UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-21566

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

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Floating Rate Income Trust, 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 10/31/2011

Date of reporting period: 10/31/2011

Item 1 – Report to Stockholders

 
 

October 31, 2011

Annual Report

} BlackRock Credit Allocation Income Trust I, Inc. (PSW)

} BlackRock Credit Allocation Income Trust II, Inc. (PSY)

} BlackRock Credit Allocation Income Trust III (BPP)

} BlackRock Credit Allocation Income Trust IV (BTZ)

} BlackRock Floating Rate Income Trust (BGT)

Not FDIC Insured • No Bank Guarantee • May Lose Value

 
 


Table of Contents

Page

Dear Shareholder 3
Annual Report:  
Fund Summaries 4
The Benefits and Risks of Leveraging 14
Derivative Financial Instruments 15
Financial Statements:  
Schedules of Investments 16
Statements of Assets and Liabilities 55
Statements of Operations 56
Statements of Changes in Net Assets 57
Statements of Cash Flows 60
Financial Highlights 61
Notes to Financial Statements 66
Report of Independent Registered Public Accounting Firm 78
Important Tax Information 78
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements 79
Automatic Dividend Reinvestment Plans 83
Officers and Directors 84
Additional Information 87

2ANNUAL REPORTOCTOBER 31, 2011
 

Dear Shareholder

One year ago, the global economy appeared to solidly be in recovery mode and investors were optimistic as the US Federal Reserve launched its second round of quantitative easing. Stock markets rallied despite ongoing sovereign debt problems in Europe and inflationary pressures looming over emerging markets. Fixed income markets, however, saw yields move sharply upward (pushing prices down), especially on the long end of the historically steep yield curve. While high yield bonds benefited from the risk rally, most fixed income sectors declined in the fourth quarter of 2010. The tax-exempt municipal market faced additional headwinds as it became evident that the Build America Bond program would not be extended and municipal finance troubles burgeoned.

Early 2011 saw spikes of volatility as political turmoil swept across the Middle East/North Africa region and prices of oil and other commodities soared. Natural disasters in Japan disrupted industrial supply chains and concerns mounted regarding US debt and deficit issues. Nevertheless, equities generally performed well early in the year as investors chose to focus on the continuing stream of strong corporate earnings and positive economic data. Credit markets were surprisingly resilient in this environment and yields regained relative stability in 2011. The tax-exempt market saw relief from its headwinds and steadily recovered from its fourth-quarter lows. Equities, commodities and high yield bonds outpaced higher-quality assets as investors increased their risk tolerance.

However, the environment changed dramatically in the middle of the second quarter. Markets dropped sharply in May when fears mounted over the possibility of Greece defaulting on its debt, rekindling fears about the broader sovereign debt crisis. Concurrently, economic data signaled that the recovery had slowed in the United States and other developed nations. Confidence was further shaken by the prolonged debt ceiling debate in Washington, DC. On August 5th, Standard & Poor’s downgraded the US government’s credit rating and turmoil erupted in financial markets around the world. Extraordinary levels of volatility persisted in the months that followed as Greece teetered on the brink of default. Financial problems intensified in Italy and Spain and both countries faced credit rating downgrades. Debt worries spread to the core European nations of France and Germany, and the entire euro-zone banking system came under intense pressure. Late in the summer, economic data out of the United States and Europe grew increasingly bleak while China and other emerging economies began to show signs of slowing growth. By the end of the third quarter, equity markets had fallen nearly 20% from their April peak while safe-haven assets such as US Treasuries, gold and the Swiss franc skyrocketed.

October brought enough positive economic data to assuage fears of a double-dip recession in the United States and corporate earnings continued to be strong. Additionally, European policymakers demonstrated an increased willingness to unite in their struggle to resolve the region’s debt and banking crisis. These encouraging developments brought many investors back from the sidelines and risk assets rallied through the month, albeit with large daily swings as investor reactions to news from Europe vacillated between faith and skepticism.

Overall, lower-risk investments including US Treasuries, municipal securities and investment grade credits posted gains for the 6- and 12-month periods ended October 31, 2011. Risk assets, including equities and high yield debt, broadly declined over the six months; however, US stocks and high yield bonds remained in positive territory on a 12-month basis. Continued low short-term interest rates kept yields on money market securities near their all-time lows. While markets remain volatile and uncertainties abound, BlackRock remains dedicated to finding opportunities and managing risk in this environment.

Sincerely,

Rob Kapito
President, BlackRock Advisors, LLC


“While markets remain volatile and uncertainties abound, BlackRock remains dedicated to finding opportunities and managing risk in this environment.”

Rob Kapito

President, BlackRock Advisors, LLC

Total Returns as of October 31, 2011

  6-month 12-month
US large cap equities (7.11 )% 8.09 %
(S&P 500® Index)        
US small cap equities (13.76 ) 6.71  
(Russell 2000® Index)        
International equities (14.90 ) (4.08 )
(MSCI Europe, Australasia,        
Far East Index)        
Emerging market (15.91 ) (7.72 )
equities (MSCI Emerging        
Markets Index)        
3-month Treasury 0.04   0.13  
bill (BofA Merrill Lynch        
3-Month Treasury        
Bill Index)        
US Treasury securities 12.11   7.79  
(BofA Merrill Lynch 10-        
Year US Treasury Index)        
US investment grade 4.98   5.00  
bonds (Barclays        
Capital US Aggregate        
Bond Index)        
Tax-exempt municipal 5.56   3.78  
bonds (Barclays Capital        
Municipal Bond Index)        
US high yield bonds (0.95 ) 5.16  
(Barclays Capital US        
Corporate High Yield 2%        
Issuer Capped Index)        

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


 THIS PAGE NOT PART OF YOUR FUND REPORT3
 


Fund Summary as of October 31, 2011 BlackRock Credit Allocation Income Trust I, Inc.

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

• For the 12 months ended October 31, 2011, the Fund returned 2.20% based on market price and 4.55% based on net asset value (“NAV”). For the same period, the closed-end Lipper Corporate Debt Funds (BBB-Rated) category posted an average return of 2.90% based on market price and 4.65% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. 

What factors influenced performance?

• The primary driver of the Fund’s positive performance was its duration positioning (management of interest rate sensitivity) as interest rates generally moved lower during the period. However, duration in the Fund was partially hedged using interest rate derivative instruments such as futures contracts, options and swaps. These hedges were put in place to limit expected volatility in interest rates and had a net negative contribution to performance. 
• The Fund’s allocation to high yield corporate credit benefited performance despite recent weakness in the sector, as higher carry yields (income generation) and improving fundamentals helped to offset price declines. Within investment grade corporate credit, security selection was focused on increasing the overall quality and liquidity of the Fund’s holdings, which contributed positively to returns. 
• Conversely, sector allocation within investment grade corporate credit had a negative impact on performance. The Fund held capital securities in the financials sector, which mostly underperformed other credit sectors as investors feared the sovereign debt crisis in Europe would ultimately have a negative impact on US-based financial companies. Capital securities were particularly hurt as they are lower in the capital structure and therefore tend to exhibit higher volatility during periods of risk aversion. 

Describe recent portfolio activity.

• During the 12-month period, the Fund increased its leveraged exposure to corporate credit in order to position itself to benefit from improving corporate fundamentals in an accommodative monetary policy environment. In the latter half of the period, the Fund reduced exposure to riskier credits as these names typically require significant economic growth to realize a boost in valuations. From an industry perspective, the Fund increased exposure to independent energy names. Within the wireless telecommunications services sector, the Fund increased its credit quality profile by selling names in high yield to purchase investment grade credits with better predictability of earnings. 

Describe portfolio positioning at period end.

• The Fund maintained diversified exposure across investment grade and high yield corporate credits. Portfolio holdings at period end reflected a bias toward higher-quality issues and a preference for more stable industries and companies that offer good cash flows, earnings and revenue visibility and attractive downside protection. The Fund’s corporate credit holdings reflect a bias toward industrials over financials and utilities. Within industrials, the Fund favored media cable and media non-cable names. 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. 

4ANNUAL REPORTOCTOBER 31, 2011
 

BlackRock Credit Allocation Income Trust I, Inc.

Fund Information

Symbol on New York Stock Exchange (“NYSE”) PSW
Initial Offering Date August 1, 2003
Yield on Closing Market Price as of October 31, 2011 ($9.25)1 7.72%
Current Monthly Distribution per Common Share2 $ 0.0595
Current Annualized Distribution per Common Share2 $ 0.7140
Leverage as of October 31, 20113 33%

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.  
The distribution rate is not constant and is subject to change. 
Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14. 

The table below summarizes the changes in the Fund’s market price and NAV per share:

  10/31/11 10/31/10 Change High Low
Market Price $  9.25 $  9.67 (4.34)% $  9.89 $8.52
Net Asset Value $10.52 $10.75 (2.14)% $10.90 $9.88

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

Portfolio Composition

  10/31/11 10/31/10
Corporate Bonds 82 % 69 %
Preferred Securities 15   16  
Asset Backed Securities 1    
Taxable Municipal Bonds 1   1  
US Treasury Obligations 1   14  

Credit Quality Allocations4

  10/31/11 10/31/10
AAA/Aaa5 1 % 14 %
AA/Aa 7   10  
A 28   23  
BBB/Baa 38   38  
BB/Ba 15   12  
B 8   1  
CCC/Caa 1    
Not Rated 2   2  

Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors Service (“Moody’s”) ratings. 
Includes US Treasury obligations that are deemed AAA by the investment advisor. 
ANNUAL REPORTOCTOBER 31, 20115
  


Fund Summary as of October 31, 2011 BlackRock Credit Allocation Income Trust II, Inc.

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

• For the 12 months ended October 31, 2011, the Fund returned 0.16% based on market price and 3.71% based on NAV. For the same period, the closed-end Lipper Corporate Debt Funds (BBB-Rated) category posted an average return of 2.90% based on market price and 4.65% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. 

What factors influenced performance?

• The primary driver of the Fund’s positive performance was its duration positioning (management of interest rate sensitivity) as interest rates generally moved lower during the period. However, duration in the Fund was partially hedged using interest rate derivative instruments such as futures contracts, options and swaps. These hedges were put into place to limit expected volatility in interest rates and had a net negative contribution to performance. 
• The Fund’s allocation to high yield corporate credit benefited performance despite recent weakness in the sector, as higher carry yields (income generation) and improving fundamentals helped to offset price declines. Within investment grade corporate credit, security selection was focused on increasing the overall quality and liquidity of the Fund’s holdings, which contributed positively to returns. 
• Conversely, sector allocation within investment grade corporate credit had a negative impact on performance. The Fund held capital securities in the financials sector, which mostly underperformed other credit sectors as investors feared the sovereign debt crisis in Europe would ultimately have a negative impact on US-based financial companies. Capital securities were particularly hurt as they are lower in the capital structure and therefore tend to exhibit higher volatility during periods of risk aversion. 

Describe recent portfolio activity.

• During the 12-month period, the Fund increased its leveraged exposure to corporate credit in order to position itself to benefit from improving corporate fundamentals in an accommodative monetary policy environment. In the latter half of the period, the Fund reduced exposure to riskier credits as these names typically require significant economic growth to realize a boost in valuations. From an industry perspective, the Fund increased exposure to independent energy names. Within the wireless telecommunications services sector, the Fund increased its credit quality profile by selling names in high yield to purchased investment grade credits with better predictability of earnings. 

Describe portfolio positioning at period end.

• The Fund maintained diversified exposure across investment grade and high yield corporate credits. Portfolio holdings at period end reflected a bias toward higher-quality issues and a preference for more stable industries and companies that offer good cash flows, earnings and revenue visibility and attractive downside protection. The Fund’s corporate credit holdings reflect a bias toward industrials over financials and utilities. Within industrials, the Fund favored media cable and media non-cable names. 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

6ANNUAL REPORTOCTOBER 31, 2011
 

BlackRock Credit Allocation Income Trust II, Inc.

Fund Information

Symbol on NYSE PSY
Initial Offering Date March 28, 2003
Yield on Closing Market Price as of October 31, 2011 ($9.74)1 7.52%
Current Monthly Distribution per Common Share2 $0.0610
Current Annualized Distribution per Common Share2 $0.7320
Leverage as of October 31, 20113 32%

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.  
The distribution rate is not constant and is subject to change. 
Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14. 

The table below summarizes the changes in the Fund’s market price and NAV per share:

  10/31/11 10/31/10 Change High Low
Market Price $  9.74 $10.39 (6.26)% $10.60 $  9.08
Net Asset Value $11.25 $11.59 (2.93)% $11.72 $10.61

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

Portfolio Composition

  10/31/11 10/31/10
Corporate Bonds 80 % 64 %
Preferred Securities 17   19  
US Treasury Obligations 1   16  
Asset Backed Securities 1    
Taxable Municipal Bonds 1   1  

Credit Quality Allocations4

  10/31/11 10/31/10
AAA/Aaa5 1 % 16 %
AA/Aa 7   7  
A 26   21  
BBB/Baa 39   42  
BB/Ba 17   12  
B 7   1  
CCC/Caa 1    
Not Rated 2   1  

Using the higher of S&P’s or Moody’s ratings. 
Includes US Treasury obligations that are deemed AAA by the investment advisor. 
ANNUAL REPORTOCTOBER 31, 20117
  

Fund Summary as of October 31, 2011 BlackRock Credit Allocation Income Trust III

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

• For the 12 months ended October 31, 2011, the Fund returned (0.16)% based on market price and 3.56% based on NAV. For the same period, the closed-end Lipper Corporate Debt Funds (BBB-Rated) category posted an average return of 2.90% based on market price and 4.65% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. 

What factors influenced performance?

• The primary driver of the Fund’s positive performance was its duration positioning (management of interest rate sensitivity) as interest rates generally moved lower during the period. However, duration in the Fund was partially hedged using interest rate derivative instruments such as futures contracts, options and swaps. These hedges were put into place to limit expected volatility in interest rates and had a net negative contribution to performance. 
• The Fund’s allocation to high yield corporate credit benefited performance despite recent weakness in the sector, as higher carry yields (income generation) and improving fundamentals helped to offset price declines. Within investment grade corporate credit, security selection was focused on increasing the overall quality and liquidity of the Fund’s holdings, which contributed positively to returns. 
• Conversely, sector allocation within investment grade corporate credit had a negative impact on performance. The Fund held capital securities in the financials sector, which mostly underperformed other credit sectors as investors feared the sovereign debt crisis in Europe would ultimately have a negative impact on US-based financial companies. Capital securities were particularly hurt as they are lower in the capital structure and therefore tend to exhibit higher volatility during periods of risk aversion. 

Describe recent portfolio activity.

• During the 12-month period, the Fund increased its leveraged exposure to corporate credit in order to position itself to benefit from improving corporate fundamentals in an accommodative monetary policy environment. In the latter half of the period, the Fund reduced exposure to riskier credits as these names typically require significant economic growth to realize a boost in valuations. From an industry perspective, the Fund increased exposure to independent energy names. Within the wireless telecommunications services sector, the Fund increased its credit quality profile by selling names in high yield to purchase investment grade credits with better predictability of earnings. 

Describe portfolio positioning at period end.

• The Fund maintained diversified exposure across investment grade and high yield corporate credits. Portfolio holdings at period end reflected a bias toward higher-quality issues and a preference for more stable industries and companies that offer good cash flows, earnings and revenue visibility and attractive downside protection. The Fund’s corporate credit holdings reflect a bias toward industrials over financials and utilities. Within industrials, the Fund favored media cable and media non-cable names. 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

8ANNUAL REPORTOCTOBER 31, 2011
 

BlackRock Credit Allocation Income Trust III

Fund Information

Symbol on NYSE BPP
Initial Offering Date February 28, 2003
Yield on Closing Market Price as of October 31, 2011 ($10.53)1 7.01%
Current Monthly Distribution per Common Share2 $0.0615
Current Annualized Distribution per Common Share2 $0.7380
Leverage as of October 31, 20113 29%

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. 
A change in the distribution rate was declared on December 5, 2011. The Monthly Distribution per Common Share increased to $0.0635. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to further change in the future. 
Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14. 

The table below summarizes the changes in the Fund’s market price and NAV per share:

  10/31/11 10/31/10 Change High Low
Market Price $10.53 $11.23 (6.23)% $11.31 $  9.71
Net Asset Value $12.07 $12.41 (2.74)% $12.62 $11.35

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

Portfolio Composition

  10/31/11 10/31/10
Corporate Bonds 83 % 72 %
Preferred Securities 15   18  
US Treasury Obligations 1   9  
Taxable Municipal Bonds 1   1  

Credit Quality Allocations4

  10/31/11 10/31/10
AAA/Aaa5 1 % 9 %
AA/Aa 6   8  
A 31   26  
BBB/Baa 37   40  
BB/Ba 15   14  
B 8   1  
CCC/Caa 1   1  
Not Rated 1   1  

Using the higher of S&P’s or Moody’s ratings. 
Includes US Treasury obligations that are deemed AAA by the investment advisor. 
ANNUAL REPORTOCTOBER 31, 20119
  

Fund Summary as of October 31, 2011 BlackRock Credit Allocation Income Trust IV

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

• For the 12 months ended October 31, 2011, the Fund returned (0.60)% based on market price and 3.28% based on NAV. For the same period, the closed-end Lipper Corporate Debt Funds (BBB-Rated) category posted an average return of 2.90% based on market price and 4.65% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. 

What factors influenced performance?

• The primary driver of the Fund’s positive performance was its duration positioning (management of interest rate sensitivity) as interest rates generally moved lower during the period. However, duration in the Fund was partially hedged using interest rate derivative instruments such as futures contracts, options and swaps. These hedges were put into place to limit expected volatility in interest rates and had a net negative contribution to performance. 
• The Fund’s allocation to high yield corporate credit benefited performance despite recent weakness in the sector, as higher carry yields (income generation) and improving fundamentals helped to offset price declines. Within investment grade corporate credit, security selection was focused on increasing the overall quality and liquidity of the Fund’s holdings, which contributed positively to returns. 
• Conversely, sector allocation within investment grade corporate credit had a negative impact on performance. The Fund held capital securities in the financials sector, which mostly underperformed other credit sectors as investors feared the sovereign debt crisis in Europe would ultimately have a negative impact on US-based financial companies. Capital securities were particularly hurt as they are lower in the capital structure and therefore tend to exhibit higher volatility during periods of risk aversion. 

Describe recent portfolio activity.

• During the 12-month period, the Fund increased its leveraged exposure to corporate credit in order to position itself to benefit from improving corporate fundamentals in an accommodative monetary policy environment. In the latter half of the period, the Fund reduced exposure to riskier credits as these names typically require significant economic growth to realize a boost in valuations. From an industry perspective, the Fund increased exposure to independent energy names. Within the wireless telecommunications services sector, the Fund increased its credit quality profile by selling names in high yield to purchase investment grade credits with better predictability of earnings. 

Describe portfolio positioning at period end.

• The Fund maintained diversified exposure across investment grade and high yield corporate credits. Portfolio holdings at period end reflected a bias toward higher-quality issues and a preference for more stable industries and companies that offer good cash flows, earnings and revenue visibility and attractive downside protection. The Fund’s corporate credit holdings reflect a bias toward industrials over financials and utilities. Within industrials, the Fund favored media cable and media non-cable names. 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

10ANNUAL REPORTOCTOBER 31, 2011
 

BlackRock Credit Allocation Income Trust IV

Fund Information

Symbol on NYSE BTZ
Initial Offering Date December 27, 2006
Yield on Closing Market Price as of October 31, 2011 ($12.08)1 7.60%
Current Monthly Distribution per Common Share2 $0.0765
Current Annualized Distribution per Common Share2 $0.9180
Leverage as of October 31, 20113 32%

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. 
A change in the distribution rate was declared on December 5, 2011. The Monthly Distribution per Common Share increased to $0.0785. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to further change in the future. 
Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14. 

The table below summarizes the changes in the Fund’s market price and NAV per share:

  10/31/11 10/31/10 Change High Low
Market Price $12.08 $13.02 (7.22)% $13.20 $11.19
Net Asset Value $13.94 $14.46 (3.60)% $14.56 $13.10

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

Portfolio Composition

  10/31/11 10/31/10
Corporate Bonds 80 % 64 %
Preferred Securities 17   19  
US Treasury Obligations 1   15  
Taxable Municipal Bonds 1   2  
Asset Backed Securities 1    

Credit Quality Allocations4

  10/31/11 10/31/10
AAA/Aaa5 1 %  
AA/Aa 7   11 %
A 29   22  
BBB/Baa 37   44  
BB/Ba 16   19  
B 8   2  
Not Rated 2   2  

Using the higher of S&P’s or Moody’s ratings. 
Includes US Treasury Obligations that are deemed AAA by the investment advisor. 
ANNUAL REPORTOCTOBER 31, 201111
  

Fund Summary as of October 31, 2011 BlackRock Floating Rate Income Trust

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

• For the 12 months ended October 31, 2011, the Fund returned (3.46)% based on market price and 4.03% based on NAV. For the same period, the closed-end Lipper Loan Participation Funds category posted an average return of 0.51% based on market price and 4.01% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. 

What factors influenced performance?

• Floating rate loan interests (“bank loans”) performed well over the 12-month period. Although it lagged a number of its fixed income peers, the asset class benefited from a favorable technical backdrop, solid corporate fundamentals and record low default rates. More recently, however, macroeconomic concerns have weighed on the sector, triggering sharp bouts of volatility, some modest spread widening and significant price depreciation from the near-par levels seen in the first quarter of 2011. 
• The Fund’s positive performance was driven primarily by security selection within the higher-quality tiers of the bank loan market. By and large, positive selection reflected the Fund’s higher-quality bias and focus on more “recession-resistant” sectors that are not heavily reliant on a strong consumer, such as chemicals and non-captive diversified industrials. 
• While the Fund invests primarily in bank loans, it also maintains an allocation to emerging market and high yield bonds (approximately 25% of the leveraged portfolio). During the reporting period, the Fund pursued a bias towards high yield corporate bonds at the expense of its emerging market exposure. This positioning benefited performance for the year as high yield has outperformed not only emerging market debt, but bank loans as well. 
• As the fund is mandated to hold a certain percentage of its assets in non-US instruments, our exposure to non-US-dollar denominated loans, particularly those issued in Europe, detracted from performance given a much lower level of liquidity and market transparency. This mainly impaired the portfolio when the global sell-off commenced in August. 

Describe recent portfolio activity.

• During the 12-month period, the Fund maintained its higher-quality bias in terms of loan structure, overall credit quality and liquidity. Prior to the market correction in August, management reduced exposure to some of the Fund’s lower-quality holdings and increased its level of cash as market conditions appeared to be weakening and our outlook grew increasingly uncertain. While transitioning the overall portfolio to a more conservative stance, management continued to seek investment opportunities in the market, albeit cautiously, targeting companies with superior credit fundamentals (i.e., stable income streams, earnings visibility, and attractive downside protection). 

Describe portfolio positioning at period end.

• At period end, the Fund held large exposures to the non-captive diversified industrials, chemicals and wireless sectors, while exposure to healthcare, media non-cable and technology was limited. The Fund held 78% of its total portfolio in bank loans, 18% in corporate bonds and the remainder invested in a mix of asset backed securities, foreign agency obligations and other interests. The Fund ended the period with leverage at 27% of its total managed assets. 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

12ANNUAL REPORTOCTOBER 31, 2011
 

BlackRock Floating Rate Income Trust

Fund Information

Symbol on NYSE BGT
Initial Offering Date August 30, 2004
Yield on Closing Market Price as of October 31, 2011 ($13.00)1 7.15%
Current Monthly Distribution per Common Share2 $0.0775
Current Annualized Distribution per Common Share2 $0.9300
Leverage as of October 31, 20113 27%

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. 
The distribution rate is not constant and is subject to change. 
Represents the loan outstanding as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14. 

The table below summarizes the changes in the Fund’s market price and NAV per share:

  10/31/11 10/31/10 Change High Low
Market Price $13.00 $14.52 (10.47)% $17.00 $11.71
Net Asset Value $13.97 $14.48   (3.52)% $14.83 $13.25

The following charts show the portfolio composition of the Fund’s long-term investments and credit quality allocations of the Fund’s long-term investments excluding common stocks and floating rate loan interests:

Portfolio Composition

  10/31/11 10/31/10
Floating Rate Loan Interests 78 % 79 %
Corporate Bonds 18   16  
Asset Backed Securities 2    
Foreign Agency Obligations 1   4  
Other Interests 1   1  

Credit Quality Allocations4

  10/31/11 10/31/10
AA/Aa 9 %  
A 2   4 %
BBB/Baa 25   21  
BB/Ba 27   23  
B 34   29  
CCC/Caa 1   1  
Not Rated 2   22 5 

Using the higher of S&P’s or Moody’s ratings. 
The investment advisor has deemed certain of these securities to be of investment grade quality. As of October 31, 2010, the market value of these securities was $606,918, representing 1% of the Fund's long-term investments. 
ANNUAL REPORTOCTOBER 31, 201113
  


The Benefits and Risks of Leveraging

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

The Funds may utilize leverage by borrowing through a credit facility or through entering into reverse repurchase agreements. The Funds also had auction market preferred shares (“Preferred Shares”) issuances outstanding during the year ended October 31, 2011. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage, which will be based on short-term interest rates, will normally be lower than the income earned by each Fund on its longer-term portfolio investments. To the extent that the total assets of each Fund (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Fund’s shareholders will benefit from the incremental net income.

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

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

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

Furthermore, the value of the Funds’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the redemption value of the Funds’ borrowings does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAV positively or negatively in addition to the impact on Fund performance from borrowings discussed above.

The use of leverage may enhance opportunities for increased income to the Funds and Common Shareholders, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes in the Funds’ NAVs, market prices and dividend rates than comparable portfolios without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, the Funds’ net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, each Fund’s net income will be less than if leverage had not been used, and therefore the amount available for distribution to Shareholders will be reduced. Each Fund may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause a Fund to incur losses. The use of leverage may limit each Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Fund will incur expenses in connection with the use of leverage, all of which are borne by Shareholders and may reduce income.

Under the Investment Company Act of 1940, the Funds are permitted to borrow through their credit facility or by entering into reverse repurchase agreements up to 331/3% of their total managed assets. As of October 31, 2011, the Funds had outstanding leverage from borrowings as a percentage of their total managed assets as follows:

  Percent of
Leverage
PSW 33%
PSY 32%
BPP 29%
BTZ 32%
BGT 27%

14ANNUAL REPORTOCTOBER 31, 2011
 

Derivative Financial Instruments

The Funds may invest in various derivative financial instruments, including financial futures contracts, foreign currency exchange contracts, options and swaps as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market, equity, credit, interest rate, foreign currency exchange rate, and/or other risks. Derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Funds’ ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require a Fund to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Fund can realize on an investment, may result in lower dividends paid to shareholders or may cause a Fund to hold an investment that it might otherwise sell. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201115
  


Schedule of Investments October 31, 2011 BlackRock Credit Allocation Income Trust I, Inc. (PSW)
  (Percentages shown are based on Net Assets)

Asset-Backed Securities   Par
(000)
  Value
Atrium CDO Corp., Series 5A, Class A4, 0.69%,          
7/20/20 (a)(b) USD 650   $ 503,750
SLM Student Loan Trust, Series 2004-B, Class A2,          
0.55%, 6/15/21 (b)   516     493,571
Total Asset-Backed Securities — 0.9%         997,321
  

Corporate Bonds
Aerospace & Defense — 1.8%          
BE Aerospace, Inc., 8.50%, 7/01/18   560     611,800
Bombardier, Inc., 7.75%, 3/15/20 (a)   720     792,000
Huntington Ingalls Industries, Inc. (a):          
6.88%, 3/15/18   150     151,125
7.13%, 3/15/21   140     141,750
Kratos Defense & Security Solutions, Inc.,          
10.00%, 6/01/17   282     291,870
          1,988,545
Airlines — 1.0%          
American Airlines Pass-Through Trust:          
Series 2011-1, Class A, 5.25%, 7/31/22   325     295,313
Series 2011-2, Class A, 8.63%, 4/15/23   115     115,000
Continental Airlines Pass-Through Certificates,          
Series 2009-2, Class B, 9.25%, 5/10/17   335     344,636
Delta Air Lines, Inc., Series 02G1, 6.72%, 7/02/24   294     290,371
          1,045,320
Auto Components — 1.5%          
Daimler Finance North America LLC, 2.63%,          
9/15/16 (a)(c)   800     795,098
Delphi Corp., 6.13%, 5/15/21 (a)   130     132,600
Icahn Enterprises LP:          
7.75%, 1/15/16   200     205,000
8.00%, 1/15/18   500     508,750
          1,641,448
Beverages — 0.5%          
Constellation Brands, Inc., 7.25%, 5/15/17   460     506,000
Building Products — 0.4%          
Building Materials Corp. of America (a):          
7.00%, 2/15/20   85     90,100
6.75%, 5/01/21   270     280,125
          370,225
Capital Markets — 4.9%          
Ameriprise Financial, Inc., 5.30%, 3/15/20 (c)   750     817,321
E*Trade Financial Corp., 12.50%, 11/30/17 (d)   440     507,100
The Goldman Sachs Group, Inc., 6.25%, 2/01/41 (c)   1,050     1,082,767
Macquarie Bank Ltd., 6.63%, 4/07/21 (a)(c)   445     435,838
Morgan Stanley (c):          
5.75%, 1/25/21   1,025     1,012,283
5.50%, 7/28/21   390     380,926
UBS AG (c):          
2.25%, 1/28/14   375     373,679
5.88%, 7/15/16   650     671,476
          5,281,390
Chemicals — 1.0%          
Ashland, Inc., 9.13%, 6/01/17   120     134,100
Celanese US Holdings LLC, 5.88%, 6/15/21   370     393,125
           
Corporate Bonds   Par
(000)
  Value
Chemicals (concluded)          
Lyondell Chemical Co., 11.00%, 5/01/18 USD 290   $ 322,988
Solutia, Inc., 7.88%, 3/15/20   200     214,000
          1,064,213
Commercial Banks — 5.9%          
Amsouth Bank, Series AI, 4.85%, 4/01/13   200     192,500
Asciano Finance Ltd., 5.00%, 4/07/18 (a)   200     212,630
Associated Banc-Corp, 5.13%, 3/28/16   515     531,376
BNP Paribas, 3.60%, 2/23/16 (c)   390     388,907
Branch Banking & Trust Co. (b):          
0.66%, 9/13/16   250     231,631
0.60%, 5/23/17   150     136,184
CIT Group, Inc.:          
7.00%, 5/01/15   60     60,000
7.00%, 5/02/16 (a)   370     369,075
7.00%, 5/01/17   331     331,000
7.00%, 5/02/17 (a)   90     89,775
City National Corp., 5.25%, 9/15/20 (c)   550     560,704
Discover Bank, 8.70%, 11/18/19   300     339,312
HSBC Holdings Plc, 5.10%, 4/05/21 (c)   1,300     1,400,188
Regions Financial Corp.:          
4.88%, 4/26/13   600     585,000
5.75%, 6/15/15   460     442,750
SVB Financial Group, 5.38%, 9/15/20 (c)   550     567,574
          6,438,606
Commercial Services & Supplies — 3.8%          
Aviation Capital Group Corp. (a):          
7.13%, 10/15/20 (c)   2,200     2,129,486
6.75%, 4/06/21   550     529,601
Casella Waste Systems, Inc., 7.75%, 2/15/19   169     162,240
Clean Harbors, Inc., 7.63%, 8/15/16   306     323,595
Corrections Corp. of America, 7.75%, 6/01/17   775     838,937
Iron Mountain, Inc., 7.75%, 10/01/19   90     93,375
Mobile Mini, Inc., 7.88%, 12/01/20   65     65,000
          4,142,234
Communications Equipment — 0.9%          
Avaya, Inc., 9.75%, 11/01/15   200     177,000
Brocade Communications Systems, Inc., 6.88%, 1/15/20 700     733,250
EH Holding Corp., 6.50%, 6/15/19 (a)   100     102,250
          1,012,500
Consumer Finance — 4.4%          
American Express Credit Corp., 2.75%, 9/15/15 (c)   1,400     1,417,451
Capital One Bank USA NA, 8.80%, 7/15/19   775     920,554
Ford Motor Credit Co., LLC, 7.00%, 4/15/15   690     752,100
Inmarsat Finance Plc, 7.38%, 12/01/17 (a)   420     449,400
SLM Corp., 6.25%, 1/25/16   1,180     1,180,000
          4,719,505
Containers & Packaging — 1.6%          
Ball Corp.:          
7.13%, 9/01/16   400     433,000
6.75%, 9/15/20   505     544,137
Bemis Co., Inc., 6.80%, 8/01/19   200     234,419
Crown Americas LLC, 6.25%, 2/01/21 (a)   200     210,000
Graphic Packaging International, Inc., 9.50%, 6/15/17 155     169,337
Rock-Tenn Co., 9.25%, 3/15/16   75     79,688
Sealed Air Corp., 8.38%, 9/15/21 (a)   30     32,475
          1,703,056

Portfolio Abbreviations

To simplify the listings of portfolio holdings in the Schedules of Investments, the names of many of the securities have been abbreviated according to the following list:

CAD Canadian Dollar GBP British Pound
CHF Swiss Franc LIBOR London InterBank Offered Rate
EUR Euro RB Revenue Bonds
FKA Formerly Known As USD US Dollar

See Notes to Financial Statements.

16ANNUAL REPORTOCTOBER 31, 2011
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust I, Inc. (PSW)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Diversified Financial Services — 10.0%          
Ally Financial, Inc.:          
4.50%, 2/11/14 USD 225   $ 219,938
8.30%, 2/12/15   390     409,500
8.00%, 11/01/31   440     438,900
Bank of America Corp. (c):          
5.30%, 3/15/17   855     817,627
5.00%, 5/13/21   1,325     1,244,058
Citigroup, Inc.:          
6.38%, 8/12/14   300     323,863
4.59%, 12/15/15 (c)   225     235,084
Dolphin Subsidiary II, Inc., 7.25%, 10/15/21 (a)   210     225,225
General Electric Capital Corp., 5.30%, 2/11/21 (c)   1,125     1,197,296
General Motors Financial Co., Inc., 6.75%, 6/01/18 (a) 120     121,098
ING Bank NV, 5.00%, 6/09/21 (a)(c)   550     564,531
Intesa Sanpaolo SpA (c):          
2.38%, 12/21/12   800     779,110
6.50%, 2/24/21 (a)   200     184,541
JPMorgan Chase & Co., 3.15%, 7/05/16 (c)   950     951,612
Moody’s Corp., 6.06%, 9/07/17   2,500     2,642,573
Reynolds Group Issuer, Inc. (a):          
7.88%, 8/15/19   255     266,475
8.25%, 2/15/21   190     174,325
WMG Acquisition Corp., 9.50%, 6/15/16 (a)   50     53,000
          10,848,756
Diversified Telecommunication Services — 4.4%          
AT&T, Inc., 6.30%, 1/15/38 (c)   1,000     1,201,729
France Telecom SA, 4.13%, 9/14/21   150     154,534
Level 3 Financing, Inc.:          
8.75%, 2/15/17   165     168,712
8.13%, 7/01/19 (a)   758     750,420
Qwest Corp., 8.38%, 5/01/16   390     445,575
Telecom Italia Capital SA, 6.18%, 6/18/14   225     228,555
Telefonica Emisiones SAU, 5.46%, 2/16/21   310     314,186
Verizon Communications, Inc., 7.35%, 4/01/39 (c)   925     1,276,923
Windstream Corp., 7.88%, 11/01/17   240     259,200
          4,799,834
Electric Utilities — 1.2%          
Progress Energy, Inc., 7.00%, 10/30/31 (c)   1,000     1,311,396
Electronic Equipment, Instruments & Components — 0.9%        
Jabil Circuit, Inc., 8.25%, 3/15/18   200     232,000
NXP BV, 3.15%, 10/15/13 (b)   700     686,000
          918,000
Energy Equipment & Services — 1.2%          
Ensco Plc, 4.70%, 3/15/21 (c)   460     484,010
Frac Tech Services LLC, 7.63%, 11/15/18 (a)   250     261,250
Key Energy Services, Inc., 6.75%, 3/01/21   175     178,938
MEG Energy Corp., 6.50%, 3/15/21 (a)   225     234,562
Oil States International, Inc., 6.50%, 6/01/19   120     125,700
SunCoke Energy, Inc., 7.63%, 8/01/19 (a)   45     45,450
          1,329,910
Food & Staples Retailing — 2.9%          
CVS Caremark Corp., 6.30%, 6/01/62 (b)   800     777,000
Wal-Mart Stores, Inc., 6.20%, 4/15/38 (c)   1,825     2,379,672
          3,156,672
Food Products — 1.0%          
Kraft Foods, Inc.:          
6.50%, 8/11/17   385     460,191
6.13%, 8/23/18   390     464,103
Smithfield Foods, Inc., 10.00%, 7/15/14   86     99,975
          1,024,269
           
Corporate Bonds   Par
(000)
  Value
Gas Utilities — 0.1%          
Targa Resources Partners LP, 6.88%, 2/01/21 (a) USD 115   $ 113,563
Health Care Equipment & Supplies — 0.6%          
Fresenius US Finance II, Inc., 9.00%, 7/15/15 (a)   500     565,000
Teleflex, Inc., 6.88%, 6/01/19   115     119,025
          684,025
Health Care Providers & Services — 3.6%          
Aetna, Inc., 6.75%, 12/15/37 (c)   400     508,966
Aviv Healthcare Properties LP, 7.75%, 2/15/19   105     101,325
HCA, Inc.:          
8.50%, 4/15/19   55     60,500
6.50%, 2/15/20   560     586,600
7.25%, 9/15/20   195     208,894
7.50%, 2/15/22   470     479,400
INC Research LLC, 11.50%, 7/15/19 (a)   165     148,500
inVentiv Health, Inc., 10.00%, 8/15/18 (a)   120     115,200
Tenet Healthcare Corp.:          
10.00%, 5/01/18   350     401,625
8.88%, 7/01/19   250     282,500
UnitedHealth Group, Inc., 6.88%, 2/15/38 (c)   800     1,054,925
          3,948,435
Household Durables — 0.3%          
Cemex Espana Luxembourg, 9.25%, 5/12/20 (a)   365     289,263
Independent Power Producers & Energy Traders — 1.3%        
AES Corp.:          
9.75%, 4/15/16   235     266,725
7.38%, 7/01/21 (a)   75     80,250
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (a) 125     133,125
Calpine Corp., 7.25%, 10/15/17 (a)   100     104,000
Energy Future Intermediate Holding Co., LLC, 10.00%,          
12/01/20   410     430,500
NRG Energy, Inc., 7.38%, 1/15/17   400     416,500
          1,431,100
Insurance — 8.3%          
Allianz Finance II BV, 5.75%, 7/08/41 (b) EUR 200     247,763
The Allstate Corp., 7.45%, 5/16/19 (c) USD 900     1,119,175
American International Group, Inc., 6.40%,          
12/15/20 (c)   410     429,412
Aon Corp., 5.00%, 9/30/20 (c)   1,600     1,753,397
Dai-ichi Life Insurance Co. Ltd., 7.25%,          
12/31/49 (a)(b)(e)   88     89,924
Fairfax Financial Holdings Ltd., 5.80%, 5/15/21 (a)   700     659,637
Forethought Financial Group, Inc., 8.63%, 4/15/21 (a)   250     253,962
Genworth Financial, Inc., 7.63%, 9/24/21   225     203,384
Manulife Financial Corp., 4.90%, 9/17/20 (c)   1,000     1,027,102
MPL 2 Acquisition Canco, Inc., 9.88%, 8/15/18 (a)   100     86,000
Northwestern Mutual Life Insurance, 6.06%, 3/30/40 (a)(c) 900     1,054,781
Principal Financial Group, Inc., 8.88%, 5/15/19   225     285,076
Prudential Financial, Inc., 6.63%, 12/01/37 (c)   800     951,260
XL Group Ltd., 5.75%, 10/01/21 (c)   810     854,066
          9,014,939
IT Services — 0.7%          
Eagle Parent Canada, Inc., 8.63%, 5/01/19 (a)   160     149,600
First Data Corp. (a):          
7.38%, 6/15/19   170     168,300
8.25%, 1/15/21   20     19,000
12.63%, 1/15/21   215     203,175
SunGard Data Systems, Inc., 7.38%, 11/15/18   230     235,175
          775,250
Life Sciences Tools & Services — 1.9%          
Bio-Rad Laboratories, Inc., 8.00%, 9/15/16   865     942,850
Life Technologies Corp., 6.00%, 3/01/20 (c)   1,000     1,114,541
          2,057,391

See Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201117
  


Schedule of Investments (continued) BlackRock Credit Allocation Income Trust I, Inc. (PSW)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Machinery — 1.1%          
Ingersoll-Rand Global Holding Co. Ltd.,          
9.50%, 4/15/14 USD 800   $ 940,430
Navistar International Corp., 8.25%, 11/01/21   218     237,075
          1,177,505
Media — 9.2%          
AMC Networks, Inc., 7.75%, 7/15/21 (a)   90     97,650
CCH II LLC, 13.50%, 11/30/16   541     623,502
Cengage Learning Acquisitions, Inc.,          
10.50%, 1/15/15 (a)   165     130,350
Comcast Corp., 6.30%, 11/15/17   800     945,182
Cox Communications, Inc., 8.38%, 3/01/39 (a)   800     1,118,633
CSC Holdings LLC:          
8.50%, 4/15/14   160     175,600
8.50%, 6/15/15   400     434,000
8.63%, 2/15/19   275     312,125
DIRECTV Holdings LLC, 5.00%, 3/01/21 (c)   600     656,813
DISH DBS Corp., 7.00%, 10/01/13   450     475,875
Intelsat Luxembourg SA (d):          
11.50%, 2/04/17 (a)   40     40,000
11.50%, 2/04/17   100     100,000
The Interpublic Group of Cos., Inc., 10.00%, 7/15/17 275     314,875
Kabel BW Erste Beteiligungs GmbH, 7.50%, 3/15/19 (a) 230     239,200
News America, Inc., 6.15%, 3/01/37 (c)   950     1,043,310
Time Warner Cable, Inc., 6.75%, 6/15/39   925     1,124,334
Time Warner, Inc., 7.70%, 5/01/32 (c)   950     1,237,053
Unitymedia Hessen GmbH & Co. KG (FKA UPC          
Germany GmbH), 8.13%, 12/01/17 (a)   240     255,600
Virgin Media Secured Finance Plc, 6.50%, 1/15/18   600     646,500
          9,970,602
Metals & Mining — 2.6%          
Alcoa, Inc., 5.40%, 4/15/21   580     574,699
Barrick Gold Corp., 2.90%, 5/30/16   275     285,522
Barrick North America Finance LLC, 5.70%, 5/30/41 300     348,674
FMG Resources August 2006 Property Ltd. (a):          
6.88%, 2/01/18   55     52,800
8.25%, 11/01/19   45     45,450
Freeport-McMoRan Corp., 7.13%, 11/01/27   700     813,361
Novelis, Inc., 8.75%, 12/15/20   230     250,700
Teck Resources Ltd., 10.75%, 5/15/19   400     494,000
          2,865,206
Multi-Utilities — 1.6%          
CenterPoint Energy, Inc.:          
5.95%, 2/01/17   750     844,566
6.50%, 5/01/18   775     902,905
          1,747,471
Multiline Retail — 0.6%          
JC Penney Co., Inc., 5.65%, 6/01/20   700     659,750
Oil, Gas & Consumable Fuels — 12.5%          
Alpha Natural Resources, Inc.:          
6.00%, 6/01/19   60     59,550
6.25%, 6/01/21   165     162,938
Anadarko Petroleum Corp.:          
5.95%, 9/15/16   244     280,409
6.38%, 9/15/17   10     11,767
Arch Coal, Inc. (a):          
7.00%, 6/15/19   50     51,750
7.25%, 6/15/21   165     169,950
BP Capital Markets Plc, 3.88%, 3/10/15 (c)   350     374,701
Buckeye Partners LP, 4.88%, 2/01/21   225     236,963
Chesapeake Energy Corp., 6.13%, 2/15/21   770     806,575
Chesapeake Midstream Partners LP, 5.88%, 4/15/21 (a) 140     141,400
Chesapeake Oilfield Operating LLC, 6.63%, 11/15/19 (a) 65     66,788
Consol Energy, Inc., 6.38%, 3/01/21 (a)   105     104,475
Copano Energy LLC, 7.13%, 4/01/21   130     132,925

Corporate Bonds   Par
(000)
  Value
Oil, Gas & Consumable Fuels (concluded)          
DCP Midstream LLC, 4.75%, 9/30/21 (a) USD 325   $ 339,213
Denbury Resources, Inc., 6.38%, 8/15/21   135     139,050
El Paso Corp., 7.00%, 6/15/17   335     375,200
El Paso Pipeline Partners Operating Co., LLC,          
5.00%, 10/01/21   125     128,184
Enbridge Energy Partners LP, 9.88%, 3/01/19   475     636,165
Energy XXI Gulf Coast, Inc., 7.75%, 6/15/19   240     242,400
Enterprise Products Operating LLC, 6.65%, 4/15/18 (c)   1,000     1,176,342
Forest Oil Corp., 8.50%, 2/15/14   295     318,600
Hilcorp Energy I LP, 7.75%, 11/01/15 (a)   165     169,274
Kinder Morgan Energy Partners LP, 6.85%, 2/15/20   1,000     1,194,906
Linn Energy LLC, 7.75%, 2/01/21   225     240,187
Marathon Petroleum Corp., 3.50%, 3/01/16 (a)(c)   325     333,402
MarkWest Energy Partners LP, 6.25%, 6/15/22 (f)   125     128,125
Newfield Exploration Co., 5.75%, 1/30/22   115     121,900
Oasis Petroleum, Inc.:          
7.25%, 2/01/19 (a)   80     84,400
6.50%, 11/01/21 (f)   70     70,350
OGX Petroleo e Gas Participacoes SA, 8.50%,          
6/01/18 (a)   280     277,200
ONEOK Partners LP, 8.63%, 3/01/19   800     1,034,405
Petrobras International Finance Co., 3.88%, 1/27/16   875     895,388
Petrohawk Energy Corp.:          
10.50%, 8/01/14   145     162,581
6.25%, 6/01/19   165     186,450
Pioneer Natural Resources Co.:          
6.65%, 3/15/17   150     162,908
6.88%, 5/01/18   115     124,351
Plains Exploration & Production Co.:          
7.75%, 6/15/15   185     191,937
10.00%, 3/01/16   95     105,450
Precision Drilling Corp., 6.50%, 12/15/21 (a)   95     100,225
Premier Oil, 5.00%, 6/09/18   825     858,000
Range Resources Corp., 6.75%, 8/01/20   200     222,000
SandRidge Energy, Inc., 7.50%, 3/15/21 (a)   170     164,050
SM Energy Co., 6.63%, 2/15/19 (a)   55     55,550
Western Gas Partners LP, 5.38%, 6/01/21   350     372,204
The Williams Cos., Inc., 8.75%, 3/15/32   275     374,410
          13,584,998
Paper & Forest Products — 2.8%          
Boise Paper Holdings LLC, 8.00%, 4/01/20   150     157,875
Georgia-Pacific LLC, 8.25%, 5/01/16 (a)   785     870,439
International Paper Co.:          
7.50%, 8/15/21   775     941,845
7.30%, 11/15/39   800     932,843
Longview Fibre Paper & Packaging, Inc.,          
8.00%, 6/01/16 (a)   80     81,200
Verso Paper Holdings LLC, 11.50%, 7/01/14   85     89,250
          3,073,452
Pharmaceuticals — 9.8%          
Bristol-Myers Squibb Co., 5.88%, 11/15/36 (c)   892     1,133,257
Capsugel Finance Co. SCA, 9.88%, 8/01/19 (a) EUR 100     141,137
GlaxoSmithKline Capital, Inc., 6.38%, 5/15/38 (c) USD 1,690     2,284,327
Merck & Co., Inc. (c):          
6.50%, 12/01/33   475     649,655
6.55%, 9/15/37   1,504     2,093,809
Pfizer, Inc., 7.20%, 3/15/39 (c)   2,500     3,734,135
Valeant Pharmaceuticals International, 6.50%, 7/15/16 (a) 65     65,000
Watson Pharmaceuticals, Inc., 6.13%, 8/15/19 (c)   490     572,398
          10,673,718
Real Estate Investment Trusts (REITs) — 2.8%          
AvalonBay Communities, Inc., 6.10%, 3/15/20 (c)   800     907,763
Developers Diversified Realty Corp.:          
4.75%, 4/15/18   155     145,864
7.88%, 9/01/20   175     189,420
ERP Operating LP, 5.75%, 6/15/17   800     894,065

See Notes to Financial Statements.

18ANNUAL REPORTOCTOBER 31, 2011
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust I, Inc. (PSW)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Real Estate Investment Trusts (REITs) (concluded)          
HCP, Inc., 5.38%, 2/01/21 USD 250   $ 256,759
UDR, Inc., 4.25%, 6/01/18   350     359,902
Ventas Realty LP/Ventas Capital Corp., 4.75%, 6/01/21 270     264,397
          3,018,170
Real Estate Management & Development — 0.2%          
Realogy Corp., 7.88%, 2/15/19 (a)   135     121,500
Shea Homes LP, 8.63%, 5/15/19 (a)   110     99,550
          221,050
Road & Rail — 1.6%          
Avis Budget Car Rental LLC, 8.25%, 1/15/19   100     99,750
Florida East Coast Railway Corp., 8.13%, 2/01/17   40     40,000
The Hertz Corp., 6.75%, 4/15/19   207     211,140
Norfolk Southern Corp., 6.00%, 3/15/2105 (c)   1,200     1,388,004
          1,738,894
Semiconductors & Semiconductor Equipment — 0.7%        
Advanced Micro Devices, Inc., 7.75%, 8/01/20   190     192,850
KLA-Tencor Corp., 6.90%, 5/01/18   461     524,795
          717,645
Specialty Retail — 1.2%          
AutoNation, Inc., 6.75%, 4/15/18   445     461,688
Best Buy Co., Inc., 5.50%, 3/15/21   150     143,380
Limited Brands, Inc., 7.00%, 5/01/20   230     244,950
QVC, Inc., 7.38%, 10/15/20 (a)   25     27,250
VF Corp., 5.95%, 11/01/17   350     414,480
          1,291,748
Tobacco — 2.0%          
Altria Group, Inc.:          
9.25%, 8/06/19   115     152,876
10.20%, 2/06/39   937     1,447,508
Lorillard Tobacco Co., 3.50%, 8/04/16   600     602,329
          2,202,713
Wireless Telecommunication Services — 3.6%          
America Movil SAB de CV, 2.38%, 9/08/16   585     584,060
American Tower Corp.:          
4.50%, 1/15/18   450     462,846
5.90%, 11/01/21   295     326,046
Cricket Communications, Inc., 7.75%, 5/15/16   155     160,812
Crown Castle International Corp., 9.00%, 1/15/15   210     228,900
Crown Castle Towers LLC (a):          
5.50%, 1/15/37   275     299,543
6.11%, 1/15/40   300     331,498
Digicel Group Ltd., 8.25%, 9/01/17 (a)   125     127,500
Intelsat Jackson Holdings SA, 7.25%, 4/01/19 (a)   50     50,250
Nextel Communications, Inc., Series E, 6.88%, 10/31/13 195     192,562
SBA Tower Trust, 5.10%, 4/15/42 (a)   1,000     1,089,500
Sprint Capital Corp., 6.88%, 11/15/28   110     80,300
          3,933,817
Total Corporate Bonds — 118.4%         128,492,584
 

Preferred Securities
 
Capital Trusts          
Capital Markets — 4.2%          
Ameriprise Financial, Inc., 7.52%, 6/01/66 (b)   500     505,000
State Street Capital Trust III, 5.34% (b)(e)   725     726,232
State Street Capital Trust IV, 1.35%, 6/01/37 (b)   4,740     3,319,991
          4,551,223
           
Capital Trusts   Par
(000)
Value
Commercial Banks — 2.7%          
Barclays Bank Plc (a)(b)(e):          
5.93% USD 425   $ 344,250
7.43% (c)   150     140,250
BNP Paribas, 7.20% (a)(b)(c)(e)   300     247,500
Credit Agricole SA (a)(b)(e):          
6.64% (c)   350     236,425
8.38%   350     308,000
Dresdner Funding Trust I, 8.15%, 6/30/31 (a)   530     413,400
M&T Capital Trust II, 8.28%, 6/01/27   910     919,115
National City Preferred Capital Trust I, 12.00% (b)(e)   300     311,298
          2,920,238
Diversified Financial Services — 2.3%          
ING Capital Funding Trust III, 3.97% (b)(e)   400     338,890
JPMorgan Chase Capital XXIII, 1.29%, 5/15/77 (b)   3,085     2,129,921
          2,468,811
Electric Utilities — 0.4%          
PPL Capital Funding, 6.70%, 3/30/67 (b)   500     482,500
Insurance — 7.4%          
Ace Capital Trust II, 9.70%, 4/01/30   500     648,966
The Allstate Corp., 6.50%, 5/15/67 (b)   500     465,625
American International Group, Inc., 8.18%, 5/15/68 (b)   225     217,125
AXA SA, 6.38% (a)(b)(e)   1,000     747,500
Chubb Corp., 6.38%, 3/29/67 (b)(c)   500     502,500
Farmers Exchange Capital, 7.05%, 7/15/28 (a)(c)   500     542,153
Great-West Life & Annuity Insurance Co.,          
7.15%, 5/16/46 (a)(b)   500     487,500
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(b)   500     607,500
Lincoln National Corp., 7.00%, 5/17/66 (b)(c)   500     470,000
MetLife, Inc., 6.40%, 12/15/66   500     491,169
Reinsurance Group of America, 6.75%, 12/15/65 (b)   700     607,480
Swiss Re Capital I LP, 6.85% (a)(b)(e)   450     405,782
ZFS Finance (USA), Trust II, 6.45%, 12/15/65 (a)(b)   1,800     1,728,000
ZFS Finance (USA), Trust IV, 5.88%, 5/09/32 (a)(b)   146     141,620
          8,062,920
Multi-Utilities — 0.9%          
Dominion Resources Capital Trust I, 7.83%, 12/01/27   500     504,057
Dominion Resources, Inc., 7.50%, 6/30/66 (b)   500     525,000
          1,029,057
Oil, Gas & Consumable Fuels — 1.3%          
Enterprise Products Operating LLC, 8.38%, 8/01/66 (b)   825     853,875
TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b)   500     509,587
          1,363,462
Total Capital Trusts — 19.2%         20,878,211
 

Preferred Stocks
  Shares      
Auto Components — 0.1%          
Dana Holding Corp., 4.00% (a)   1,000     123,750
Commercial Banks — 1.0%          
SG Preferred Capital II, 6.30% (a)(b)   1,000     1,004,687
Diversified Financial Services — 0.3%          
Ally Financial, Inc., 7.00% (a)   440     328,144
Thrifts & Mortgage Finance — 0.0%          
Fannie Mae, Series S, 8.25% (b)(g)   3,000     5,880
Freddie Mac, Series Z, 8.38% (b)(g)   3,000     6,420
          12,300
Wireless Telecommunication Services — 2.9%          
Centaur Funding Corp., 9.08% (a)   2,720     3,144,150
Total Preferred Stocks — 4.3%         4,613,031

See Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201119
  


Schedule of Investments (continued) BlackRock Credit Allocation Income Trust I, Inc. (PSW)
  (Percentages shown are based on Net Assets)

Trust Preferreds  

Shares

Value
Diversified Financial Services — 0.3%          
GMAC Capital Trust I, Series 2, 8.13%, 2/15/40 (b)   16,010     $ 328,614  
Total Trust Preferreds — 0.3%       328,614  
Total Preferred Securities — 23.8%       25,819,856  
 
Taxable Municipal Bonds   Par
(000)
     
Metropolitan Transportation Authority, RB,          
Build America Bonds, 6.55%, 11/15/31 USD 800   903,248  
Total Taxable Municipal Bonds — 0.8%       903,248  
 
 

US Government Sponsored
         
Agency Securities          
Agency Obligations — 0.3%          
Fannie Mae, 4.23%, 10/09/19 (c)(h)   390   294,830  
Total US Government Sponsored Agency Securities — 0.3% 294,830  
 
 

US Treasury Obligations
US Treasury Notes, 2.13%, 8/15/21 (c)   780   776,592  
Total US Treasury Obligations — 0.7%       776,592  
Total Long-Term Investments          
(Cost — $151,118,071) — 144.9%       157,284,431  
 

Short-Term Securities
  Shares   Value
BlackRock Liquidity Funds, TempFund,          
Institutional Class, 0.14% (i)(j)   1,362,932   1,362,932  
Total Short-Term Securities          
(Cost — $1,362,932) — 1.3%       1,362,932  
 
 
Options Purchased   Notional
Amount
(000)
     
Over-the-Counter Put Swaptions — 0.0%          
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 9/16/13, Broker          
Credit Suisse International EUR 1,300   26,527  
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 10/21/13,          
Broker Deutsche Bank AG   1,300   28,902  
Total Options Purchased          
(Cost — $66,622) — 0.0%       55,429  
Total Investments Before Options Written          
(Cost — $152,547,625*) — 146.2%       158,702,792  
 
 

Options Written
Over-the-Counter Call Swaptions — (0.2)%          
Pay a fixed rate of 4.03% and receive a floating rate          
based on 3-month LIBOR, Expires 4/16/12,          
Broker UBS AG USD 1,800   (255,028 )

Options Written   Notional
Amount
(000)
  Value
Over-the-Counter Put Swaptions — (0.0)%            
Receive a fixed rate of 4.03% and pay a floating rate            
based on 3-month LIBOR, Expires 4/16/12,            
Broker UBS AG USD 1,800   $ (2,881 )
Total Options Written            
(Premiums Received — $129,600) — (0.2)%         (257,909 )
Total Investments, Net of Options Written — 146.0%         158,444,883  
Liabilities in Excess of Other Assets — (46.0)%         (49,915,746 )
Net Assets — 100.0%        $ 108,529,137  

The cost and unrealized appreciation (depreciation) of investments as of October 31, 2011, as computed for federal income tax purposes, were as follows: 
Aggregate cost $ 152,469,279  
Gross unrealized appreciation $ 9,163,076  
Gross unrealized depreciation   (2,929,563 )
Net unrealized appreciation $ 6,233,513  

(a) Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. 
(b) Variable rate security. Rate shown is as of report date. 
(c) All or a portion of security has been pledged as collateral in connection with open reverse repurchase agreements. 
(d) Represents a payment-in-kind security which may pay interest/dividends in additional par/shares. 
(e) Security is perpetual in nature and has no stated maturity date. 
(f) When-issued security. Unsettled when-issued transactions were as follows: 
Counterparty Value Unrealized
Appreciation
Barclays Capital, Inc. $128,125 $3,125
JPMorgan Chase Bank NA $  70,350 $   350

(g) Non-income producing security. 
(h) Represents a zero-coupon bond. Rate shown reflects the current yield as of report date. 
(i) Investments in companies considered to be an affiliate of the Fund during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: 
Affiliate Shares
Held at
October 31,
2010
Net
Activity
Shares
Held at
October 31,
2011
Income
BlackRock Liquidity        
Funds, TempFund,
Institutional Class 5,884,098 (4,521,166) 1,362,932 $824

(j) Represents the current yield as of report date. 
• 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 rating group indexes, and/or as defined by Fund management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease. 

See Notes to Financial Statements.

20ANNUAL REPORTOCTOBER 31, 2011
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust I, Inc. (PSW)

• Reverse repurchase agreements outstanding as of October 31, 2011 were as follows: 
Counterparty Interest
Rate
Trade
Date
Maturity
Date1
Net Closing
Amount
Face
Amount
Credit Suisse                
Securities                
(USA) LLC 0.40 % 5/18/11 Open $ 1,041,022 $ 1,039,093
UBS Securities LLC 0.38 % 5/18/11 Open   1,967,462   1,964,000
UBS Securities LLC 0.38 % 5/19/11 Open   873,528   872,000
Credit Suisse                
Securities                
(USA) LLC 0.40 % 5/20/11 Open   1,298,940   1,296,562
UBS Securities LLC 0.35 % 6/08/11 Open   2,227,658   2,224,500
UBS Securities LLC 0.38 % 6/14/11 Open   1,126,663   1,125,000
Credit Suisse                
Securities                
(USA) LLC 0.40 % 6/15/11 Open   1,016,129   1,014,562
UBS Securities LLC 0.37 % 6/27/11 Open   957,919   956,670
Deutsche Bank                
Securities, Inc. 0.36 % 7/01/11 Open   537,210   536,550
Credit Suisse                
Securities                
(USA) LLC 0.35 % 7/05/11 Open   1,290,116   1,288,624
Credit Suisse                
Securities                
(USA) LLC 0.35 % 7/11/11 Open   862,359   861,412
UBS Securities LLC 0.32 % 7/12/11 Open   526,048   525,525
UBS Securities LLC 0.28 % 7/16/11 Open   196,165   196,000
Credit Suisse                
Securities                
(USA) LLC 0.35 % 7/18/11 Open   416,066   415,638
Deutsche Bank                
Securities, Inc. 0.35 % 7/20/11 Open   2,357,006   2,354,625
UBS Securities LLC 0.35 % 8/01/11 Open   872,780   872,000
UBS Securities LLC 0.32 % 8/02/11 Open   382,509   382,200
BNP Paribas                
Securities Corp. 0.03 % 8/04/11 Open   285,209   285,188
Credit Suisse                
Securities                
(USA) LLC 0.40 % 8/05/11 Open   597,584   597,000
BNP Paribas                
Securities Corp. 0.37 % 8/16/11 Open   1,018,656   1,017,850
BNP Paribas                
Securities Corp. 0.37 % 8/17/11 Open   956,447   955,700
Barclays                
Capital, Inc. 0.35 % 8/26/11 Open   557,238   556,875
Barclays                
Capital, Inc. 0.35 % 8/31/11 Open   1,194,470   1,193,750
Credit Suisse                
Securities                
(USA) LLC 0.35 % 9/08/11 Open   1,043,172   1,042,626
Deutsche Bank                
Securities, Inc. 0.35 % 9/08/11 Open   310,413   310,250
UBS Securities LLC 0.37 % 9/08/11 Open   302,418   302,250
Credit Suisse                
Securities                
(USA) LLC 0.35 % 9/09/11 Open   491,253   491,000
Barclays                
Capital, Inc. 0.35 % 9/14/11 Open   1,626,821   1,626,063
Deutsche Bank                
Securities, Inc. 0.35 % 9/14/11 Open   418,495   418,300
UBS Securities LLC 0.35 % 9/14/11 Open   357,167   357,000
UBS Securities LLC 0.38 % 9/14/11 Open   3,690,869   3,689,000

• Reverse repurchase agreements outstanding as of October 31, 2011 were as follows (concluded): 
Counterparty Interest
Rate
Trade
Date
Maturity
Date
Net Closing
Amount
Face
Amount
Barclays                
Capital, Inc. 0.40 % 9/23/11 Open $ 738,320 $ 738,000
Barclays                
Capital, Inc. 0.40 % 9/30/11 Open   748,001   747,736
Deutsche Bank                
Securities, Inc. 0.40 % 10/04/11 Open   591,434   591,250
Deutsche Bank                
Securities, Inc. 0.35 % 10/14/11 Open   1,233,903   1,233,688
Deutsche Bank                
Securities, Inc. 0.38 % 10/20/11 Open   208,526   208,500
Barclays                
Capital, Inc. 0.40 % 10/26/11 Open   4,293,701   4,293,415
BNP Paribas                
Securities Corp. 0.40 % 10/26/11 Open   9,757,010   9,756,360
Deutsche Bank                
Securities, Inc. 0.40 % 10/26/11 Open   2,955,546   2,955,350
Credit Suisse                
Securities                
(USA) LLC 0.35 % 10/27/11 Open   1,197,526   1,197,468
BNP Paribas                
Securities Corp. 0.08 % 10/31/11 Open   778,051   778,051
Total         $ 53,301,810 $ 53,267,631

Certain agreements have no stated maturity and can be terminated by either party at anytime. 
• Financial futures contracts sold as of October 31, 2011 were as follows: 
Contracts Issue Exchange Expiration Notional
Value
  Unrealized
Appreciation
(Depreciation)
95 Euro-Schatz Eurex December          
      2011 EUR 10,421,025   $   (8,689 )
1 German Euro Chicago December          
  Bund Mercantile 2011 EUR      135,470     (306 )
219 10-Year US Chicago Board December          
  Treasury Note of Trade 2011 USD 28,264,688     49,508  
13 Ultra US Chicago Board December          
  Treasury Bond of Trade 2011 USD   1,980,875     82,070  
Total       $ 122,583  

• Foreign currency exchange contracts as of October 31, 2011 were as follows: 
Currency
Purchased
Currency
Sold
Counterparty Settlement
Date
Unrealized
Depreciation
USD 342,375 EUR 249,000 Citibank NA 1/25/12 $ (1,979 )
USD 33,064 EUR 24,000 Deutsche Bank AG 1/25/12   (127 )
Total           $ (2,106 )

See Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201121
  


Schedule of Investments (continued) BlackRock Credit Allocation Income Trust I, Inc. (PSW)

Credit default swaps on single-name issues — buy protection outstanding as of October 31, 2011 were as follows:

Issuer Pay
Fixed
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Appreciation
(Depreciation)
Raytheon Co. 1.00 % Citibank NA 9/20/16 USD 225 $ 1,272  
      Deutsche          
Raytheon Co. 1.00 % Bank AG 9/20/16 USD 270   (212 )
General     JPMorgan          
Dynamics     Chase          
Corp. 1.00 % & Co. 9/20/16 USD 625   5,383  
Computer     Morgan Stanley          
Sciences Corp. 1.00 % & Co., Inc. 9/20/16 USD 275   1,295  
General                
Dynamics     Morgan Stanley          
Corp. 1.00 % & Co., Inc. 9/20/16 USD 400   1,225  
      Morgan Stanley          
Raytheon Co. 1.00 % & Co., Inc. 9/20/16 USD 150   (187 )
      Barclays          
Dell, Inc. 1.00 % Bank Plc 12/20/16 USD 630   (4,234 )
      Credit Suisse          
Computer     Securities          
Sciences Corp. 1.00 % (USA) LLC 12/20/16 USD 280   (5,686 )
Lockheed     Deutsche          
Martin Corp. 1.00 % Bank AG 12/20/16 USD 750   7,956  
STMicroelectronics     Deutsche          
NV 1.00 % Bank AG 12/20/16 EUR  285   (348 )
Southwest     Goldman Sachs          
Airlines Co. 1.00 Capital Markets LP   12/20/16 USD 280   (66 )
Southwest     Royal Bank          
Airlines Co. 1.00 % of Scotland Plc 12/20/16 USD 280   (1,272 )
Total           $ 5,126  

Credit default swaps on single-name issues — sold protection outstanding as of October 31, 2011 were as follows:

 
Issuer Pay
Fixed
Rate

Counterparty
Expiration
Date
Issuer
Credit
Rating1
Notional
Amount
(000)2
Appreciation
(Depreciation)
      Deutsche            
Aviva USA Corp. 1.00 % Bank AG 5/25/12 AA- USD 650 $ 1,175  
Assured                  
Guaranty Corp. 5.00 % Citibank NA 12/20/14 AA+ USD   40   (223 )
Assured                  
Guaranty Corp. 5.00 % Citibank NA 3/20/15 AA+ USD 185   296  
      Deutsche            
MetLife, Inc. 1.00 % Bank AG 3/20/18 A+ USD 200   (9,776 )
Total             $ (8,528 )

Using S&P’s rating. 
The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement. 
• Credit default swaps on traded indexes — buy protection outstanding as of October 31, 2011 were as follows: 
Issuer Pay
Fixed
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Depreciation
Dow Jones CDX          
North America     JPMorgan    
High Yield Index     Chase    
Series 17 5.00 % Bank & Co. 12/20/16 USD 1,050 $(100,610)

Interest rate swaps outstanding as of October 31, 2011 were as follows:

Fixed
Rate
Floating
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Appreciation
(Depreciation)
1.43%(b) 3-month              
  LIBOR Deutsche Bank AG 9/13/13 EUR 10,600 $ (8,635 )
2.72%(b) 3-month              
  LIBOR Deutsche Bank AG 8/08/21 USD 1,400   52,236  
4.35%(a) 3-month              
  LIBOR Deutsche Bank AG 4/15/41 USD 600   (167,211 )
3.93%(a) 3-month              
  LIBOR Citibank NA 7/21/41 USD 1,600   (311,632 )
3.01%(b) 3-month              
  LIBOR Deutsche Bank AG 9/13/41 USD 200   1,780  
2.63%(b) 3-month              
  LIBOR Deutsche Bank AG 9/26/41 USD 400   (27,485 )
2.81%(a) 3-month Credit Suisse            
  LIBOR Securities (USA) LLC 10/11/41 USD 400   13,186  
3.00%(a) 3-month Credit Suisse            
  LIBOR Securities (USA) LLC 10/18/41 USD 300   (1,882 )
Total           $ (449,643 )

(a) Fund pays a fixed interest rate and receives floating rate.  
(b) Fund pays a floating interest rate and receives fixed rate.  
• Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows: 
• Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities 
• Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs) 
• Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)  

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and does not necessarily correspond to the Fund’s perceived risk of investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

See Notes to Financial Statements.

22ANNUAL REPORTOCTOBER 31, 2011
 

Schedule of Investments (concluded) BlackRock Credit Allocation Income Trust I, Inc. (PSW)

The following tables summarize the inputs used as of October 31, 2011 in determining the fair valuation of the Fund’s investments and derivative financial instruments:

Valuation Inputs Level 1 Level 2 Level 3   Total  
Assets:                        
Investments:                        
Long-Term                        
Investments:                        
Asset-Backed                        
Securities     $ 493,571   $ 503,750   $ 997,321  
Corporate                        
Bonds       127,634,584     858,000     128,492,584  
Preferred                        
Securities $ 340,913     25,478,943         25,819,856  
Taxable                        
Municipal                        
Bonds       903,248         903,248  
US Government                        
Sponsored                        
Agency                        
Securities       294,830         294,830  
US Treasury                        
Obligations       776,592         776,592  
Short-Term                        
Securities   1,362,932             1,362,932  
Total $ 1,703,845   $ 155,581,768   $ 1,361,750   $ 158,647,363   
 
             
Valuation Inputs Level 1 Level 2   Level 3   Total
Derivative Financial Instruments1                  
Assets:                        
Interest rate                        
contracts $ 131,578   $ 122,631       $ 254,209  
Credit                        
contracts       17,427   $ 1,175     18,602  
Liabilities:                        
Interest rate                        
contracts   (8,995 )   (774,754 )       (783,749 )
Foreign currency                        
exchange                        
contracts       (2,106 )       (2,106 )
Credit                        
contracts       (122,614 )       (122,614 )
Total $ 122,583   $ (759,416 ) $ 1,175   $ (635,658 )

Derivative financial instruments are swaps, financial futures contracts, foreign currency exchange contracts and options. Swaps, financial futures contracts and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value. 

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

  Asset-Backed
Securities
Corporate
Bonds
Total
Assets:                
Balance, as of October 31, 2010          
Accrued discounts/premiums          
Net realized gain (loss)          
Net change in unrealized appreciation/depreciation2 $ (52,364 ) $ 33,000 $ (19,364 )
Purchases   556,114     825,000   1,381,114  
Sales          
Transfers in3          
Transfers out3          
Balance, as of October 31, 2011 $ 503,750   $ 858,000 $ 1,361,750  

Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The net change in unrealized appreciation/depreciation on investments still held at October 31, 2011 was $(19,364). 
The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the period of the event or the change in circumstances that caused the transfer. 

The following is a reconciliation of Level 3 derivative financial instruments for which significant unobservable inputs were used to determine fair value:

  Credit
Contracts
Assets:      
Balance, as of October 31, 2010    
Accrued discounts/premiums $ 1,984  
Net realized gain (loss)    
Net change in unrealized appreciation/depreciation4   1,175  
Purchases    
Issuances5   3,440  
Sales    
Settlements6   (5,424 )
Transfers in3    
Transfers out3    
Balance, as of October 31, 2011 $ 1,175  

Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on derivative financial instruments still held at October 31, 2011 was $1,175. 
Issuances represent upfront cash received on certain derivative financial instruments. 
Settlements represent periodic contractual cash flows and/or cash flows to terminate certain derivative financial instruments. 

A reconciliation of Level 3 investments and derivative financial instruments is presented when the Fund had a significant amount of Level 3 investments and derivative financial instruments at the beginning and/or end of the year in relation to net assets.  

See Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201123
  


Schedule of Investments October 31, 2011 BlackRock Credit Allocation Income Trust II, Inc. (PSY)
  (Percentages shown are based on Net Assets)

Asset-Backed Securities   Par
(000)
  Value
Atrium CDO Corp., Series 5A, Class A4,          
0.69%, 7/20/20 (a)(b) USD 2,650   $ 2,053,750
SLM Student Loan Trust, Series 2004-B, Class A2,          
0.55%, 6/15/21 (b)   2,170     2,077,112
Total Asset-Backed Securities — 0.9%         4,130,862
 

Corporate Bonds
Aerospace & Defense — 1.9%          
BE Aerospace, Inc., 8.50%, 7/01/18   2,500     2,731,250
Bombardier, Inc., 7.75%, 3/15/20 (a)   3,205     3,525,500
Huntington Ingalls Industries, Inc. (a):          
6.88%, 3/15/18   610     614,575
7.13%, 3/15/21   600     607,500
Kratos Defense & Security Solutions, Inc.,          
10.00%, 6/01/17   1,014     1,049,490
          8,528,315
Airlines — 1.0%          
American Airlines Pass-Through Trust:          
Series 2011-1, Class A, 5.25%, 7/31/22   1,408     1,281,203
Series 2011-2, Class A, 8.63%, 4/15/23   570     570,000
Continental Airlines Pass-Through Certificates,          
Series 2009-2, Class B, 9.25%, 5/10/17   1,453     1,493,424
Delta Air Lines, Inc., Series 02G1, 6.72%, 7/02/24   1,146     1,131,963
          4,476,590
Auto Components — 1.5%          
Daimler Finance North America LLC, 2.63%, 9/15/16 (a)(c) 3,425     3,404,015
Delphi Corp., 6.13%, 5/15/21 (a)   570     581,400
Icahn Enterprises LP:          
7.75%, 1/15/16   880     902,000
8.00%, 1/15/18   2,000     2,035,000
          6,922,415
Beverages — 0.5%          
Constellation Brands, Inc., 7.25%, 5/15/17   1,970     2,167,000
Building Products — 0.3%          
Building Materials Corp. of America (a):          
7.00%, 2/15/20   375     397,500
6.75%, 5/01/21   1,160     1,203,500
          1,601,000
Capital Markets — 5.5%          
Ameriprise Financial, Inc., 5.30%, 3/15/20 (c)   3,250     3,541,723
E*Trade Financial Corp., 12.50%, 11/30/17 (d)   1,865     2,149,412
The Goldman Sachs Group, Inc.:          
5.25%, 7/27/21   2,900     2,927,272
6.25%, 2/01/41 (c)   4,450     4,588,871
Macquarie Bank Ltd., 6.63%, 4/07/21 (a)(c)   1,745     1,709,072
Morgan Stanley (c):          
5.75%, 1/25/21   3,915     3,866,427
5.50%, 7/28/21   1,910     1,865,560
UBS AG:          
2.25%, 1/28/14   1,627     1,621,268
5.88%, 7/15/16 (c)   2,800     2,892,512
          25,162,117
Chemicals — 1.0%          
Ashland, Inc., 9.13%, 6/01/17   505     564,338
Celanese US Holdings LLC, 5.88%, 6/15/21   1,545     1,641,562
Lyondell Chemical Co., 11.00%, 5/01/18   1,250     1,392,188
Solutia, Inc., 7.88%, 3/15/20   860     920,200
          4,518,288
Commercial Banks — 4.9%          
Amsouth Bank, Series AI, 4.85%, 4/01/13   1,050     1,010,625
Asciano Finance Ltd., 5.00%, 4/07/18 (a)   900     956,833
           
Corporate Bonds   Par
(000)
    Value
Commercial Banks (concluded)          
Associated Banc-Corp, 5.13%, 3/28/16 USD 2,200   $ 2,269,958
BNP Paribas, 3.60%, 2/23/16 (c)   998     995,203
Branch Banking & Trust Co. (b)(c):          
0.66%, 9/13/16   1,100     1,019,176
0.60%, 5/23/17   675     612,830
CIT Group, Inc.:          
7.00%, 5/01/15   260     260,000
7.00%, 5/02/16 (a)   1,570     1,566,075
7.00%, 5/01/17   1,263     1,263,000
7.00%, 5/02/17 (a)   350     349,125
City National Corp., 5.25%, 9/15/20 (c)   2,350     2,395,733
Discover Bank, 8.70%, 11/18/19   1,200     1,357,248
HSBC Holdings Plc, 5.10%, 4/05/21 (c)   1,625     1,750,235
Regions Financial Corp.:          
4.88%, 4/26/13   2,525     2,461,875
5.75%, 6/15/15   1,800     1,732,500
SVB Financial Group, 5.38%, 9/15/20   2,300     2,373,490
          22,373,906
Commercial Services & Supplies — 3.8%          
Aviation Capital Group Corp. (a):          
7.13%, 10/15/20 (c)   9,300     9,001,917
6.75%, 4/06/21   2,325     2,238,766
Casella Waste Systems, Inc., 7.75%, 2/15/19   721     692,160
Clean Harbors, Inc., 7.63%, 8/15/16   1,314     1,389,555
Corrections Corp. of America, 7.75%, 6/01/17   3,375     3,653,438
Iron Mountain, Inc., 7.75%, 10/01/19   390     404,625
Mobile Mini, Inc., 7.88%, 12/01/20   275     275,000
          17,655,461
Communications Equipment — 0.9%          
Avaya, Inc., 9.75%, 11/01/15   900     796,500
Brocade Communications Systems, Inc., 6.88%, 1/15/20 2,965     3,105,838
EH Holding Corp., 6.50%, 6/15/19 (a)   420     429,450
          4,331,788
Consumer Finance — 4.2%          
American Express Credit Corp., 2.75%, 9/15/15 (c)   5,850     5,922,920
Capital One Bank USA NA, 8.80%, 7/15/19   3,325     3,949,475
Ford Motor Credit Co., LLC, 7.00%, 4/15/15   2,580     2,812,200
Inmarsat Finance Plc, 7.38%, 12/01/17 (a)   1,815     1,942,050
SLM Corp., 6.25%, 1/25/16   4,870     4,870,000
          19,496,645
Containers & Packaging — 1.4%          
Ball Corp.:          
7.13%, 9/01/16   1,750     1,894,375
6.75%, 9/15/20   2,210     2,381,275
Crown Americas LLC, 6.25%, 2/01/21 (a)   825     866,250
Graphic Packaging International, Inc., 9.50%, 6/15/17 665     726,512
Rock-Tenn Co., 9.25%, 3/15/16   325     345,313
Sealed Air Corp., 8.38%, 9/15/21 (a)   130     140,725
          6,354,450
Diversified Financial Services — 7.8%          
Ally Financial, Inc.:          
4.50%, 2/11/14   1,775     1,735,062
8.30%, 2/12/15   1,230     1,291,500
8.00%, 11/01/31   1,620     1,615,950
Bank of America Corp.:          
5.30%, 3/15/17 (c)   3,640     3,480,892
5.00%, 5/13/21   50     46,946
Citigroup, Inc.:          
6.38%, 8/12/14   1,300     1,403,407
4.59%, 12/15/15 (c)   975     1,018,696
Dolphin Subsidiary II, Inc., 7.25%, 10/15/21 (a)   890     954,525
General Electric Capital Corp., 5.30%, 2/11/21 (c)   4,600     4,895,610
General Motors Financial Co., Inc., 6.75%, 6/01/18 (a) 500     504,576
ING Bank NV, 5.00%, 6/09/21 (a)(c)   2,350     2,412,087

See Notes to Financial Statements.

24ANNUAL REPORTOCTOBER 31, 2011
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust II, Inc. (PSY)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Diversified Financial Services (concluded)          
Intesa Sanpaolo SpA (c):          
2.38%, 12/21/12 USD 3,500   $ 3,408,608
6.50%, 2/24/21 (a)   600     553,624
JPMorgan Chase & Co., 3.15%, 7/05/16 (c)   4,075     4,081,915
Moody’s Corp., 6.06%, 9/07/17   6,000     6,342,174
Reynolds Group Issuer, Inc. (a):          
7.13%, 4/15/19   245     249,900
7.88%, 8/15/19   870     909,150
6.88%, 2/15/21   215     217,150
8.25%, 2/15/21   485     444,988
WMG Acquisition Corp., 9.50%, 6/15/16 (a)   205     217,300
          35,784,060
Diversified Telecommunication Services — 5.4%          
AT&T, Inc., 6.30%, 1/15/38 (c)   4,000     4,806,916
France Telecom SA, 4.13%, 9/14/21   675     695,404
Level 3 Financing, Inc.:          
8.75%, 2/15/17   675     690,188
8.13%, 7/01/19 (a)   2,489     2,464,110
Qwest Corp., 8.38%, 5/01/16   2,795     3,193,287
Telecom Italia Capital SA, 6.18%, 6/18/14   975     990,404
Telefonica Emisiones SAU, 5.46%, 2/16/21   1,360     1,378,365
Verizon Communications, Inc.:          
1.95%, 3/28/14 (c)   3,650     3,748,189
7.35%, 4/01/39   4,025     5,556,339
Windstream Corp., 7.88%, 11/01/17   1,150     1,242,000
          24,765,202
Electric Utilities — 1.1%          
Progress Energy, Inc., 7.00%, 10/30/31 (c)   4,000     5,245,584
Electronic Equipment, Instruments & Components — 0.8%        
Jabil Circuit, Inc., 8.25%, 3/15/18   800     928,000
NXP BV, 3.15%, 10/15/13 (b)   2,950     2,891,000
          3,819,000
Energy Equipment & Services — 1.2%          
Ensco Plc, 4.70%, 3/15/21 (c)   1,965     2,067,565
Frac Tech Services LLC, 7.63%, 11/15/18 (a)   1,085     1,133,825
Key Energy Services, Inc., 6.75%, 3/01/21   745     761,763
MEG Energy Corp., 6.50%, 3/15/21 (a)   955     995,587
Oil States International, Inc., 6.50%, 6/01/19   505     528,988
SunCoke Energy, Inc., 7.63%, 8/01/19 (a)   190     191,900
          5,679,628
Food & Staples Retailing — 2.4%          
CVS Caremark Corp., 6.30%, 6/01/62 (b)   3,650     3,545,062
Wal-Mart Stores, Inc. (c):          
5.25%, 9/01/35   2,500     2,913,065
6.20%, 4/15/38   3,375     4,400,764
          10,858,891
Food Products — 1.0%          
Kraft Foods, Inc.:          
6.50%, 8/11/17   1,665     1,990,176
6.13%, 8/23/18   1,660     1,975,415
Smithfield Foods, Inc., 10.00%, 7/15/14   374     434,775
          4,400,366
Gas Utilities — 0.1%          
Targa Resources Partners LP, 6.88%, 2/01/21 (a)   495     488,813
Health Care Equipment & Supplies — 0.7%          
Fresenius US Finance II, Inc., 9.00%, 7/15/15 (a)   2,250     2,542,500
Teleflex, Inc., 6.88%, 6/01/19   490     507,150
          3,049,650
Health Care Providers & Services — 4.3%          
Aetna, Inc., 6.75%, 12/15/37 (c)   1,700     2,163,106
Aviv Healthcare Properties LP, 7.75%, 2/15/19   460     443,900

Corporate Bonds   Par
(000)
  Value
Health Care Providers & Services (concluded)          
HCA, Inc.:          
8.50%, 4/15/19 USD 240   $ 264,000
6.50%, 2/15/20   2,380     2,493,050
7.25%, 9/15/20   3,435     3,679,744
7.50%, 2/15/22   2,020     2,060,400
INC Research LLC, 11.50%, 7/15/19 (a)   695     625,500
inVentiv Health, Inc., 10.00%, 8/15/18 (a)   510     489,600
Tenet Healthcare Corp.:          
10.00%, 5/01/18   1,530     1,755,675
8.88%, 7/01/19   1,125     1,271,250
UnitedHealth Group, Inc., 6.88%, 2/15/38   3,400     4,483,430
          19,729,655
Household Durables — 0.3%          
Cemex Espana Luxembourg, 9.25%, 5/12/20 (a)   1,462     1,158,635
Independent Power Producers & Energy Traders — 1.3%          
AES Corp.:          
9.75%, 4/15/16   985     1,117,975
7.38%, 7/01/21 (a)   325     347,750
Calpine Construction Finance Co. LP, 8.00%,          
6/01/16 (a)   535     569,775
Calpine Corp., 7.25%, 10/15/17 (a)   440     457,600
Energy Future Intermediate Holding Co., LLC,          
10.00%, 12/01/20   1,745     1,832,250
NRG Energy, Inc., 7.38%, 1/15/17   1,710     1,780,537
          6,105,887
Insurance — 8.3%          
Allianz Finance II BV, 5.75%, 7/08/41 (b) EUR 700     867,169
The Allstate Corp., 7.45%, 5/16/19 (c) USD 5,600     6,963,757
American International Group, Inc.,          
6.40%, 12/15/20 (c)   1,690     1,770,017
Aon Corp., 5.00%, 9/30/20 (c)   4,600     5,041,016
Fairfax Financial Holdings Ltd., 5.80%, 5/15/21 (a)   2,800     2,638,549
Forethought Financial Group, Inc., 8.63%, 4/15/21 (a)   1,000     1,015,846
Genworth Financial, Inc., 7.63%, 9/24/21   970     876,812
Manulife Financial Corp., 4.90%, 9/17/20 (c)   4,700     4,827,379
MPL 2 Acquisition Canco, Inc., 9.88%, 8/15/18 (a)   430     369,800
Muenchener Rueckversicherungs AG,          
6.00%, 5/26/41 (b) EUR 300     399,239
Northwestern Mutual Life Insurance,          
6.06%, 3/30/40 (a) USD 3,800     4,453,520
Principal Financial Group, Inc., 8.88%, 5/15/19   980     1,241,662
Prudential Financial, Inc., 6.63%, 12/01/37 (c)   3,400     4,042,855
XL Group Ltd., 5.75%, 10/01/21 (c)   3,430     3,616,602
          38,124,223
IT Services — 0.7%          
Eagle Parent Canada, Inc., 8.63%, 5/01/19 (a)   720     673,200
First Data Corp. (a):          
7.38%, 6/15/19   725     717,750
8.25%, 1/15/21   90     85,500
12.63%, 1/15/21   905     855,225
SunGard Data Systems, Inc., 7.38%, 11/15/18   970     991,825
          3,323,500
Life Sciences Tools & Services — 1.9%          
Bio-Rad Laboratories, Inc., 8.00%, 9/15/16   3,825     4,169,250
Life Technologies Corp., 6.00%, 3/01/20 (c)   4,200     4,681,072
          8,850,322
Machinery — 1.1%          
Ingersoll-Rand Global Holding Co. Ltd., 9.50%, 4/15/14 (c) 3,400     3,996,829
Navistar International Corp., 8.25%, 11/01/21   931     1,012,463
          5,009,292

See Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201125
  


Schedule of Investments (continued) BlackRock Credit Allocation Income Trust II, Inc. (PSY)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
Value
Media — 9.3%          
AMC Networks, Inc., 7.75%, 7/15/21 (a) USD 395   $ 428,575
CCH II LLC, 13.50%, 11/30/16   2,317     2,670,342
Cengage Learning Acquisitions, Inc.,          
10.50%, 1/15/15 (a)   700     553,000
Comcast Corp., 6.30%, 11/15/17 (c)   3,400     4,017,022
Cox Communications, Inc., 8.38%, 3/01/39 (a)   3,400     4,754,193
CSC Holdings LLC:          
8.50%, 4/15/14   680     746,300
8.50%, 6/15/15   1,500     1,627,500
8.63%, 2/15/19   1,200     1,362,000
DIRECTV Holdings LLC, 5.00%, 3/01/21   2,575     2,818,822
DISH DBS Corp., 7.00%, 10/01/13   1,750     1,850,625
Intelsat Luxembourg SA (d):          
11.50%, 2/04/17 (a)   140     140,000
11.50%, 2/04/17   400     400,000
The Interpublic Group of Cos., Inc., 10.00%, 7/15/17 1,175     1,345,375
Kabel BW Erste Beteiligungs GmbH, 7.50%, 3/15/19 (a) 1,040     1,081,600
News America, Inc., 6.15%, 3/01/37 (c)   4,200     4,612,528
Time Warner Cable, Inc., 6.75%, 6/15/39   4,050     4,922,759
Time Warner, Inc., 7.70%, 5/01/32   4,150     5,403,968
Unitymedia Hessen GmbH & Co. KG (FKA UPC          
Germany GmbH), 8.13%, 12/01/17 (a)   1,030     1,096,950
Virgin Media Secured Finance Plc, 6.50%, 1/15/18   2,675     2,882,312
          42,713,871
Metals & Mining — 2.6%          
Alcoa, Inc., 5.40%, 4/15/21 (c)   2,455     2,432,561
Barrick Gold Corp., 2.90%, 5/30/16   1,150     1,194,001
Barrick North America Finance LLC, 5.70%, 5/30/41 1,325     1,539,975
FMG Resources August 2006 Property Ltd. (a):          
6.88%, 2/01/18   235     225,600
8.25%, 11/01/19   190     191,900
Freeport-McMoRan Corp., 7.13%, 11/01/27   2,900     3,369,641
Novelis, Inc., 8.75%, 12/15/20   975     1,062,750
Teck Resources Ltd., 10.75%, 5/15/19 (c)   1,750     2,161,250
          12,177,678
Multi-Utilities — 1.6%          
CenterPoint Energy, Inc.:          
5.95%, 2/01/17   3,150     3,547,177
6.50%, 5/01/18   3,350     3,902,881
          7,450,058
Multiline Retail — 1.3%          
JC Penney Co., Inc., 5.65%, 6/01/20   6,300     5,937,750
Oil, Gas & Consumable Fuels — 13.0%          
Alpha Natural Resources, Inc.:          
6.00%, 6/01/19   255     253,088
6.25%, 6/01/21   705     696,188
Anadarko Petroleum Corp.:          
5.95%, 9/15/16   994     1,142,322
6.38%, 9/15/17   23     27,065
Arch Coal, Inc. (a):          
7.00%, 6/15/19   220     227,700
7.25%, 6/15/21   720     741,600
BP Capital Markets Plc (c):          
3.88%, 3/10/15   1,500     1,605,862
3.20%, 3/11/16   1,875     1,969,978
Buckeye Partners LP, 4.88%, 2/01/21   1,000     1,053,169
Chesapeake Energy Corp., 6.13%, 2/15/21   3,445     3,608,637
Chesapeake Midstream Partners LP, 5.88%, 4/15/21 (a) 595     600,950
Chesapeake Oilfield Operating LLC, 6.63%, 11/15/19 (a) 270     277,425
Consol Energy, Inc., 6.38%, 3/01/21 (a)   450     447,750
Copano Energy LLC, 7.13%, 4/01/21   560     572,600
DCP Midstream LLC, 4.75%, 9/30/21 (a)   1,200     1,252,478
Denbury Resources, Inc., 6.38%, 8/15/21   575     592,250
El Paso Corp., 7.00%, 6/15/17   1,430     1,601,600

Corporate Bonds   Par
(000)
Value
Oil, Gas & Consumable Fuels (concluded)          
El Paso Pipeline Partners Operating Co., LLC,          
5.00%, 10/01/21 USD 525   $ 538,374
Enbridge Energy Partners LP, 9.88%, 3/01/19   2,100     2,812,517
Energy XXI Gulf Coast, Inc., 7.75%, 6/15/19   1,025     1,035,250
Enterprise Products Operating LLC, 6.65%, 4/15/18   4,200     4,940,636
Forest Oil Corp., 8.50%, 2/15/14   1,240     1,339,200
Hilcorp Energy I LP, 7.75%, 11/01/15 (a)   710     728,389
Kinder Morgan Energy Partners LP, 6.85%, 2/15/20   4,200     5,018,605
Linn Energy LLC, 7.75%, 2/01/21   955     1,019,463
Marathon Petroleum Corp., 3.50%, 3/01/16 (a)   1,375     1,410,545
MarkWest Energy Partners LP, 6.25%, 6/15/22 (e)   530     543,250
Newfield Exploration Co., 5.75%, 1/30/22   495     524,700
Oasis Petroleum, Inc.:          
7.25%, 2/01/19 (a)   340     358,700
6.50%, 11/01/21 (e)   305     306,525
OGX Petroleo e Gas Participacoes SA, 8.50%, 6/01/18 (a) 1,200     1,188,000
ONEOK Partners LP, 8.63%, 3/01/19   3,400     4,396,220
Petrobras International Finance Co., 3.88%, 1/27/16   3,725     3,811,796
Petrohawk Energy Corp.:          
10.50%, 8/01/14   615     689,569
6.25%, 6/01/19   715     807,950
Pioneer Natural Resources Co.:          
6.65%, 3/15/17   650     705,933
6.88%, 5/01/18   490     529,845
Plains Exploration & Production Co.:          
7.75%, 6/15/15   785     814,438
10.00%, 3/01/16   405     449,550
Precision Drilling Corp., 6.50%, 12/15/21 (a)   425     448,375
Premier Oil, 5.00%, 6/09/18   3,400     3,536,000
Range Resources Corp., 6.75%, 8/01/20   855     949,050
SandRidge Energy, Inc., 7.50%, 3/15/21 (a)   720     694,800
SM Energy Co., 6.63%, 2/15/19 (a)   220     222,200
Western Gas Partners LP, 5.38%, 6/01/21   1,525     1,621,746
The Williams Cos., Inc., 8.75%, 3/15/32   1,150     1,565,715
          59,678,003
Paper & Forest Products — 2.9%          
Boise Paper Holdings LLC, 8.00%, 4/01/20   645     678,862
Georgia-Pacific LLC, 8.25%, 5/01/16 (a)   3,400     3,770,053
International Paper Co.:          
7.50%, 8/15/21   3,325     4,040,819
7.30%, 11/15/39   3,400     3,964,584
Longview Fibre Paper & Packaging, Inc., 8.00%, 6/01/16 (a) 330     334,950
Verso Paper Holdings LLC, 11.50%, 7/01/14   355     372,750
          13,162,018
Pharmaceuticals — 7.5%          
Bristol-Myers Squibb Co., 5.88%, 11/15/36 (c)   2,214     2,812,814
Capsugel Finance Co. SCA, 9.88%, 8/01/19 (a) EUR 300     423,412
GlaxoSmithKline Capital, Inc., 6.38%, 5/15/38 (c) USD 7,250     9,799,629
Merck & Co., Inc. (c):          
6.50%, 12/01/33   2,070     2,831,129
6.55%, 9/15/37   4,572     6,364,956
Pfizer, Inc., 7.20%, 3/15/39 (c)   6,250     9,335,337
Valeant Pharmaceuticals International, 6.50%, 7/15/16 (a) 250     250,000
Watson Pharmaceuticals, Inc., 6.13%, 8/15/19   2,075     2,423,930
          34,241,207
Real Estate Investment Trusts (REITs) — 2.8%          
AvalonBay Communities, Inc., 6.10%, 3/15/20   3,400     3,857,994
Developers Diversified Realty Corp.:          
4.75%, 4/15/18   645     606,981
7.88%, 9/01/20   775     838,861
ERP Operating LP, 5.75%, 6/15/17 (c)   3,405     3,805,363
HCP, Inc., 5.38%, 2/01/21   1,025     1,052,710
UDR, Inc., 4.25%, 6/01/18   1,475     1,516,731
Ventas Realty LP/Ventas Capital Corp., 4.75%, 6/01/21   1,135     1,111,449
          12,790,089

See Notes to Financial Statements.

26ANNUAL REPORTOCTOBER 31, 2011
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust II, Inc. (PSY)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Real Estate Management & Development — 0.2%          
Realogy Corp., 7.88%, 2/15/19 (a) USD 570   $ 513,000
Shea Homes LP, 8.63%, 5/15/19 (a)   480     434,400
          947,400
Road & Rail — 1.6%          
Avis Budget Car Rental LLC, 8.25%, 1/15/19   435     433,912
Florida East Coast Railway Corp., 8.13%, 2/01/17   200     200,000
The Hertz Corp., 6.75%, 4/15/19   933     951,660
Norfolk Southern Corp., 6.00%, 3/15/2105 (c)   5,000     5,783,350
          7,368,922
Semiconductors & Semiconductor Equipment — 0.6%        
Advanced Micro Devices, Inc., 7.75%, 8/01/20   775     786,625
KLA-Tencor Corp., 6.90%, 5/01/18   1,928     2,194,802
          2,981,427
Specialty Retail — 1.2%          
AutoNation, Inc., 6.75%, 4/15/18   1,965     2,038,688
Best Buy Co., Inc., 5.50%, 3/15/21   550     525,727
Limited Brands, Inc., 7.00%, 5/01/20   980     1,043,700
QVC, Inc., 7.38%, 10/15/20 (a)   105     114,450
VF Corp., 5.95%, 11/01/17   1,475     1,746,736
          5,469,301
Tobacco — 2.0%          
Altria Group, Inc.:          
9.25%, 8/06/19   485     644,737
10.20%, 2/06/39   3,929     6,069,649
Lorillard Tobacco Co., 3.50%, 8/04/16   2,450     2,459,508
          9,173,894
Wireless Telecommunication Services — 3.6%          
America Movil SAB de CV, 2.38%, 9/08/16   2,675     2,670,701
American Tower Corp.:          
4.50%, 1/15/18   1,925     1,979,951
5.90%, 11/01/21   1,295     1,431,287
Cricket Communications, Inc., 7.75%, 5/15/16   670     695,125
Crown Castle International Corp., 9.00%, 1/15/15   890     970,100
Crown Castle Towers LLC (a):          
5.50%, 1/15/37   1,175     1,279,864
6.11%, 1/15/40   1,300     1,436,491
Intelsat Jackson Holdings SA, 7.25%, 4/01/19 (a)   190     190,950
Nextel Communications, Inc., Series E, 6.88%, 10/31/13 840     829,500
SBA Tower Trust, 5.10%, 4/15/42 (a)   4,225     4,603,138
Sprint Capital Corp., 6.88%, 11/15/28   470     343,100
          16,430,207
Total Corporate Bonds — 115.5%         530,502,508
 

Preferred Securities
Capital Trusts          
Capital Markets — 4.0%          
Ameriprise Financial, Inc., 7.52%, 6/01/66 (b)   2,500     2,525,000
State Street Capital Trust III, 5.34% (b)(f)   2,920     2,924,964
State Street Capital Trust IV, 1.35%, 6/01/37 (b)   18,235     12,772,159
          18,222,123
Commercial Banks — 5.4%          
Barclays Bank Plc, 7.43% (a)(b)(c)(f)   650     607,750
BNP Paribas, 7.20% (a)(b)(c)(f)   1,500     1,237,500
Credit Agricole SA (a)(b)(c)(f):          
6.64%   1,475     996,363
8.38%   1,475     1,298,000
Dresdner Funding Trust I, 8.15%, 6/30/31 (a)   2,240     1,747,200
           
Capital Trusts   Par
(000)
  Value
Commercial Banks (concluded)          
HSBC Capital Funding LP/Jersey Channel Islands,          
10.18% (a)(b)(c)(f) USD 4,835   $ 6,055,837
M&T Capital Trust II, 8.28%, 6/01/27   3,630     3,666,358
National City Preferred Capital Trust I, 12.00% (b)(f)   1,100     1,141,426
NationsBank Capital Trust III, 0.95%, 1/15/27 (b)   13,470     8,021,708
          24,772,142
Diversified Financial Services — 1.7%          
ING Capital Funding Trust III, 3.97% (b)(f)   1,800     1,525,003
JPMorgan Chase Capital XXIII, 1.29%, 5/15/77 (b)(c)   8,775     6,058,365
          7,583,368
Electric Utilities — 0.6%          
PPL Capital Funding, 6.70%, 3/30/67 (b)   3,000     2,895,000
Insurance — 8.6%          
Ace Capital Trust II, 9.70%, 4/01/30   2,500     3,244,830
The Allstate Corp., 6.50%, 5/15/67 (b)   5,000     4,656,250
American General Capital II, 8.50%, 7/01/30   100     98,000
American International Group, Inc., 8.18%, 5/15/68 (b)   900     868,500
Aon Corp., 8.21%, 1/01/27   2,500     2,911,810
AXA SA, 6.38% (a)(b)(f)   3,000     2,242,500
Bank One Capital III, 8.75%, 9/01/30 (c)   2,000     2,437,998
Chubb Corp., 6.38%, 3/29/67 (b)(c)   2,000     2,010,000
Farmers Exchange Capital, 7.05%, 7/15/28 (a)(c)   2,500     2,710,765
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(b)   2,925     3,553,875
Lincoln National Corp., 7.00%, 5/17/66 (b)(c)   3,350     3,149,000
MetLife, Inc., 6.40%, 12/15/66   3,325     3,266,274
Principal Life Insurance Co., 8.00%, 3/01/44 (a)   2,500     3,136,742
Reinsurance Group of America, 6.75%, 12/15/65 (b)   3,000     2,603,487
Swiss Re Solutions Holding Corp., 7.75%, 6/15/30 (c)   2,000     2,267,248
ZFS Finance (USA), Trust IV, 5.88%, 5/09/32 (a)(b)   379     367,630
          39,524,909
Multi-Utilities — 1.5%          
Dominion Resources Capital Trust I, 7.83%, 12/01/27   2,500     2,520,288
Dominion Resources, Inc., 7.50%, 6/30/66 (b)   3,900     4,095,000
          6,615,288
Oil, Gas & Consumable Fuels — 1.3%          
Enterprise Products Operating LLC, 8.38%, 8/01/66 (b)   2,000     2,070,000
TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b)   4,000     4,076,696
          6,146,696
Road & Rail — 0.8%          
BNSF Funding Trust I, 6.61%, 12/15/55 (b)   3,750     3,810,938
Total Capital Trusts — 23.9%         109,570,464
 

Preferred Stocks
  Shares    
Auto Components — 0.1%          
Dana Holding Corp., 4.00% (a)   4,000     495,000
Commercial Banks — 0.2%          
SG Preferred Capital II, 6.30% (a)(b)   1,000     1,004,687
Diversified Financial Services — 0.3%          
Ally Financial, Inc., 7.00% (a)   1,880     1,402,069
Thrifts & Mortgage Finance — 0.0%          
Fannie Mae, Series S, 8.25% (b)(g)   14,000     27,440
Freddie Mac, Series Z, 8.38% (b)(g)   14,000     29,960
          57,400
Wireless Telecommunication Services — 0.6%          
Centaur Funding Corp., 9.08% (a)   2,423     2,800,837
Total Preferred Stocks — 1.2%         5,759,993

See Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201127
  
Schedule of Investments (continued) BlackRock Credit Allocation Income Trust II, Inc. (PSY)
  (Percentages shown are based on Net Assets)

Trust Preferreds   Shares Value
Diversified Financial Services — 0.3%          
GMAC Capital Trust I, Series 2, 8.13%, 2/15/40 (b)   66,410   $ 1,363,099
Total Trust Preferreds — 0.3%         1,363,099
Total Preferred Securities — 25.4%         116,693,556
 
 
Taxable Municipal Bonds   Par
(000)
   
Metropolitan Transportation Authority, RB, Build          
America Bonds, 6.55%, 11/15/31 USD 3,450     3,895,257
Total Taxable Municipal Bonds — 0.8%         3,895,257
 
 
US Government Sponsored Agency Securities          
Agency Obligations — 0.3%          
Fannie Mae, 4.23%, 10/09/19 (c)(h)   1,670     1,262,477
Total US Government Sponsored Agency Securities — 0.3%   1,262,477
 
 
US Treasury Obligations          
US Treasury Bonds, 4.75%, 2/15/41 (c)   2,670     3,471,000
US Treasury Notes, 1.00%, 9/30/16 (c)   1,450     1,451,015
Total US Treasury Obligations — 1.1%         4,922,015
Total Long-Term Investments          
(Cost — $641,902,640) — 144.0%         661,406,675
 
 
Short-Term Securities   Shares    
BlackRock Liquidity Funds, TempFund,          
Institutional Class, 0.14% (i)(j)   405,708     405,708
Total Short-Term Securities          
(Cost — $405,708) — 0.1%         405,708
 
 
Options Purchased   Notional
Amount
(000)
   
Over-the-Counter Put Swaptions — 0.0%          
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 9/16/13, Broker          
Credit Suisse International EUR 5,300     108,147
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 10/21/13, Broker          
Citibank NA   5,000     111,161
          219,308
Total Options Purchased          
(Cost — $264,170) — 0.0%         219,308
Total Investments Before Options Written          
(Cost — $642,572,518*) — 144.1%         662,031,691

Options Written   Notional
Amount
(000)
Value
Over-the-Counter Call Swaptions — (0.2)%          
Pay a fixed rate of 4.03% and receive a floating rate          
based on 3-month LIBOR, Expires 4/16/12,          
Broker UBS AG USD 7,700 $ (1,090,952 )
Over-the-Counter Put Swaptions — (0.0)%          
Receive a fixed rate of 4.03% and pay a floating rate          
based on 3-month LIBOR, Expires 4/16/12, Broker          
UBS AG   7,700   (12,325 )
Total Options Written          
(Premiums Received — $554,400) — (0.2)%       (1,103,277 )
Total Investments, Net of Options Written — 143.9%       660,928,414  
Liabilities in Excess of Other Assets — (43.9)%       (201,649,692 )
Net Assets — 100.0%     $ 459,278,722  
           

The cost and unrealized appreciation (depreciation) of investments as of October 31, 2011, as computed for federal income tax purposes, were as follows: 
Aggregate cost $ 642,431,656  
Gross unrealized appreciation $ 36,903,817  
Gross unrealized depreciation   (17,303,782 )
Net unrealized appreciation $ 19,600,035  

(a) Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. 
(b) Variable rate security. Rate shown is as of report date. 
(c) All or a portion of security has been pledged as collateral in connection with open reverse repurchase agreements. 
(d) Represents a payment-in-kind security which may pay interest/dividends in additional par/shares. 
(e) When-issued security. Unsettled when-issued transactions were as follows: 
Counterparty Value Unrealized
Appreciation
Barclays Capital, Inc. $ 543,250 $ 13,250
JPMorgan Chase Bank NA $ 306,525 $ 1,525

(f) Security is perpetual in nature and has no stated maturity date. 
(g) Non-income producing security.  
(h) Represents a zero-coupon bond. Rate shown reflects the current yield as of report date. 
(i) Investments in companies considered to be an affiliate of the Fund during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: 
Affiliate Shares
Held at
October 31,
2010
Net
Activity
Shares
Held at
October 31,
2011
Income
BlackRock Liquidity        
Funds, TempFund,        
Institutional Class 1,483,567 (1,077,859) 405,708 $5,540

(j) Represents the current yield as of report date. 
• 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 rating group indexes, and/or as defined by Fund management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease. 

See Notes to Financial Statements.

28ANNUAL REPORTOCTOBER 31, 2011
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust II, Inc. (PSY)

• Reverse repurchase agreements outstanding as of October 31, 2011 were as follows: 
Counterparty Interest
Rate
Trade
Date
Maturity
Date
Net Closing
Amount
Face
Amount
UBS Securities LLC 0.38% 5/18/11 Open $ 12,935,169 $ 12,912,000
Credit Suisse              
Securities              
(USA) LLC 0.40% 5/19/11 Open   4,646,054   4,637,500
UBS Securities LLC 0.38% 5/19/11 Open   2,183,820   2,180,000
Credit Suisse              
Securities              
(USA) LLC 0.40% 5/20/11 Open   3,398,407   3,392,188
Barclays Capital Inc. 0.40% 5/31/11 Open   2,048,499   2,045,000
Credit Suisse              
Securities              
(USA) LLC 0.35% 6/01/11 Open   6,953,547   6,943,219
UBS Securities LLC 0.35% 6/08/11 Open   4,836,856   4,830,000
UBS Securities LLC 0.38% 6/14/11 Open   6,404,450   6,395,000
UBS Securities LLC 0.38% 6/15/11 Open   9,065,464   9,051,999
BNP Paribas              
Securities Corp. 0.35% 6/20/11 Open   1,920,339   1,917,840
UBS Securities LLC 0.37% 6/22/11 Open   3,536,166   3,531,375
UBS Securities LLC 0.37% 6/27/11 Open   1,849,286   1,846,875
Credit Suisse              
Securities              
(USA) LLC 0.35% 7/05/11 Open   1,612,645   1,610,781
UBS Securities LLC 0.35% 7/11/11 Open   2,408,543   2,405,900
UBS Securities LLC 0.32% 7/12/11 Open   2,247,660   2,245,425
UBS Securities LLC 0.28% 7/13/11 Open   588,508   588,000
Deutsche Bank              
Securities, Inc. 0.35% 7/20/11 Open   9,139,106   9,129,875
Deutsche Bank              
Securities, Inc. 0.17% 7/29/11 Open   2,971,708   2,970,375
UBS Securities LLC 0.38% 8/01/11 Open   3,711,633   3,706,000
Deutsche Bank              
Securities, Inc. 0.35% 8/03/11 Open   3,624,969   3,621,800
BNP Paribas              
Securities Corp. 0.09% 8/05/11 Open   1,227,720   1,227,450
BNP Paribas              
Securities Corp. 0.35% 8/16/11 Open   1,863,394   1,862,000
BNP Paribas              
Securities Corp. 0.39% 8/17/11 Open   1,483,220   1,482,000
Barclays              
Capital Inc. 0.35% 8/18/11 Open   3,912,851   3,910,000
Barclays              
Capital Inc. 0.35% 8/26/11 Open   2,401,501   2,399,938
Barclays              
Capital Inc. 0.35% 8/30/11 Open   4,528,272   4,525,500
Barclays              
Capital Inc. 0.35% 8/31/11 Open   4,777,878   4,775,000
Barclays              
Capital Inc. 0.35% 9/01/11 Open   17,070,843   17,060,725
BNP Paribas              
Securities Corp. 0.35% 9/01/11 Open   36,121,583   36,100,174
Credit Suisse              
Securities              
(USA) LLC 0.35% 9/09/11 Open   7,104,147   7,100,489
Credit Suisse              
Securities              
(USA) LLC 0.35% 9/12/11 Open   2,087,825   2,086,750
Deutsche Bank              
Securities, Inc. 0.40% 9/12/11 Open   3,980,210   3,978,000
Deutsche Bank              
Securities, Inc. 0.35% 9/20/11 Open   1,820,743   1,820,000
Barclays Capital Inc. 0.40% 9/23/11 Open   3,160,932   3,159,563
Barclays Capital Inc. 0.40% 9/30/11 Open   3,171,065   3,169,938

• Reverse repurchase agreements outstanding as of October 31, 2011 were as follows (concluded): 
Counterparty Interest
Rate
Trade
Date
 Maturity
Date
Net Closing
Amount
Face
Amount
Deutsche Bank                  
Securities, Inc. 0.40 % 10/04/11 Open $ 2,957,170 $ 2,956,250  
Credit Suisse                  
Securities                  
(USA) LLC 0.35 % 10/06/11 Open   509,566   509,438  
Barclays                  
Capital Inc. 0.35 % 10/12/11 Open   1,991,637   1,991,250  
Deutsche Bank                  
Securities, Inc. 0.35 % 10/12/11 Open   4,600,894   4,600,000  
Deutsche Bank                  
Securities, Inc. 0.35 % 10/14/11 Open   7,464,694   7,463,388  
Deutsche Bank                  
Securities, Inc. 0.38 % 10/20/11 Open   1,042,632   1,042,500  
Credit Suisse                  
Securities                  
(USA) LLC 0.35 % 10/27/11 Open   1,618,566   1,618,487  
Credit Suisse                  
Securities                  
(USA) LLC 0.40 % 10/27/11 Open   5,838,587   5,838,262  
BNP Paribas                  
Securities Corp. 0.39 % 10/27/11 Open   1,529,858   1,529,774  
Credit Suisse                  
Securities                  
(USA) LLC (0.70 %) 10/31/11 Open   1,449,972   1,450,000  
UBS Securities LLC 0.38 % 10/31/11 Open   3,415,366   3,415,185  
Total         $ 213,213,955 $ 213,033,213  

Certain agreements have no stated maturity and can be terminated by either party at anytime. 
• Financial futures contracts sold as of October 31, 2011 were as follows: 
Contracts Issue Exchange Expiration Notional
Value
Unrealized
Appreciation
(Depreciation)
404 Euro-Schatz Eurex December          
      2011 EUR 44,316,780 $ (36,951 )
1 German Euro Chicago December          
  Bund Mercantile 2011 EUR 135,470   (306 )
890 10-Year US Chicago December          
  Treasury Note Board of Trade 2011 USD 114,865,625   205,436  
77 Ultra US Chicago Board December          
  Treasury Bond of Trade 2011 USD 11,732,875   341,830  
Total           $ 510,009  

Foreign currency exchange contracts as of October 31, 2011 were as follows:

Currency
Purchased
  Currency
Sold
Counterparty Settlement
Date
Unrealized
Depreciation
USD 1,477,438   EUR 1,074,500 Citibank NA 1/25/12 $ (8,539 )
USD 123,988   EUR 90,000 Deutsche Bank AG 1/25/12   (477 )
 
Total             $ (9,016 )

See Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201129
  


Schedule of Investments (continued) BlackRock Credit Allocation Income Trust II, Inc. (PSY)

Credit default swaps on single-name issues — buy protection outstanding as of October 31, 2011 were as follows:

Issuer Pay
Fixed
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Appreciation
(Depreciation)
Raytheon Co. 1.00% Citibank NA 9/20/16 USD 1,100 $ 6,220  
Raytheon Co. 1.00% Deutsche          
    Bank AG 9/20/16 USD 1,150   (902 )
General   JPMorgan          
Dynamics Corp. 1.00% Chase          
    Bank & Co. 9/20/16 USD 2,475   21,317  
Computer   Morgan Stanley          
Sciences Corp. 1.00% & Co., Inc. 9/20/16 USD 1,160   5,463  
General   Morgan Stanley          
Dynamics Corp. 1.00% & Co., Inc. 9/20/16 USD 1,725   5,245  
Raytheon Co. 1.00% Morgan Stanley          
    & Co., Inc. 9/20/16 USD    650   (812 )
Dell, Inc. 1.00% Barclays          
    Bank Plc 12/20/16 USD 2,665   (17,909 )
Computer   Credit Suisse          
Sciences Corp. 1.00% Securities          
    (USA) LLC 12/20/16 USD 1,185   (24,066 )
Lockheed   Deutsche          
Martin Corp. 1.00% Bank AG 12/20/16 USD 3,025   32,089  
STMicroelectron-   Deutsche          
ics NV 1.00% Bank AG 12/20/16 EUR 1,215   (1,481 )
Southwest   Goldman          
Airlines Co. 1.00% Sachs Capital          
    Markets LP 12/20/16 USD 1,185   (279 )
Southwest   Royal Bank of          
Airlines Co. 1.00% Scotland Plc 12/20/16 USD 1,185   (5,382 )
Total         $ 19,503  

• Credit default swaps on single-name issues — sold protection outstanding as of October 31, 2011 were as follows: 
Issuer Receive
Fixed
Rate
Counterparty Expiration
Date
Issuer
Credit
Rating1
Notional
Amount
(000) 2
Unrealized
Appreciation
(Depreciation)
Aviva USA   Deutsche            
Corp. 1.00% Bank AG 5/25/12 AA– USD 2,775 $ 5,018  
Assured                
Guaranty                
Corp. 5.00% Citibank NA 12/20/14 AA+ USD    180   (1,004 )
Assured                
Guaranty                
Corp. 5.00% Citibank NA 3/20/15 AA+ USD    770   1,234  
MetLife, Inc. 1.00% Deutsche            
    Bank AG 3/20/18 A+ USD    900   (43,991 )
Total           $ (38,743 )

Using S&P’s rating. 
The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement. 
• Credit default swaps on traded indexes — buy protection outstanding as of October 31, 2011 were as follows: 
Index Pay
Fixed
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Depreciation
Dow Jones              
CDX North              
America High   JPMorgan          
Yield Index   Chase Bank          
Series 17 5.00% & Co. 12/20/16 USD 4,450  $ (426,393 )

• Interest rate swaps outstanding as of October 31, 2011 were as follows: 
 
Fixed
Rate
Floating
Rate
Counterparty Expiration
Date
Notional
Amount

(000)
  Unrealized
Appreciation

(Depreciation)
1.43%(b) 3-month Deutsche              
  LIBOR Bank AG 9/13/13 EUR 44,900   $ (36,575
2.72%(b) 3-month Deutsche              
  LIBOR Bank AG 8/08/21 USD 6,500     242,524  
4.35%(a) 3-month Deutsche              
  LIBOR Bank AG 4/15/41 USD 3,000     (836,056 )
3.93%(a) 3-month                
  LIBOR Citibank NA 7/21/41 USD 6,400     (1,246,530 )
3.01%(b) 3-month Deutsche              
  LIBOR Bank AG 9/13/41 USD 900     8,010  
2.63%(b) 3-month Deutsche              
  LIBOR Bank AG 9/26/41 USD 1,900     (130,552 )
2.81%(a) 3-month Credit Suisse              
  LIBOR Securities              
    (USA) LLC 10/11/41 USD 1,900     62,636  
3.00%(a) 3-month Credit Suisse              
  LIBOR Securities              
    (USA) LLC 10/18/41 USD 1,200     (7,526 )
Total             $ (1,944,069 )

(a) Pays a fixed interest rate and receives floating rate. 
(b) Pays a floating interest rate and receives fixed rate. 
• Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows: 
• Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities 
• Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs) 
• Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments) 

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and does not necessarily correspond to the Fund’s perceived risk of investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

See Notes to Financial Statements.

30ANNUAL REPORTOCTOBER 31, 2011
 

Schedule of Investments (concluded) BlackRock Credit Allocation Income Trust II, Inc. (PSY)

The following tables summarize the inputs used as of October 31, 2011 in determining the fair valuation of the Fund’s investments and derivative financial instruments:

Valuation Inputs Level 1 Level 2 Level 3 Total
Assets:                        
Investments:                        
Long-Term                        
Investments:                        
Asset-Back                        
Securities     $ 2,077,112   $ 2,053,750   $ 4,130,862  
Corporate                        
Bonds       526,966,508     3,536,000     530,502,508  
Preferred                        
Securities $ 1,420,499     115,273,057         116,693,556  
Taxable                        
Municipal                        
Bonds       3,895,257         3,895,257  
US Government                        
Sponsored                        
Agency                        
Securities       1,262,477         1,262,477  
US Treasury                        
Obligations       4,922,015         4,922,015  
Short-Term                        
Securities   405,708             405,708  
Total $ 1,826,207   $ 654,396,426   $ 5,589,750   $ 661,812,383  

Valuation Inputs   Level 1 Level 2   Level 3   Total
Derivative Financial Instruments1                  
Assets:                        
Interest rate                        
contracts $ 547,266   $ 532,478       $ 1,079,744  
Credit                        
contracts       71,568   $ 5,018     76,586  
Liabilities:                        
Interest rate                        
contracts   (37,257 )   (3,360,516 )       (3,397,773 )
Foreign                        
currency                        
exchange                        
contracts       (9,016 )       (9,016 )
Credit                        
contracts       (522,219 )       (522,219 )
Total $ 510,009   $ (3,287,705 ) $ 5,018   $ (2,772,678 )

Derivative financial instruments are swaps, financial futures contracts, foreign currency exchange contracts and options. Swaps, financial futures contracts and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value. 

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

  Asset-Backed
Securities
Corporate
Bonds
Total
Assets:                  
Balance, as of October 31, 2010     $ 103,025   $ 103,025  
Accrued discounts/premiums $ 20,514         20,514  
Net realized gain (loss)       34     34  
Net change in unrealized appreciation/depreciation2   (233,998 )   141,388     (92,610 )
Purchases   2,267,234     3,400,000     5,667,234  
Sales       (108,447 )   (108,447 )
Transfers in3            
Transfers out3            
Balance, as of October 31, 2011 $ 2,053,750   $ 3,536,000   $ 5,589,750  

Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on investments still held at October 31, 2011 was $(97,998). 
The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the period of the event or the change in circumstances that caused the transfer. 

The following is a reconciliation of Level 3 derivative financial instruments for which significant unobservable inputs were used to determine fair value:

  Credit
Contracts
Assets:      
Balance, as of October 31, 2010    
Accrued discounts/premiums $ 8,471  
Net realized gain (loss)    
Net change in unrealized appreciation/depreciation4   5,018  
Purchases    
Issuances5   14,687  
Sales    
Settlements6   (23,158 )
Transfers in3    
Transfers out3    
Balance, as of October 31, 2011 $ 5,018  

Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on derivative financial instruments still held at October 31, 2011 was $5,018. 
Issuances represent upfront cash received on certain derivative financial instruments. 
Settlements represent periodic contractual cash flows and/or cash flows to terminate certain derivative financial instruments. 

A reconciliation of Level 3 investments and derivative financial instruments is presented when the Fund had a significant amount of Level 3 investments and derivative financial instruments at the beginning and/or end of the year in relation to net assets.

See Notes to Financial Statements.

ANNUAL REPORTOCTOBER 31, 201131
  


Schedule of Investments October 31, 2011 BlackRock Credit Allocation Income Trust III (BPP)
  (Percentages shown are based on Net Assets)

Asset-Backed Securities   Par
(000)
Value
Atrium CDO Corp., Series 5A, Class A4,          
0.69%, 7/20/20 (a)(b) USD 1,300   $ 1,007,500
Total Asset-Backed Securities — 0.5%         1,007,500
 
 
Corporate Bonds          
Aerospace & Defense — 1.8%          
BE Aerospace, Inc., 8.50%, 7/01/18   1,215     1,327,387
Bombardier, Inc., 7.75%, 3/15/20 (a)   1,405     1,545,500
Huntington Ingalls Industries, Inc. (a):          
6.88%, 3/15/18   290     292,175
7.13%, 3/15/21   300     303,750
Kratos Defense & Security Solutions, Inc.,          
10.00%, 6/01/17   460     476,100
          3,944,912
Airlines — 1.0%          
American Airlines Pass-Through Trust:          
Series 2011-1, Class A, 5.25%, 7/31/22   639     581,539
Series 2011-2, Class A, 8.63%, 4/15/23   265     265,000
Continental Airlines Pass-Through Certificates,          
Series 2009-2, Class B, 9.25%, 5/10/17   693     712,248
Delta Air Lines, Inc., Series 02G1, 6.72%, 7/02/24   588     580,742
          2,139,529
Auto Components — 1.5%          
Daimler Finance North America LLC,          
2.63%, 9/15/16 (a)(c)   1,650     1,639,890
Delphi Corp., 6.13%, 5/15/21 (a)   280     285,600
Icahn Enterprises LP:          
7.75%, 1/15/16   420     430,500
8.00%, 1/15/18   1,000     1,017,500
          3,373,490
Beverages — 0.5%          
Constellation Brands, Inc., 7.25%, 5/15/17   955     1,050,500
Building Products — 0.3%          
Building Materials Corp. of America (a):          
7.00%, 2/15/20   180     190,800
6.75%, 5/01/21   570     591,375
          782,175
Capital Markets — 3.9%          
Ameriprise Financial, Inc., 5.30%, 3/15/20 (c)   1,500     1,634,641
E*Trade Financial Corp., 12.50%, 11/30/17 (d)   900     1,037,250
The Goldman Sachs Group, Inc., 6.25%, 2/01/41 (c)   2,150     2,217,095
Macquarie Bank Ltd., 6.63%, 4/07/21 (a)(e)   805     788,426
Morgan Stanley, 5.50%, 7/28/21 (c)(e)   2,400     2,344,159
UBS AG, 2.25%, 1/28/14 (c)   775     772,270
          8,793,841
Chemicals — 1.0%          
Ashland, Inc., 9.13%, 6/01/17   245     273,788
Celanese US Holdings LLC, 5.88%, 6/15/21   760     807,500
Lyondell Chemical Co., 11.00%, 5/01/18   595     662,681
Solutia, Inc., 7.88%, 3/15/20   415     444,050
          2,188,019
Commercial Banks — 5.4%          
Amsouth Bank, Series AI, 4.85%, 4/01/13   525     505,312
Asciano Finance Ltd., 5.00%, 4/07/18 (a)   425     451,838
Associated Banc-Corp, 5.13%, 3/28/16   1,070     1,104,025
BNP Paribas, 3.60%, 2/23/16 (c)   810     807,730
Branch Banking & Trust Co. (b):          
0.66%, 9/13/16   550     509,588
0.60%, 5/23/17   325     295,066

Corporate Bonds   Par
(000)
Value
Commercial Banks (concluded)          
CIT Group, Inc.:          
7.00%, 5/01/15 USD 120   $ 120,000
7.00%, 5/02/16 (a)   720     718,200
7.00%, 5/01/17   685     685,000
7.00%, 5/02/17 (a)   100     99,750
Discover Bank, 8.70%, 11/18/19   550     622,072
HSBC Holdings Plc, 5.10%, 4/05/21 (c)   2,700     2,908,084
RESPARCS Funding LP I, 8.00% (f)(g)(h)   4,000     1,120,000
Regions Financial Corp.:          
4.88%, 4/26/13   1,225     1,194,375
5.75%, 6/15/15   850     818,125
          11,959,165
Commercial Services & Supplies — 3.8%          
Aviation Capital Group Corp. (a):          
7.13%, 10/15/20 (c)   4,500     4,355,766
6.75%, 4/06/21   1,125     1,083,274
Casella Waste Systems, Inc., 7.75%, 2/15/19   336