approval of the holders of Common Stock.
Shares issued and outstanding during the year ended August 31, 2006 increased by
4,455 as a result of dividend reinvestment and during the year ended August 31,
2005 remained constant.
5. Short-Term Borrowings:
On May 22, 2006, the Fund renewed its revolving credit and security agreement
funded by a commercial paper asset securitization program with Citicorp North
America, Inc. ("Citicorp") as Agent, certain secondary backstop lenders, and
certain asset securitization conduits as lenders (the "Lenders"). The agreement
was renewed for one year and has a maximum limit of $250,000,000. Under the
Citicorp program, the conduits will fund advances to the Fund through the
issuance of highly rated commercial paper. As security for its obligations to
the Lenders under the revolving securitization facility, the Fund has granted a
security interest in substantially all of its assets to and in favor of the
Lenders. The interest rate on the Fund's borrowings is based on the interest
rate carried by the commercial paper plus a program fee. The Fund pays
additional borrowing costs including a backstop commitment fee.
The weighted average annual interest rate was 4.89% and the average borrowing
was approximately $184,070,000 for the year ended August 31, 2006.
6. Distributions to Shareholders:
The Fund paid an ordinary income dividend in the amount of $.090000 per share on
September 29, 2006 to shareholders of record on September 15, 2006.
The tax character of distributions paid during the fiscal years ended August 31,
2006 and August 31, 2005 was as follows:
--------------------------------------------------------------------------------
8/31/2006 8/31/2005
--------------------------------------------------------------------------------
Distributions paid from:
Ordinary income ................................. $44,754,941 $72,401,236
Net long-term capital gains ..................... 12,997,123 4,867,608
---------------------------
Total taxable distributions ....................... $57,752,064 $77,268,844
===========================
As of August 31, 2006, the components of accumulated losses on a tax basis were
as follows:
-----------------------------------------------------------------------------
Undistributed ordinary income--net ........................ $ 3,896,378
Undistributed long-term capital gains--net ................ --
-----------
Total undistributed earnings--net ......................... $ 3,896,378
Capital loss carryforward ................................. (2,291,195)*
Unrealized losses--net .................................... (8,531,464)**
-----------
Total accumulated losses--net ............................. $(6,926,281)
===========
* On August 31, 2006, the Fund had a net capital loss carryforward of
$2,291,195, all of which expires in 2014. This amount will be available to
offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized losses is
attributable primarily to the tax deferral of losses on wash sales, the
difference between book and tax amortization methods for premiums and
discounts on fixed income securities, the deferral of post-October capital
losses for tax purposes and other book/tax temporary differences.
20 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of BlackRock Corporate High Yield
Fund VI, Inc.:
We have audited the accompanying statement of assets, liabilities and capital,
including the schedule of investments, of BlackRock Corporate High Yield Fund
VI, Inc. (formerly Corporate High Yield Fund VI, Inc.) (the "Fund") as of August
31, 2006, and the related statements of operations and cash flows for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the respective
periods then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of August 31, 2006, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock Corporate High Yield Fund VI, Inc. as of August 31, 2006, the results
of its operations and its cash flows for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and its financial
highlights for each of the respective periods then ended, in conformity with
U.S. generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
October 20, 2006
Fund Certification (unaudited)
In May 2006, the Fund filed its Chief Executive Officer Certification for the
prior year with the New York Stock Exchange pursuant to Section 303A.12(a) of
the New York Stock Exchange Corporate Governance Listing Standards.
The Fund's Chief Executive Officer and Chief Financial Officer Certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with the
Fund's Form N-CSR and are available on the Securities and Exchange Commission's
Web site at http://www.sec.gov.
Important Tax Information (unaudited)
The following information is provided with respect to the net investment income
distributions paid monthly by BlackRock Corporate High Yield Fund VI, Inc. for
the fiscal year ended August 31, 2006:
--------------------------------------------------------------------------------
Interest-Related Dividends for Non-U.S. Residents
--------------------------------------------------------------------------------
Month Paid: September 2005 ........................................ 0.00%*
October 2005 .......................................... 79.02%*
November 2005 - January 2006 .......................... 86.00%*
February 2006 - August 2006 ........................... 84.58%*
--------------------------------------------------------------------------------
* Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for nonresident aliens and foreign
corporations.
Additionally, the Fund distributed long-term capital gains of $.368332 per share
to shareholders of record on December 30, 2005.
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 21
Disclosure of New Investment Advisory Agreement
New BlackRock Investment Advisory Agreement -- Matters Considered by the Board
In connection with the combination of Merrill Lynch's investment advisory
business, including Fund Asset Management, L.P. (the "Previous Investment
Adviser"), with that of BlackRock, Inc. ("BlackRock") to create a new
independent company ("New BlackRock") (the "Transaction"), the Fund's Board of
Directors considered and approved a new investment advisory agreement (the
"BlackRock Investment Advisory Agreement") between the Fund and BlackRock
Advisors, LLC ("BlackRock Advisors"). The Fund's shareholders subsequently
approved the BlackRock Investment Advisory Agreement and it became effective on
September 29, 2006, replacing the investment advisory agreement with the
Previous Investment Adviser (the "Previous Investment Advisory Agreement").
The Board discussed the BlackRock Investment Advisory Agreement at telephonic
and in-person meetings held during April and May 2006. The Board, including the
independent directors, approved the BlackRock Investment Advisory Agreement at
an in-person meeting held on May 9, 2006.
To assist the Board in its consideration of the BlackRock Investment Advisory
Agreement, BlackRock provided materials and information about BlackRock,
including its financial condition and asset management capabilities and
organization, and Merrill Lynch provided materials and information about the
Transaction. The independent directors, through their independent legal counsel,
also requested and received additional information from Merrill Lynch and
BlackRock in connection with their consideration of the BlackRock Investment
Advisory Agreement. The additional information was provided in advance of the
May 9, 2006 meeting. In addition, the independent directors consulted with their
counsel and Fund counsel on numerous occasions, discussing, among other things,
the legal standards and certain other considerations relevant to the directors'
deliberations.
At the Board meetings, the directors discussed with Merrill Lynch management and
certain BlackRock representatives the Transaction, its strategic rationale and
BlackRock's general plans and intentions regarding the Fund. At these Board
meetings, representatives of Merrill Lynch and BlackRock made presentations to
and responded to questions from the Board. The directors also inquired about the
plans for and anticipated roles and responsibilities of certain employees and
officers of the Previous Investment Adviser, and of its affiliates, to be
transferred to BlackRock in connection with the Transaction. The independent
directors of the Board also conferred separately and with their counsel about
the Transaction and other matters related to the Transaction on a number of
occasions, including in connection with the April and May 2006 meetings. After
the presentations and after reviewing the written materials provided, the
independent directors met in executive sessions with their counsel to consider
the BlackRock Investment Advisory Agreement.
In connection with the Board's review of the BlackRock Investment Advisory
Agreement, Merrill Lynch and/or BlackRock advised the directors about a variety
of matters. The advice included the following, among other matters:
o that there was not expected to be any diminution in the nature, quality
and extent of services provided to the Fund and its shareholders by
BlackRock Advisors including compliance services;
o that operation of New BlackRock as an independent investment management
firm would enhance its ability to attract and retain talented
professionals;
o that the Fund was expected to benefit from having access to BlackRock's
state of the art technology and risk management analytic tools, including
investment tools, provided under the BlackRock Solutions(R) brand name;
o that BlackRock had no present intention to alter any applicable expense
waivers or reimbursements that were currently in effect and, while it
reserved the right to do so in the future, it would seek the approval of
the Board before making any changes;
o that in connection with the Transaction, Merrill Lynch and BlackRock had
agreed to conduct, and use reasonable best efforts to cause their
respective affiliates to conduct, their respective businesses in
compliance with the conditions of Section 15(f) of the Investment Company
Act of 1940 (the "1940 Act") in relation to any public funds advised by
BlackRock or the Previous Investment Adviser (or affiliates),
respectively; and
o that Merrill Lynch and BlackRock would derive benefits from the
Transaction and that, as a result, they had a financial interest in the
matters being considered that was different from that of Fund
shareholders.
22 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
The directors considered the information provided by Merrill Lynch and BlackRock
above, and, among other factors, the following:
o the potential benefits to Fund shareholders from being part of a combined
fund family with BlackRock-sponsored funds, including possible economies
of scale and access to investment opportunities;
o the reputation, financial strength and resources of BlackRock and its
investment advisory subsidiaries and the anticipated financial strength
and resources of New BlackRock;
o the compliance policies and procedures of BlackRock Advisors;
o the terms and conditions of the BlackRock Investment Advisory Agreement,
including the fact that the schedule of the Fund's total advisory fees
would not increase under the BlackRock Investment Advisory Agreement, but
would remain the same;
o that in February 2006, the Board had performed a full annual review of the
Previous Investment Advisory Agreement, as required by the 1940 Act, and
had determined that the Previous Investment Adviser had the capabilities,
resources and personnel necessary to provide the advisory and
administrative services that were then being provided to the Fund; and
that the advisory and/or management fees paid by the Fund, taking into
account any applicable agreed-upon fee waivers and breakpoints, had
represented reasonable compensation to the Previous Investment Adviser in
light of the services provided, the costs to the Previous Investment
Adviser of providing those services, economies of scale, the fees and
other expenses paid by similar funds (including information provided by
Lipper Inc. ("Lipper")), and such other matters as the directors had
considered relevant in the exercise of their reasonable judgment; and
o that Merrill Lynch had agreed to pay all expenses of the Fund in
connection with the Board's consideration of the BlackRock Investment
Advisory Agreement and related agreements and all costs of shareholder
approval of the BlackRock Investment Advisory Agreement and as a result
the Fund would bear no costs in obtaining shareholder approval of the
BlackRock Investment Advisory Agreement.
Certain of these considerations are discussed in more detail below.
In its review of the BlackRock Investment Advisory Agreement, the Board assessed
the nature, quality and scope of the services to be provided to the Fund by the
personnel of BlackRock Advisors and its affiliates, including administrative
services, shareholder services, oversight of fund accounting and assistance in
meeting legal and regulatory requirements. In its review of the BlackRock
Investment Advisory Agreement, the Board also considered a range of information
in connection with its oversight of the services to be provided by BlackRock
Advisors and its affiliates. Among the matters considered were: (a) fees (in
addition to management fees) to be paid to BlackRock Advisors and its affiliates
by the Fund; (b) Fund operating expenses paid to third parties; (c) the
resources devoted to and compliance reports relating to the Fund's investment
objective, policies and restrictions, and its compliance with its Code of Ethics
and BlackRock Advisors' compliance policies and procedures; and (d) the nature,
cost and character of non-investment management services to be provided by
BlackRock Advisors and its affiliates.
In the period prior to the Board meeting to consider renewal of the Previous
Investment Advisory Agreement, the Board had requested and received materials
specifically relating to the Previous Investment Advisory Agreement. These
materials included (a) information compiled by Lipper on the fees and expenses
and the investment performance of the Fund as compared to a comparable group of
funds as classified by Lipper; (b) information comparing the Fund's market price
with its net asset value per share; (c) a discussion by the Fund's portfolio
management team on investment strategies used by the Fund during its most recent
fiscal year; (d) information on the profitability to the Previous Investment
Adviser of the Previous Investment Advisory Agreement and other payments
received by the Previous Investment Adviser and its affiliates from the Fund;
and (e) information provided by the Previous Investment Adviser concerning
services related to the valuation and pricing of Fund portfolio holdings, the
Fund's portfolio turnover statistics, and direct and indirect benefits to the
Previous Investment Adviser and its affiliates from their relationship with the
Fund.
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 23
Disclosure of New Investment Advisory Agreement (continued)
In their deliberations, the directors considered information received in
connection with their most recent approval of the continuance of the Previous
Investment Advisory Agreement, in addition to information provided by BlackRock
and BlackRock Advisors in connection with their evaluation of the terms and
conditions of the BlackRock Investment Advisory Agreement. The directors did not
identify any particular information that was all-important or controlling. The
directors, including a majority of the independent directors, concluded that the
terms of the BlackRock Investment Advisory Agreement are appropriate, that the
fees to be paid are reasonable in light of the services to be provided to the
Fund, and that the BlackRock Investment Advisory Agreement should be approved
and recommended to Fund shareholders.
Nature, Quality and Extent of Services Provided -- The Board reviewed the
nature, quality and extent of services provided by the Previous Investment
Adviser, including the investment advisory services and the resulting
performance of the Fund, as well as the nature, quality and extent of services
expected to be provided by BlackRock Advisors. The Board focused primarily on
the Previous Investment Adviser's investment advisory services and the Fund's
investment performance, but also considered certain areas in which both the
Previous Investment Adviser and the Fund received services as part of the
Merrill Lynch complex. The Board compared the Fund's performance -- both
including and excluding the effects of fees and expenses -- to the performance
of a comparable group of funds, and the performance of a relevant index or
combination of indexes. While the Board reviews performance data at least
quarterly, consistent with the Previous Investment Adviser's investment goals,
the Board attaches more importance to performance over relatively long periods
of time, typically three to five years.
In evaluating the nature, quality and extent of the services to be provided by
BlackRock Advisors under the BlackRock Investment Advisory Agreement, the
directors considered, among other things, the expected impact of the Transaction
on the operations, facilities, organization and personnel of New BlackRock and
how it would affect the Fund; the ability of BlackRock Advisors to perform its
duties after the Transaction; and any anticipated changes to the investment and
other practices of the Fund. The directors considered BlackRock's advice as to
proposed changes in portfolio management personnel of the Fund after the closing
of the Transaction.
The directors were given information with respect to the potential benefits to
the Fund and its shareholders from having access to BlackRock's state of the art
technology and risk management analytic tools, including the investment tools
provided under the BlackRock Solutions brand name.
The directors were advised that, as a result of Merrill Lynch's equity interest
in BlackRock after the Transaction, the Fund would continue to be subject to
restrictions concerning certain transactions involving Merrill Lynch affiliates
(for example, transactions with a Merrill Lynch broker-dealer acting as
principal) absent revised or new regulatory relief. The directors were advised
that a revision of existing regulatory relief with respect to these restrictions
was being sought from the Securities and Exchange Commission and were advised of
the possibility of receipt of such revised regulatory relief.
Based on their review of the materials provided and the assurances they had
received from the management of Merrill Lynch and of BlackRock, the directors
determined that the nature and quality of services to be provided to the Fund
under the BlackRock Investment Advisory Agreement were expected to be as good as
or better than that provided under the Previous Investment Advisory Agreement.
It was noted, however, that changes in-personnel were expected to follow the
Transaction and the combination of the operations of the Previous Investment
Adviser and its affiliates with those of BlackRock. The directors noted that if
portfolio managers or other personnel were to cease to be available prior to the
closing of the Transaction, the Board would consider all available options,
including seeking the investment advisory or other services of BlackRock
affiliates. Accordingly, the directors concluded that, overall, they were
satisfied at the present time with assurances from BlackRock and BlackRock
Advisors as to the expected nature, quality and extent of the services to be
provided to the Fund under the BlackRock Investment Advisory Agreement.
Costs of Services Provided and Profitability -- It was noted that, in
conjunction with the recent review of the Previous Investment Advisory
Agreement, the directors had received, among other things, a report from Lipper
comparing the Fund's fees and expenses to those of a peer group selected by
Lipper, and information as to the fees charged by the Previous Investment
Adviser or its affiliates to other registered investment company clients for
investment management services. The Board reviewed the Fund's contractual
management fee rate and actual management fee rate as a percentage of total
assets at common asset levels -- the actual rate includes advisory fees and the
effects of any fee
24 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
waivers -- compared to the other funds in its Lipper category. They also
compared the Fund's total expenses to those of other comparable funds. The
information showed that the Fund had fees and expenses within the range of fees
and expenses of comparable funds. The Board considered the services to be
provided by and the fees to be charged by BlackRock Advisors to other funds with
similar investment mandates and noted that the fees charged by BlackRock
Advisors in those cases, including fee waivers and expense reimbursements, were
generally comparable to those being charged to the Fund. The Board also noted
that, as a general matter, according to the information provided by BlackRock,
fees charged to institutional clients were lower than the fees charged to the
Fund, but BlackRock Advisors provided less extensive services to such clients.
The Board concluded that the Fund's management fee and fee rate and overall
expense ratio are reasonable compared to those of other comparable funds.
In evaluating the costs of the services to be provided by BlackRock Advisors
under the BlackRock Investment Advisory Agreement, the directors considered,
among other things, whether advisory fees or other expenses would change as a
result of the Transaction. Based on their review of the materials provided and
the fact that the BlackRock Investment Advisory Agreement is substantially
similar to the Previous Investment Advisory Agreement in all material respects,
including the rate of compensation, the directors determined that the
Transaction should not increase the total fees payable, including any fee
waivers, or after any expense caps or expense reimbursements, for advisory and
administrative services. The directors noted that it was not possible to predict
how the Transaction would affect BlackRock Advisors' profitability from its
relationship with the Fund.
The directors discussed with BlackRock Advisors its general methodology to be
used in determining its profitability with respect to its relationship with the
Fund and noted that they expect to receive profitability information from
BlackRock Advisors on at least an annual basis.
Fees and Economies of Scale -- The Board considered the extent to which
economies of scale might be realized as the assets of the Fund increase and
whether there should be changes in the management fee rate or structure in order
to enable the Fund to participate in these economies of scale. The Board
considered economies of scale to the extent applicable to the Fund's closed-end
structure and determined that the Fund appropriately benefits from any economies
of scale and no changes were currently necessary.
In reviewing the Transaction, the directors considered, among other things,
whether advisory fees or other expenses would change as a result of the
Transaction. Based on the fact that the BlackRock Investment Advisory Agreement
is substantially similar to the Previous Investment Advisory Agreement in all
material respects, including the rate of compensation, the directors determined
that as a result of the Transaction, the Fund's total advisory fees would be no
higher than the fees under the Previous Investment Advisory Agreement. The
directors concluded that because the rates for advisory fees for the Fund would
be no higher than the fee rates in effect at the time, the proposed management
fee structure, including any fee waivers, was reasonable and that no additional
changes were currently necessary.
Fall-Out Benefits -- The directors considered whether the Fund would generate
any fall-out benefits to BlackRock Advisors. Fall-out benefits are indirect
profits from other activities that accrue to the adviser or its affiliates
solely because of the existence of the Fund. In evaluating the fall-out benefits
to be received by BlackRock Advisors under the BlackRock Investment Advisory
Agreement, the directors considered whether BlackRock Advisors would experience
such benefits to the same extent that the Previous Investment Adviser was
experiencing such benefits under the Previous Investment Advisory Agreement.
Based on their review of the materials provided, including materials received in
connection with their most recent approval of the continuance of the Previous
Investment Advisory Agreement, and their discussions with management of the
Previous Investment Adviser and BlackRock, the directors determined that
BlackRock Advisors' fall out benefits could include increased ability for
BlackRock to distribute shares of its funds and other investment products. The
directors noted that any such benefits were difficult to quantify with certainty
at this time, and indicated that they would continue to evaluate them going
forward.
Investment Performance -- The directors considered investment performance for
the Fund. The directors compared the Fund's performance -- both including and
excluding the effects of fees and expenses -- to the performance of a comparable
group of funds, and the performance of a relevant index or combination of
indexes. The comparative information received from Lipper showed Fund
performance at various levels within the range of performance of comparable
funds over different time periods. The directors believed the Fund's performance
was satisfactory. Also, the directors took into account the investment
performance of funds advised by BlackRock Advisors. The Board considered
comparative information from Lipper which showed that the performance of
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 25
Disclosure of New Investment Advisory Agreement (concluded)
the funds advised by BlackRock Advisors was within the range of performance of
comparable funds over different time periods. The Board also noted that,
following the close of the Transaction, BlackRock Advisors intended to implement
steps to seek to improve the investment performance of the Fund, including
changes in the portfolio management personnel. The Board noted BlackRock's
considerable investment management experience and capabilities, but was unable
to predict what effect, if any, consummation of the Transaction would have on
the future performance of the Fund.
Conclusion -- After the independent directors of the Fund deliberated in
executive session, the entire Board, including the independent directors,
approved the BlackRock Investment Advisory Agreement, concluding that the
advisory fee rate was reasonable in relation to the services provided and that
the BlackRock Investment Advisory Agreement was in the best interests of the
shareholders. In approving the BlackRock Investment Advisory Agreement, the
Board noted that it anticipated reviewing the continuance of the agreement in
advance of the expiration of the initial two-year period.
New BlackRock Sub-Advisory Agreement -- Matters Considered by the Board
At an in-person meeting held on August 22-23, 2006, the Board of Directors,
including the independent directors, discussed and approved the sub-advisory
agreement (the "BlackRock Sub-Advisory Agreement") between BlackRock Advisors
and its affiliate, BlackRock Financial Management, Inc. (the "Sub-Adviser"). The
BlackRock Sub-Advisory Agreement became effective on September 29, 2006, at the
same time the BlackRock Investment Advisory Agreement became effective.
Pursuant to the BlackRock Sub-Advisory Agreement, the Sub-Adviser receives a
monthly fee from BlackRock Advisors equal to 59% of the advisory fee received by
BlackRock Advisors from the Fund. BlackRock Advisors pays the Sub-Adviser out of
its own resources, and there is no increase in Fund expenses as a result of the
BlackRock Sub-Advisory Agreement.
In approving the BlackRock Sub-Advisory Agreement at the August in-person
meeting, the Board reviewed its considerations in connection with its approval
of the BlackRock Investment Advisory Agreement in May 2006. The Board relied on
the same information and considered the same factors as those discussed above in
connection with the approval of the BlackRock Investment Advisory Agreement, and
came to the same conclusions. In reviewing the sub-advisory fee rate provided in
the BlackRock Sub-Advisory Agreement, the Board noted the fact that both
BlackRock Advisors and the Sub-Adviser have significant responsibilities under
their respective advisory agreements. BlackRock Advisors remains responsible for
oversight of the Fund's operations and administration, and the Sub-Adviser
provides advisory services to the Fund and is responsible for the day-to-day
management of the Fund's portfolio under the BlackRock Sub-Advisory Agreement.
The Board also took into account the fact that there is no increase in total
advisory fees paid by the Fund as a result of the BlackRock Sub-Advisory
Agreement. Under all of the circumstances, the Board concluded that it was a
reasonable allocation of fees for the Sub-Adviser to receive 59% of the advisory
fee paid by the Fund to BlackRock Advisors.
After the independent directors deliberated in executive session, the entire
Board, including the independent directors, approved the BlackRock Sub-Advisory
Agreement, concluding that the sub-advisory fee was reasonable in relation to
the services provided and that the BlackRock Sub-Advisory Agreement was in the
best interests of shareholders.
26 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Automatic Dividend Reinvestment Plan
How the Plan Works -- The Fund offers a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by the Fund are
automatically reinvested in additional shares of Common Stock of the Fund. The
Plan is administered on behalf of the shareholders by Computershare Trust
Company, N.A. (the "Plan Agent"). Under the Plan, whenever the Fund declares a
dividend, participants in the Plan will receive the equivalent in shares of
Common Stock of the Fund. The Plan Agent will acquire the shares for the
participant's account either (i) through receipt of additional unissued but
authorized shares of the Fund ("newly issued shares") or (ii) by purchase of
outstanding shares of Common Stock on the open market on the New York Stock
Exchange or elsewhere. If, on the dividend payment date, the Fund's net asset
value per share is equal to or less than the market price per share plus
estimated brokerage commissions (a condition often referred to as a "market
premium"), the Plan Agent will invest the dividend amount in newly issued
shares. If the Fund's net asset value per share is greater than the market price
per share (a condition often referred to as a "market discount"), the Plan Agent
will invest the dividend amount by purchasing on the open market additional
shares. If the Plan Agent is unable to invest the full dividend amount in open
market purchases, or if the market discount shifts to a market premium during
the purchase period, the Plan Agent will invest any uninvested portion in newly
issued shares. The shares acquired are credited to each shareholder's account.
The amount credited is determined by dividing the dollar amount of the dividend
by either (i) when the shares are newly issued, the net asset value per share on
the date the shares are issued or (ii) when shares are purchased in the open
market, the average purchase price per share.
Participation in the Plan -- Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
shares of Common Stock of the Fund unless the shareholder specifically elects
not to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish to
participate in the Plan must advise the Plan Agent in writing (at the address
set forth below) that they elect not to participate in the Plan. Participation
in the Plan is completely voluntary and may be terminated or resumed at any time
without penalty by writing to the Plan Agent.
Benefits of the Plan -- The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Fund. The Plan
promotes a long-term strategy of investing at a lower cost. All shares acquired
pursuant to the Plan receive voting rights. In addition, if the market price
plus commissions of the Fund's shares is above the net asset value, participants
in the Plan will receive shares of the Fund for less than they could otherwise
purchase them and with a cash value greater than the value of any cash
distribution they would have received. However, there may not be enough shares
available in the market to make distributions in shares at prices below the net
asset value. Also, since the Fund does not redeem shares, the price on resale
may be more or less than the net asset value.
Plan Fees -- There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agent's service fees for handling the reinvestment of
distributions are paid for by the Fund. However, brokerage commissions may be
incurred when the Fund purchases shares on the open market and shareholders will
pay a pro rata share of any such commissions.
Tax Implications -- The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income tax that may
be payable (or required to be withheld) on such dividends. Therefore, income and
capital gains may still be realized even though shareholders do not receive
cash. The value of shares acquired pursuant to the Plan will generally be
excluded from gross income to the extent that the cash amount reinvested would
be excluded from gross income. If, when the Fund's shares are trading at a
market premium, the Fund issues shares pursuant to the Plan that have a greater
fair market value than the amount of cash reinvested, it is possible that all or
a portion of the discount from the market value (which may not exceed 5% of the
fair market value of the Fund's shares) could be viewed as a taxable
distribution. If the discount is viewed as a taxable distribution, it is also
possible that the taxable character of this discount would be allocable to all
the shareholders, including shareholders who do not participate in the Plan.
Thus, shareholders who do not participate in the Plan might be required to
report as ordinary income a portion of their distributions equal to their
allocable share of the discount.
Contact Information -- All correspondence concerning the Plan, including any
questions about the Plan, should be directed to the Plan Agent at Computershare
Trust Company, N.A., P.O. Box 43010, Providence, RI 02940-3010, Telephone:
800-426-5523.
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 27
Officers and Directors
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Interested Director
------------------------------------------------------------------------------------------------------------------------------------
Robert C. P.O. Box 9011 President 2005 to Vice Chairman and Director of BlackRock, and Global 129 Funds None
Doll, Jr.* Princeton, NJ and present Chief Investment Officer for Equities, Chairman of 174 Portfolios
08543-9011 Director the BlackRock Private Client Operating Committee,
Age: 52 and member of the BlackRock Executive Committee
since 2006; President of the Funds advised by
Merrill Lynch Investment Managers ("MLIM") and its
affiliates ("MLIM/FAM-advised funds") from 2005 to
2006 and Chief Investment Officer thereof from 2001
to 2006; President of MLIM and Fund Asset
Management, L.P. ("FAM") from 2001 to 2006; Co-Head
(Americas Region) thereof from 2000 to 2001 and
Senior Vice President from 1999 to 2001; President
and Director of Princeton Services, Inc. ("Princeton
Services") since 2001; President of Princeton
Administrators, L.P. ("Princeton Administrators")
from 2001 to 2006; Chief Investment Officer of
OppenheimerFunds, Inc. in 1999 and Executive Vice
President thereof from 1991 to 1999.
------------------------------------------------------------------------------------------------------------------------
* Mr. Doll is a director, trustee or member of an advisory board of certain other investment companies for which
BlackRock acts as investment adviser. Mr. Doll is an "interested person," as described in the Investment Company
Act, of the Fund based on his current and former positions with BlackRock, Inc. and its affiliates. Directors
serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. As Fund
President, Mr. Doll serves at the pleasure of the Board of Directors.
====================================================================================================================================
Independent Directors*
------------------------------------------------------------------------------------------------------------------------------------
James H. P.O. Box 9095 Director 2003 to Director, The China Business Group, Inc. since 1996 39 Funds None
Bodurtha** Princeton, NJ present and Executive Vice President thereof from 1996 to 59 Portfolios
08543-9095 2003; Chairman of the Board, Berkshire Holding
Age: 62 Corporation since 1980; Partner, Squire, Sanders &
Dempsey from 1980 to 1993.
------------------------------------------------------------------------------------------------------------------------------------
Kenneth A. P.O. Box 9095 Director 2005 to Professor, Harvard University since 1992; Professor, 39 Funds None
Froot Princeton, NJ present Massachusetts Institute of Technology from 1986 to 59 Portfolios
08543-9095 1992.
Age: 49
------------------------------------------------------------------------------------------------------------------------------------
Joe P.O. Box 9095 Director 2003 to Member of the Committee of Investment of Employee 39 Funds Kimco Realty
Grills** Princeton, NJ present Benefit Assets of the Association of Financial 59 Portfolios Corporation
08543-9095 Professionals ("CIEBA") since 1986; Member of
Age: 71 CIEBA's Executive Committee since 1988 and its
Chairman from 1991 to 1992; Assistant Treasurer of
International Business Machines Corporation ("IBM")
and Chief Investment Officer of IBM Retirement Funds
from 1986 to 1993; Member of the Investment Advisory
Committee of the State of New York Common Retirement
Fund since 1989; Member of the Investment Advisory
Committee of the Howard Hughes Medical Institute
from 1997 to 2000; Director, Duke University
Management Company from 1992 to 2004, Vice Chairman
thereof from 1998 to 2004, and Director Emeritus
thereof since 2004; Director, LaSalle Street Fund
from 1995 to 2001; Director, Kimco Realty
Corporation since 1997; Member of the Investment
Advisory Committee of the Virginia Retirement System
since 1998, Vice Chairman thereof from 2002 to 2005,
and Chairman thereof since 2005; Director,
Montpelier Foundation since 1998 and its Vice
Chairman since 2000; Member of the Investment
Committee of the Woodberry Forest School since 2000;
Member of the Investment Committee of the National
Trust for Historic Preservation since 2000.
28 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Officers and Directors (continued)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Independent Directors* (concluded)
------------------------------------------------------------------------------------------------------------------------------------
Herbert I. P.O. Box 9095 Director 2003 to Chairman of the Board of Directors of Vigilant 39 Funds None
London Princeton, NJ present Research, Inc. since 2006; Member of the Board of 59 Portfolios
08543-9095 Directors for Grantham University since 2006;
Age: 67 Director of AIMS since 2006; Director of Reflex
Security since 2006; Director of InnoCentive, Inc.
since 2006; Director of Cerego, LLC since 2005;
Professor Emeritus, New York University since 2005;
John M. Olin Professor of Humanities, New York
University from 1993 to 2005; and Professor thereof
from 1980 to 2005; President, Hudson Institute since
1997 and Trustee thereof since 1980; Dean, Gallatin
Division of New York University from 1976 to 1993;
Distinguished Fellow, Herman Kahn Chair, Hudson
Institute from 1984 to 1985; Director, Damon Corp.
from 1991 to 1995; Overseer, Center for Naval
Analyses from 1983 to 1993.
------------------------------------------------------------------------------------------------------------------------------------
Roberta P.O. Box 9095 Director 2003 to Shareholder, Modrall, Sperling, Roehl, Harris & 39 Funds None
Cooper Princeton, NJ present Sisk, P.A. since 1993; President, American Bar 59 Portfolios
Ramo 08543-9095 Association from 1995 to 1996 and Member of the
Age: 64 Board of Governors thereof from 1994 to 1997;
Shareholder, Poole, Kelly and Ramo, Attorneys at Law
P.C. from 1977 to 1993; Director of ECMC Group
(service provider to students, schools and since
2001; Director, United New Mexico Bank (now Wells
Fargo) from 1983 to 1988; Director, First National
Bank of New Mexico (now Wells Fargo) from 1975 to
1976; Vice President, American Law Institute since
2004.
------------------------------------------------------------------------------------------------------------------------------------
Robert S. P.O. Box 9095 Director 2003 to Principal of STI Management (investment adviser) 39 Funds None
Salomon, Princeton, NJ present from 1994 to 2005; Chairman and CEO of Salomon 59 Portfolios
Jr. 08543-9095 Brothers Asset Management Inc. from 1992 to 1995;
Age: 69 Chairman of Salomon Brothers Equity Mutual Funds
from 1992 to 1995; regular columnist with Forbes
Magazine from 1992 to 2002; Director of Stock
Research and U.S. Equity Strategist at Salomon
Brothers Inc. from 1975 to 1991; Trustee, Commonfund
from 1980 to 2001.
------------------------------------------------------------------------------------------------------------------------
* Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.
** Co-Chairman of the Board of Directors and the Audit Committee.
------------------------------------------------------------------------------------------------------------------------------------
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 29
Officers and Directors (concluded)
Position(s) Length of
Held with Time
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 2003 to Managing Director of BlackRock since 2006; Managing Director of MLIM and FAM from
Burke Princeton, NJ President present 2005 to 2006 and Treasurer thereof from 1999 to 2006; First Vice President of MLIM
08543-9011 and and FAM from 1997 to 2005; Senior Vice President and Treasurer of Princeton
Age: 46 Treasurer Services from 1999 to 2006 and Director from 2004 to 2006; Vice President of FAM
Distributors, Inc. ("FAMD") from 1999 to 2006 and Director from 2004 to 2006; Vice
President of MLIM and FAM from 1990 to 1997; Director of Taxation of MLIM from 1990
to 2001; Vice President, Treasurer and Secretary of the IQ Funds from 2004 to 2006.
------------------------------------------------------------------------------------------------------------------------------------
Elizabeth P.O. Box 9011 Vice 2003 to Managing Director of BlackRock since 2006; Managing Director (Global Fixed Income)
M. Princeton, NJ President present of MLIM from January 2006 to September 2006; Director of MLIM from 2001 to 2005;
Phillips 08543-9011 Vice President of MLIM from 1994 to 2001.
Age: 56
------------------------------------------------------------------------------------------------------------------------------------
Jeffrey P.O. Box 9011 Fund Chief 2004 to Managing Director of BlackRock and Fund Chief Compliance Officer since 2006; Chief
Hiller Princeton, NJ Compliance present Compliance Officer of the MLIM/FAM-advised funds and First Vice President and Chief
08543-9011 Officer Compliance Officer of MLIM (Americas Region) from 2004 to 2006; Chief Compliance
Age: 55 Officer of the IQ Funds since 2004; Global Director of Compliance at Morgan Stanley
Investment Management from 2002 to 2004; Managing Director and Global Director of
Compliance at Citigroup Asset Management from 2000 to 2002; Chief Compliance
Officer at Soros Fund Management in 2000; Chief Compliance Officer at Prudential
Financial from 1995 to 2000; Senior Counsel in the Securities and Exchange
Commission's Division of Enforcement in Washington, D.C. from 1990 to 1995.
------------------------------------------------------------------------------------------------------------------------------------
Alice A. P.O. Box 9011 Secretary 2004 to Director of BlackRock since 2006; Director (Legal Advisory) of MLIM from 2002 to
Pellegrino Princeton, NJ present 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with MLIM from
08543-9011 1997 to 2006; Secretary of MLIM, FAM, FAMD and Princeton Services from 2004 to
Age: 46 2006.
------------------------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Directors.
------------------------------------------------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Computershare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
NYSE Symbol
HYT
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial adviser. Please note that not all investment
advisers, banks or brokerages may offer this service.
30 BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006
Proxy Results
During the six-month period ended August 31, 2006, BlackRock Corporate High
Yield Fund VI, Inc.'s shareholders voted on the following proposals. Proposal 1
was approved at a shareholders' meeting on April 27, 2006. Proposals 2 and 3
were approved at a shareholders' meeting on August 15, 2006. A description of
the proposals and number of shares voted are as follows:
---------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
---------------------------------------------------------------------------------------------------
1. To elect the Fund's Board Robert C. Doll, Jr. 33,025,157 653,976
of Directors: James H. Bodurtha 33,024,757 654,376
Kenneth A. Froot 33,025,724 653,409
Joe Grills 33,014,917 664,216
Herbert I. London 33,019,966 659,167
Roberta Cooper Ramo 33,025,833 653,300
Robert S. Salomon, Jr. 33,014,566 664,567
---------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
---------------------------------------------------------------------------------------------------
2. To approve a new investment advisory agreement. 17,208,446 479,864 673,954
---------------------------------------------------------------------------------------------------
3. To approve a contingent subadvisory agreement. 17,202,998 469,737 689,529
---------------------------------------------------------------------------------------------------
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their nonpublic personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic
personal information about its Clients, except as permitted by law or as is
necessary to service Client accounts. These nonaffiliated third parties are
required to protect the confidentiality and security of this information and to
use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to nonpublic
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the nonpublic
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
BLACKROCK CORPORATE HIGH YIELD FUND VI, INC. AUGUST 31, 2006 31
BlackRock Corporate High Yield Fund VI, Inc. seeks to provide shareholders with
current income by investing primarily in a diversified portfolio of fixed income
securities that are rated in the lower rating categories of the established
rating services (Ba or lower by Moody's Investors Service, Inc. or BB or lower
by Standard & Poor's Corporation) or are unrated securities of comparable
quality.
This report, including the financial information herein, is transmitted to
shareholders of BlackRock Corporate High Yield Fund VI, Inc. for their
information. It is not a prospectus. The Fund has leveraged its Common Stock to
provide Common Stock shareholders with a potentially higher rate of return.
Leverage creates risk for Common Stock shareholders, including the likelihood of
greater volatility of net asset value and market price of Common Stock shares,
and the risk that fluctuations in short-term interest rates may reduce the
Common Stock's yield. Past performance results shown in this report should not
be considered a representation of future performance. Statements and other
information herein are as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web site
at http://www.sec.gov. Information about how the Fund voted proxies relating to
securities held in the Fund's portfolio during the most recent 12-month period
ended June 30 is available (1) at www.blackrock.com and (2) on the Securities
and Exchange Commission's Web site at http://www.sec.gov.
BlackRock Corporate High Yield Fund VI, Inc.
Box 9011
Princeton, NJ 08543-9011
BLACKROCK
#COYVI-8/06
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of the
end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial officer
and principal accounting officer, or persons performing similar
functions. A copy of the code of ethics is available without charge at
www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of directors
has determined that (i) the registrant has the following audit
committee financial experts serving on its audit committee and (ii)
each audit committee financial expert is independent: (1) Joe Grills,
(2) Robert S. Salomon, Jr., and (3) Stephen B. Swensrud (retired as of
December 31, 2005).
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending August 31, 2006 - $38,500
Fiscal Year Ending August 31, 2005 - $37,000
(b) Audit-Related Fees - Fiscal Year Ending August 31, 2006 - $8,000
Fiscal Year Ending August 31, 2005 - $0
The nature of the services include assurance and related services
reasonably related to the performance of the audit of financial
statements not included in Audit Fees.
(c) Tax Fees - Fiscal Year Ending August 31, 2006 - $6,000
Fiscal Year Ending August 31, 2005 - $7,900
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending August 31, 2006 - $0
Fiscal Year Ending August 31, 2005 - $0
(e)(1) The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the
registrant's affiliated service providers that relate directly to the
operations and the financial reporting of the registrant. Certain of
these non-audit services that the Committee believes are a) consistent
with the SEC's auditor independence rules and b) routine and recurring
services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a
specific case-by-case basis ("general pre-approval"). However, such
services will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any proposed
services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject
to general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending August 31, 2006 - $3,098,500
Fiscal Year Ending August 31, 2005 - $7,377,027
(h) The registrant's audit committee has considered and determined that
the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,739,500, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals are
members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
James H. Bodurtha
Kenneth A. Froot
Joe Grills
Herbert I. London
Roberta Cooper Ramo
Robert S. Salomon, Jr.
Stephen B. Swensrud (retired as of December 31, 2005)
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -
Proxy Voting Policies and Procedures
Each Fund's Board of Directors/Trustees has delegated to Merrill Lynch
Investment Managers, L.P. and/or Fund Asset Management, L.P. (the
"Investment Adviser") authority to vote all proxies relating to the
Fund's portfolio securities. The Investment Adviser has adopted
policies and procedures ("Proxy Voting Procedures") with respect to the
voting of proxies related to the portfolio securities held in the
account of one or more of its clients, including a Fund. Pursuant to
these Proxy Voting Procedures, the Investment Adviser's primary
objective when voting proxies is to make proxy voting decisions solely
in the best interests of each Fund and its shareholders, and to act in
a manner that the Investment Adviser believes is most likely to enhance
the economic value of the securities held by the Fund. The Proxy Voting
Procedures are designed to ensure that the Investment Adviser considers
the interests of its clients, including the Funds, and not the
interests of the Investment Adviser, when voting proxies and that real
(or perceived) material conflicts that may arise between the Investment
Adviser's interest and those of the Investment Adviser's clients are
properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Investment
Adviser has formed a Proxy Voting Committee (the "Committee"). The
Committee is comprised of the Investment Adviser's Chief Investment
Officer (the "CIO"), one or more other senior investment professionals
appointed by the CIO, portfolio managers and investment analysts
appointed by the CIO and any other personnel the CIO deems appropriate.
The Committee will also include two non-voting representatives from the
Investment Adviser's Legal department appointed by the Investment
Adviser's General Counsel. The Committee's membership shall be limited
to full-time employees of the Investment Adviser. No person with any
investment banking, trading, retail brokerage or research
responsibilities for the Investment Adviser's affiliates may serve as a
member of the Committee or participate in its decision making (except
to the extent such person is asked by the Committee to present
information to the Committee, on the same basis as other interested
knowledgeable parties not affiliated with the Investment Adviser might
be asked to do so). The Committee determines how to vote the proxies of
all clients, including a Fund, that have delegated proxy voting
authority to the Investment Adviser and seeks to ensure that all votes
are consistent with the best interests of those clients and are free
from unwarranted and inappropriate influences. The Committee
establishes general proxy voting policies for the Investment Adviser
and is responsible for determining how those policies are applied to
specific proxy votes, in light of each issuer's unique structure,
management, strategic options and, in certain circumstances, probable
economic and other anticipated consequences of alternate actions. In so
doing, the Committee may determine to vote a particular proxy in a
manner contrary to its generally stated policies. In addition, the
Committee will be responsible for ensuring that all reporting and
recordkeeping requirements related to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and requires a
case-by-case determination. In such cases, the Committee may elect not
to adopt a specific voting policy applicable to that issue. The
Investment Adviser believes that certain proxy voting issues require
investment analysis - such as approval of mergers and other significant
corporate transactions - akin to investment decisions, and are,
therefore, not suitable for general guidelines. The Committee may elect
to adopt a common position for the Investment Adviser on certain proxy
votes that are akin to investment decisions, or determine to permit the
portfolio manager to make individual decisions on how best to maximize
economic value for a Fund (similar to normal buy/sell investment
decisions made by such portfolio managers). While it is expected that
the Investment Adviser will generally seek to vote proxies over which
the Investment Adviser exercises voting authority in a uniform manner
for all the Investment Adviser's clients, the Committee, in conjunction
with a Fund's portfolio manager, may determine that the Fund's specific
circumstances require that its proxies be voted differently.
To assist the Investment Adviser in voting proxies, the Committee has
retained Institutional Shareholder Services ("ISS"). ISS is an
independent adviser that specializes in providing a variety of
fiduciary-level proxy-related services to institutional investment
managers, plan sponsors, custodians, consultants, and other
institutional investors. The services provided to the Investment
Adviser by ISS include in-depth research, voting recommendations
(although the Investment Adviser is not obligated to follow such
recommendations), vote execution, and recordkeeping. ISS will also
assist the Fund in fulfilling its reporting and recordkeeping
obligations under the Investment Company Act.
The Investment Adviser's Proxy Voting Procedures also address special
circumstances that can arise in connection with proxy voting. For
instance, under the Proxy Voting Procedures, the Investment Adviser
generally will not seek to vote proxies related to portfolio securities
that are on loan, although it may do so under certain circumstances. In
addition, the Investment Adviser will vote proxies related to
securities of foreign issuers only on a best efforts basis and may
elect not to vote at all in certain countries where the Committee
determines that the costs associated with voting generally outweigh the
benefits. The Committee may at any time override these general policies
if it determines that such action is in the best interests of a Fund.
From time to time, the Investment Adviser may be required to vote proxies in
respect of an issuer where an affiliate of the Investment Adviser (each, an
"Affiliate"), or a money management or other client of the Investment Adviser
(each, a "Client") is involved. The Proxy Voting Procedures and the Investment
Adviser's adherence to those procedures are designed to address such conflicts
of interest. The Committee intends to strictly adhere to the Proxy Voting
Procedures in all proxy matters, including matters involving Affiliates and
Clients. If, however, an issue representing a non-routine matter that is
material to an Affiliate or a widely known Client is involved such that the
Committee does not reasonably believe it is able to follow its guidelines (or if
the particular proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes of ensuring
that an independent determination is reached, retain an independent fiduciary to
advise the Committee on how to vote or to cast votes on behalf of the Investment
Adviser's clients.
In the event that the Committee determines not to retain an independent
fiduciary, or it does not follow the advice of such an independent
fiduciary, the powers of the Committee shall pass to a subcommittee,
appointed by the CIO (with advice from the Secretary of the Committee),
consisting solely of Committee members selected by the CIO. The CIO
shall appoint to the subcommittee, where appropriate, only persons
whose job responsibilities do not include contact with the Client and
whose job evaluations would not be affected by the Investment Adviser's
relationship with the Client (or failure to retain such relationship).
The subcommittee shall determine whether and how to vote all proxies on
behalf of the Investment Adviser's clients or, if the proxy matter is,
in their judgment, akin to an investment decision, to defer to the
applicable portfolio managers, provided that, if the subcommittee
determines to alter the Investment Adviser's normal voting guidelines
or, on matters where the Investment Adviser's policy is case-by-case,
does not follow the voting recommendation of any proxy voting service
or other independent fiduciary that may be retained to provide research
or advice to the Investment Adviser on that matter, no proxies relating
to the Client may be voted unless the Secretary, or in the Secretary's
absence, the Assistant Secretary of the Committee concurs that the
subcommittee's determination is consistent with the Investment
Adviser's fiduciary duties
In addition to the general principles outlined above, the Investment
Adviser has adopted voting guidelines with respect to certain recurring
proxy issues that are not expected to involve unusual circumstances.
These policies are guidelines only, and the Investment Adviser may
elect to vote differently from the recommendation set forth in a voting
guideline if the Committee determines that it is in a Fund's best
interest to do so. In addition, the guidelines may be reviewed at any
time upon the request of a Committee member and may be amended or
deleted upon the vote of a majority of Committee members present at a
Committee meeting at which there is a quorum.
The Investment Adviser has adopted specific voting guidelines with
respect to the following proxy issues:
o Proposals related to the composition of the Board of Directors of issuers
other than investment companies. As a general matter, the Committee
believes that a company's Board of Directors (rather than shareholders) is
most likely to have access to important, nonpublic information regarding a
company's business and prospects, and is therefore best-positioned to set
corporate policy and oversee management. The Committee, therefore,
believes that the foundation of good corporate governance is the election
of qualified, independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of the
corporation in a manner that will seek to maximize shareholder value over
time. In individual cases, the Committee may look at a nominee's history
of representing shareholder interests as a director of other companies or
other factors, to the extent the Committee deems relevant.
o Proposals related to the selection of an issuer's independent auditors. As
a general matter, the Committee believes that corporate auditors have a
responsibility to represent the interests of shareholders and provide an
independent view on the propriety of financial reporting decisions of
corporate management. While the Committee will generally defer to a
corporation's choice of auditor, in individual cases, the Committee may
look at an auditors' history of representing shareholder interests as
auditor of other companies, to the extent the Committee deems relevant.
o Proposals related to management compensation and employee benefits. As a
general matter, the Committee favors disclosure of an issuer's
compensation and benefit policies and opposes excessive compensation, but
believes that compensation matters are normally best determined by an
issuer's board of directors, rather than shareholders. Proposals to
"micro-manage" an issuer's compensation practices or to set arbitrary
restrictions on compensation or benefits will, therefore, generally not be
supported.
o Proposals related to requests, principally from management, for approval
of amendments that would alter an issuer's capital structure. As a general
matter, the Committee will support requests that enhance the rights of
common shareholders and oppose requests that appear to be unreasonably
dilutive.
o Proposals related to requests for approval of amendments to an issuer's
charter or by-laws. As a general matter, the Committee opposes poison pill
provisions.
o Routine proposals related to requests regarding the formalities of
corporate meetings.
o Proposals related to proxy issues associated solely with holdings of
investment company shares. As with other types of companies, the Committee
believes that a fund's Board of Directors (rather than its shareholders)
is best-positioned to set fund policy and oversee management. However, the
Committee opposes granting Boards of Directors authority over certain
matters, such as changes to a fund's investment objective, that the
Investment Company Act envisions will be approved directly by
shareholders.
o Proposals related to limiting corporate conduct in some manner that
relates to the shareholder's environmental or social concerns. The
Committee generally believes that annual shareholder meetings are
inappropriate forums for discussion of larger social issues, and opposes
shareholder resolutions "micromanaging" corporate conduct or requesting
release of information that would not help a shareholder evaluate an
investment in the corporation as an economic matter. While the Committee
is generally supportive of proposals to require corporate disclosure of
matters that seem relevant and material to the economic interests of
shareholders, the Committee is generally not supportive of proposals to
require disclosure of corporate matters for other purposes.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies - as
of October 2, 2006.
(a)(1) The Fund is managed by a team of investment professionals the
lead members of which are Scott Amero, Managing Director at BlackRock,
and Jeffrey Gary, Managing Director at BlackRock. This team has managed
the Fund's portfolio since 2006. Messrs. Amero and Gary are jointly and
primarily responsible for the day-to-day management of the Fund's
portfolio and the selection of its investments.
Scott Amero is co-head of BlackRock's fixed income portfolio management
team. He is a member of the Management Committee and the Investment
Strategy Group. Mr. Amero is a senior strategist and portfolio manager
with responsibility for overseeing all fixed income sector strategy and
the overall management of client portfolios. He is also the head of
global credit research. He is director of Anthracite Capital, Inc.,
BlackRock's publicly-traded real estate investment trust. Mr. Amero has
been with BlackRock since 1990.
Mr. Gary has been with BlackRock since 2003. He is head of BlackRock's
high yield team and a member of the Investment Strategy Group. Prior to
joining BlackRock in 2003, Mr. Gary was a Managing Director of and
portfolio manager with AIG (American General) Investment Group.
(a)(2) As of October 2, 2006:
(iii) Number of Other Accounts and
(ii) Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
Other Other
Registered Other Pooled Registered Other Pooled
(i) Name of Investment Investment Other Investment Investment Other
Portfolio Manager Companies Vehicles Accounts Companies Vehicles Accounts
---------------- ----------------
Scott Amero 27 35 298 0 7 23
$ 15,400,844,656 $ 8,298,434,418 $104,363,773,196 $ 0 $ 1,674,785,985 $ 6,547,210,680
Jeffrey Gary 18 6 30 0 5 9
$ 5,717,660,657 $ 5,542,301,819 $ 4,458,704,011 $ 0 $ 1,340,538,760 $ 1,666,683,896
(iv) Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address the
allocation of investment opportunities, execution of portfolio
transactions, personal trading by employees and other potential
conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have performance
or higher fees paid to BlackRock, or in which portfolio managers have a
personal interest in the receipt of such fees), which may be the same
as or different from those made to the Fund. In addition, BlackRock,
its affiliates and any officer, director, stockholder or employee may
or may not have an interest in the securities whose purchase and sale
BlackRock recommends to the Fund. BlackRock, or any of its affiliates,
or any officer, director, stockholder, employee or any member of their
families may take different actions than those recommended to the Fund
by BlackRock with respect to the same securities. Moreover, BlackRock
may refrain from rendering any advice or services concerning securities
of companies of which any of BlackRock's (or its affiliates') officers,
directors or employees are directors or officers, or companies as to
which BlackRock or any of its affiliates or the officers, directors and
employees of any of them has any substantial economic interest or
possesses material non-public information. Each portfolio manager also
may manage accounts whose investment strategies may at times be opposed
to the strategy utilized for the Fund. In this connection, it should be
noted that certain portfolio managers currently manage certain accounts
that are subject to performance fees. In addition, certain portfolio
managers assist in managing certain hedge funds and may be entitled to
receive a portion of any incentive fees earned on such funds and a
portion of such incentive fees may be voluntarily or involuntarily
deferred. Additional portfolio managers may in the future manage other
such accounts or funds and may be entitled to receive incentive fees.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and
must treat each client fairly. When BlackRock purchases or sells
securities for more than one account, the trades must be allocated in a
manner consistent with its fiduciary duties. BlackRock attempts to
allocate investments in a fair and equitable manner among client
accounts, with no account receiving preferential treatment. To this
end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve reasonable
efficiency in client transactions and provide BlackRock with sufficient
flexibility to allocate investments in a manner that is consistent with
the particular investment discipline and client base.
(a)(3) As of October 2, 2006:
Portfolio Manager Compensation
BlackRock's financial arrangements with its portfolio managers, its
competitive compensation and its career path emphasis at all levels reflect the
value senior management places on key resources. Compensation may include a
variety of components and may vary from year to year based on a number of
factors. The principal components of compensation include a base salary, a
discretionary bonus, participation in various benefits programs and one or more
of the incentive compensation programs established by BlackRock such as its
Long-Term Retention and Incentive Plan and Restricted Stock Program.
Base compensation. Generally, portfolio managers receive base compensation based
on their seniority and/or their position with the firm.
Discretionary compensation. In addition to base compensation, portfolio managers
may receive discretionary compensation, which can be a substantial portion of
total compensation. Discretionary compensation can include a discretionary cash
bonus as well as one or more of the following:
Long-Term Retention and Incentive Plan (LTIP) --The LTIP is a long-term
incentive plan that seeks to reward certain key employees. The plan provides for
the grant of awards that are expressed as an amount of cash that, if properly
vested and subject to the attainment of certain performance goals, will be
settled in cash and/or in BlackRock, Inc. common stock. Mr. Gary and Mr. Amero
have received awards under the LTIP.
Deferred Compensation Program --A portion of the compensation paid to each
portfolio manager may be voluntarily deferred by the portfolio manager into an
account that tracks the performance of certain of the firm's investment
products. Each portfolio manager is permitted to allocate his deferred amounts
among various options, including to certain of the firm's hedge funds and other
unregistered products. In addition, prior to 2005, a portion of the annual
compensation of certain senior managers, including Mr. Gary and Mr. Amero, was
mandatorily deferred in a similar manner for a number of years. Beginning in
2005, a portion of the annual compensation of certain senior managers, including
Mr. Gary and Mr. Amero, is paid in the form of BlackRock, Inc. restricted stock
units which vest ratably over a number of years.
Options and Restricted Stock Awards --While incentive stock options are
not currently being awarded to BlackRock employees, BlackRock, Inc. previously
granted stock options to key employees, including certain portfolio managers who
may still hold unexercised or unvested options. BlackRock, Inc. also has a
restricted stock award program designed to reward certain key employees as an
incentive to contribute to the long-term success of BlackRock. These awards vest
over a period of years. Mr. Amero has been granted stock options in prior years
and participates in BlackRock's restricted stock program.
Incentive Savings Plans --BlackRock has created a variety of incentive
savings plans in which BlackRock employees are eligible to participate,
including an Employee Stock Purchase Plan (ESPP) and a 401(k) plan. The 401(k)
plan may involve a company match of the employee's contribution of up to 6% of
the employee's salary. The company match is made using BlackRock, Inc. common
stock. The firm's 401(k) plan offers a range of investment options, including
registered investment companies managed by the firm. Each portfolio manager is
eligible to participate in these plans.
Annual incentive compensation for each portfolio manager is a function of
several components: the performance of BlackRock, Inc., the investment
performance of the portfolio manager's group within BlackRock, the investment
performance, including risk-adjusted returns and income generation, of the
firm's assets under management or supervision by that portfolio manager relative
to predetermined benchmarks, and the individual's teamwork and contribution to
the overall performance of these portfolios and BlackRock. Unlike many other
firms, portfolio managers at BlackRock compete against benchmarks rather than
each other. In most cases, including for the portfolio managers of the
Registrant, these benchmarks are the same as the benchmark or benchmarks against
which the investment performance, including risk-adjusted returns and income
generation, of the Registrant or other accounts are measured. A group of
BlackRock, Inc.'s officers determines the benchmarks against which to compare
the performance of funds and other accounts managed by each portfolio manager.
With respect to the Registrant, such benchmarks include the CSFB High Yield
Index and certain customized indices and fund industry peer groups.
The group of BlackRock, Inc.'s officers then makes a subjective
determination with respect to the portfolio manager's compensation based on the
performance of the funds and other accounts managed by each portfolio manager
relative to the various benchmarks. This determination may take into
consideration the fact that a benchmark may not perfectly correlate to the way
the Registrant or other accounts are managed, even if it is the benchmark that
is most appropriate for the Registrant or other accounts. For example, a
benchmark's return may be based on the total return of the securities comprising
the benchmark, but the Registrant or other account may be managed to maximize
income and not total return. Senior portfolio managers who perform additional
management functions within BlackRock may receive additional compensation for
serving in these other capacities.
(a)(4) Beneficial Ownership of Securities. As of October 2, 2006, Mr.
Amero nor Mr. Gary beneficially owns any stock issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - The registrant's
Nominating Committee will consider nominees to the Board recommended
by shareholders when a vacancy becomes available. Shareholders who
wish to recommend a nominee should send nominations which include
biographical information and sets forth the qualifications of the
proposed nominee to the registrant's Secretary. There have been no
material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Corporate High Yield Fund VI, Inc.
By: /s/ Robert C. Doll, Jr.
------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Corporate High Yield Fund VI, Inc.
Date: October 19, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Robert C. Doll, Jr.
------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Corporate High Yield Fund VI, Inc.
Date: October 19, 2006
By: /s/ Donald C. Burke
------------------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock Corporate High Yield Fund VI, Inc.
Date: October 19, 2006