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: 10/31/2012

 

Date of reporting period: 04/30/2012

 

Item 1 – Report to Stockholders

 

 
 

April 30, 2012


Semi-Annual Report (Unaudited)

4BlackRock Credit Allocation Income Trust I, Inc. (PSW)

4BlackRock Credit Allocation Income Trust II, Inc. (PSY)

4BlackRock Credit Allocation Income Trust III (BPP)

4BlackRock Credit Allocation Income Trust IV (BTZ)

4BlackRock Floating Rate Income Trust (BGT)

Not FDIC Insured • No Bank Guarantee • May Lose Value

 
 

Table of Contents

  Page
Dear Shareholder 3
Semi-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
Officers and Directors 78
Additional Information 79

2SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Dear Shareholder

One year ago at this time, risk assets were in a broad retreat as political strife in Greece ignited fears about sovereign debt problems spreading across Europe and economic indicators signaled that the global recovery had slowed. Confidence was further shaken by the prolonged debt ceiling debate in Washington, DC. Early in August 2011, 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 the European debt crisis intensified. Macro news flow became the dominant force in financial markets, driving asset prices up and down in lock step, in a risk on/risk off trading pattern. By the end of the third quarter in 2011, equity markets had fallen nearly 20% from their April peak while safe-haven assets such as US Treasuries and gold had rallied to historic highs.

October 2011 brought enough positive economic data to assuage fears of a global double-dip recession. Additionally, European leaders began making concerted efforts to stem the region’s debt crisis. Investors began to reenter the markets, putting risk assets on the road to recovery. Improving sentiment carried over into early 2012 as a number of factors elicited greater optimism. Sovereign debt problems in Europe became less pressing. Greece secured its second bailout package and completed the restructuring of its national debt. The European Central Bank gave financial markets a boost by providing additional liquidity through its long-term refinancing operations. The outlook for the global economy grew less dim as stronger data from the United States, particularly from the labor market, lifted sentiment. Hopes for additional monetary stimulus from the US Federal Reserve and strong corporate earnings pushed risk assets (including stocks, commodities and high yield bonds) higher through the first two months of the year while rising Treasury yields pressured higher-quality fixed income assets. The risk rally softened in late March, however, due to renewed fears about slowing growth in China and Europe’s debt troubles. Equity markets staggered downward in April as Spain’s financial situation became increasingly severe and elections in Greece and France added to uncertainty about the future of the euro zone. In the United States, disappointing jobs reports in April revealed that the recent acceleration in the labor market had been a short-lived surge. Overall, US economic data signaled that the pace of the recovery had slowed, but not to the extent that warranted additional monetary stimulus.

Thanks in large part to an exceptionally strong first quarter of 2012, equities and high yield bonds posted solid returns for the 6-month period ended April 30, 2012. On a 12-month basis, US large-cap stocks and high yield bonds delivered positive results; however, small-cap stocks finished in negative territory. International and emerging equities, which experienced significant downturns in 2011, lagged the broader rebound. Fixed income securities, including corporate, government and municipal bonds, performed well despite recent yield volatility. US Treasury bonds finished strong, with an April rally erasing the effects of their broad sell-off during February and March. Continued low short-term interest rates kept yields on money market securities near their all-time lows.

Financial markets have regained a significant degree of stability since the period of turmoil we endured last year; however, considerable headwinds remain. Political uncertainty in Europe elevates concerns about additional flare ups in the debt crisis. Higher energy prices and slowing growth in China continue to pose risks for the global economy. Potential political leadership changes around the world create additional layers of uncertainty. But, we believe that with these challenges come opportunities. We remain committed to working with you and your financial professional to identify actionable ideas for your portfolio. We encourage you to visit www.blackrock.com/newworld for more information.

Sincerely,

Rob Kapito

President, BlackRock Advisors, LLC


“Financial markets have regained a significant degree of stability since the period of turmoil we endured last year; however, considerable headwinds remain.”

Rob Kapito

President, BlackRock Advisors, LLC

Total Returns as of April 30, 2012

  6-month 12-month
 
US large cap equities 12.77 % 4.76 %
(S&P 500® Index)        
 
US small cap equities 11.02   (4.25 )
(Russell 2000® Index)        
 
International equities 2.44   (12.82 )
(MSCI Europe, Australasia,        
Far East Index)        
 
Emerging market 3.93   (12.61 )
equities (MSCI Emerging        
Markets Index)        
 
3-month Treasury 0.01   0.05  
bill (BofA Merrill Lynch        
3-Month Treasury        
Bill Index)        
 
US Treasury securities 3.83   16.41  
(BofA Merrill Lynch 10-        
Year US Treasury Index)        
 
US investment grade 2.44   7.54  
bonds (Barclays US        
Aggregate Bond Index)        
 
Tax-exempt municipal 5.71   11.90  
bonds (S&P Municipal        
Bond Index)        
 
US high yield bonds 6.91   5.89  
(Barclays 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 April 30, 2012 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 six months ended April 30, 2012, the Fund returned 13.41% based on market price and 7.14% 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 8.46% based on market price and 5.24% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

Spread sectors outperformed government-related debt for the six-month period as improving US economic fundamentals and accommodative monetary policy provided a backdrop that was conducive to credit spread compression. Accordingly, the Fund benefited from its allocations to investment grade and high yield corporate credit. The Fund’s high yield exposure was the largest contributor to performance despite recent weakness in the sector, as higher carry yields (income generation) and improving fundamentals helped to offset price declines. Within corporate credit, the Fund benefited from exposure to higher-beta names (those with greater sensitivity to market movements) in the industrials space. A bias toward financials also had a positive impact. Finally, the Fund’s duration stance (sensitivity to interest rate movements) contributed positively to returns as rates generally moved lower throughout the period.
The Fund’s duration and yield curve exposure was managed using interest rate derivative instruments such as futures contracts, options and swaps. These positions were put in place to limit the impact of expected volatility in interest rates and to express the Fund’s yield curve preference. These positions resulted in a slight net negative impact on performance for the period.

Describe recent portfolio activity.

During the six-month period, the Fund generally favored high quality companies with strong balance sheets. The Fund maintained a bias toward financials, but shifted to a neutral stance in industrials. The Fund increased exposure to the utilities sector, which appeared attractive on a relative basis while offering downside protection should the pace of the economic recovery continue to slow. The Fund maintained an emphasis on liquidity in order to take advantage of select opportunities in corporate credit. The Fund reduced its overall risk profile by decreasing leverage and portfolio duration over the period.

Describe portfolio positioning at period end.

European sovereign debt fears have once again resurfaced and macro risks remain a key driver of market volatility. As of period end, the Fund seeks to maintain a near-term short duration bias and remains cautiously optimistic on corporate credit.
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 utilities over financials and industrials. The Fund favors media cable and media non-cable names as well as insurance companies.

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.

4SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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 April 30, 2012 ($10.08)1 7.08%
Current Monthly Distribution per Common Share2 $0.0595
Current Annualized Distribution per Common Share2 $0.7140
Economic Leverage as of April 30, 20123 28%

1Yield 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.
2The distribution rate is not constant and is subject to change.
3Represents 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:

  4/30/12 10/31/11 Change High Low
Market Price $10.08 $  9.25 8.97% $10.31 $  8.86
Net Asset Value $10.83 $10.52 2.95% $10.88 $10.06

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

Portfolio Composition        
  4/30/12 10/31/11
Corporate Bonds 80 % 82 %
Preferred Securities 17   15  
Asset Backed Securities 1   1  
Taxable Municipal Bonds 1   1  
US Treasury Obligations 1   1  

Credit Quality Allocations4        
  4/30/12 10/31/11
AAA/Aaa5 2 % 1 %
AA/Aa 5   7  
A 25   28  
BBB/Baa 42   38  
BB/Ba 15   15  
B 7   8  
CCC/Caa 1   1  
Not Rated 3   2  

4Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors Service (“Moody’s”) ratings.
5Includes US Treasury obligations that are deemed AAA by the investment advisor
SEMI-ANNUAL REPORTAPRIL 30, 20125
 

Fund Summary as of April 30, 2012 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 six months ended April 30, 2012, the Fund returned 14.78% based on market price and 7.57% based on NAV. For the same period, the closed-end Lipper Corporate Debt Funds (BBB-Rated) category posted an average return of 8.46% based on market price and 5.24% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

Spread sectors outperformed government-related debt for the six-month period as improving US economic fundamentals and accommodative monetary policy provided a backdrop that was conducive to credit spread compression. Accordingly, the Fund benefited from its allocations to investment grade and high yield corporate credit. The Fund’s high yield exposure was the largest contributor to performance despite recent weakness in the sector, as higher carry yields (income generation) and improving fundamentals helped to offset price declines. Within corporate credit, the Fund benefited from exposure to higher-beta names (those with greater sensitivity to market movements) in the industrials space. A bias toward financials also had a positive impact. Finally, the Fund’s duration stance (sensitivity to interest rate movements) contributed positively to returns as rates generally moved lower throughout the period.
The Fund’s duration and yield curve exposure was managed using interest rate derivative instruments such as futures contracts, options and swaps. These positions were put in place to limit the impact of expected volatility in interest rates and to express the Fund’s yield curve preference. These positions resulted in a slight net negative impact on performance for the period.

Describe recent portfolio activity.

During the six-month period, the Fund generally favored high quality companies with strong balance sheets. The Fund maintained a bias toward financials, but shifted to a neutral stance in industrials. The Fund increased exposure to the utilities sector, which appeared attractive on a relative basis while offering downside protection should the pace of the economic recovery continue to slow. The Fund maintained an emphasis on liquidity in order to take advantage of select opportunities in corporate credit. The Fund reduced its overall risk profile by decreasing leverage and portfolio duration over the period.

Describe portfolio positioning at period end.

European sovereign debt fears have once again resurfaced and macro risks remain a key driver of market volatility. As of period end, the Fund seeks to maintain a near-term short duration bias and remains cautiously optimistic on corporate credit.
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 utilities over financials and industrials. The Fund favors media cable and media non-cable names as well as insurance companies.

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.

6SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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 April 30, 2012 ($10.79)1 6.78%
Current Monthly Distribution per Common Share2 $0.061
Current Annualized Distribution per Common Share2 $0.732
Economic Leverage as of April 30, 20123 27%

1Yield 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.
2The distribution rate is not constant and is subject to change.
3Represents 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:

  4/30/12 10/31/11 Change High Low
Market Price $10.79 $  9.74 10.78% $10.81 $  9.42
Net Asset Value $11.68 $11.25   3.82% $11.70 $10.84

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

Portfolio Composition        
  4/30/12 10/31/11
Corporate Bonds 79 % 80 %
Preferred Securities 18   17  
US Treasury Obligations 1   1  
Asset Backed Securities 1   1  
Taxable Municipal Bonds 1   1  

Credit Quality Allocations4        
  4/30/12 10/31/11
AAA/Aaa5 2 % 1 %
AA/Aa 4   7  
A 25   26  
BBB/Baa 42   39  
BB/Ba 17   17  
B 7   7  
CCC/Caa 1   1  
Not Rated 2   2  

4Using the higher of S&P’s or Moody’s ratings.
5Includes US Treasury obligations that are deemed AAA by the investment advisor.
SEMI-ANNUAL REPORTAPRIL 30, 20127
 

Fund Summary as of April 30, 2012 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 six months ended April 30, 2012, the Fund returned 12.37% based on market price and 7.12% based on NAV. For the same period, the closed-end Lipper Corporate Debt Funds (BBB-Rated) category posted an average return of 8.46% based on market price and 5.24% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

Spread sectors outperformed government-related debt for the six-month period as improving US economic fundamentals and accommodative monetary policy provided a backdrop that was conducive to credit spread compression. Accordingly, the Fund benefited from its allocations to investment grade and high yield corporate credit. The Fund’s high yield exposure was the largest contributor to performance despite recent weakness in the sector, as higher carry yields (income generation) and improving fundamentals helped to offset price declines. Within corporate credit, the Fund benefited from exposure to higher-beta names (those with greater sensitivity to market movements) in the industrials space. A bias toward financials also had a positive impact. Finally, the Fund’s duration stance (sensitivity to interest rate movements) contributed positively to returns as rates generally moved lower throughout the period.
The Fund’s duration and yield curve exposure was managed using interest rate derivative instruments such as futures contracts, options and swaps. These positions were put in place to limit the impact of expected volatility in interest rates and to express the Fund’s yield curve preference. These positions resulted in a slight net negative impact on performance for the period.

Describe recent portfolio activity.

During the six-month period, the Fund generally favored high quality companies with strong balance sheets. The Fund maintained a bias toward financials, but shifted to a neutral stance in industrials. The Fund increased exposure to the utilities sector, which appeared attractive on a relative basis while offering downside protection should the pace of the economic recovery continue to slow. The Fund maintained an emphasis on liquidity in order to take advantage of select opportunities in corporate credit. The Fund reduced its overall risk profile by decreasing leverage and portfolio duration over the period.

Describe portfolio positioning at period end.

European sovereign debt fears have once again resurfaced and macro risks remain a key driver of market volatility. As of period end, the Fund seeks to maintain a near-term short duration bias and remains cautiously optimistic on corporate credit.
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 utilities over financials and industrials. The Fund favors media cable and media non-cable names as well as insurance companies.

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.

8SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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 April 30, 2012 ($11.43)1 6.67%
Current Monthly Distribution per Common Share2 $0.0635
Current Annualized Distribution per Common Share2 $0.7620
Economic Leverage as of April 30, 20123 24%

1Yield 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.
2The distribution rate is not constant and is subject to change.
3Represents 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:

  4/30/12 10/31/11 Change High Low
Market Price $11.43 $10.53 8.55% $11.45 $10.05
Net Asset Value $12.49 $12.07 3.48% $12.55 $11.58

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

Portfolio Composition        
  4/30/12 10/31/11
Corporate Bonds 83 % 83 %
Preferred Securities 15   15  
US Treasury Obligations 1   1  
Taxable Municipal Bonds 1   1  

Credit Quality Allocations4        
  4/30/12 10/31/11
AAA/Aaa5 1 % 1 %
AA/Aa 4   6  
A 27   31  
BBB/Baa 39   37  
BB/Ba 16   15  
B 8   8  
CCC/Caa 1   1  
Not Rated 4   1  

4Using the higher of S&P’s or Moody’s ratings.
5Includes US Treasury obligations that are deemed AAA by the investment advisor.
SEMI-ANNUAL REPORTAPRIL 30, 20129
 

Fund Summary as of April 30, 2012 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 six months ended April 30, 2012, the Fund returned 13.87% based on market price and 7.46% based on NAV. For the same period, the closed-end Lipper Corporate Debt Funds (BBB-Rated) category posted an average return of 8.46% based on market price and 5.24% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

Spread sectors outperformed government-related debt for the six-month period as improving US economic fundamentals and accommodative monetary policy provided a backdrop that was conducive to credit spread compression. Accordingly, the Fund benefited from its allocations to investment grade and high yield corporate credit. The Fund’s high yield exposure was the largest contributor to performance despite recent weakness in the sector, as higher carry yields (income generation) and improving fundamentals helped to offset price declines. Within corporate credit, the Fund benefited from exposure to higher-beta names (those with greater sensitivity to market movements) in the industrials space. A bias toward financials also had a positive impact. Finally, the Fund’s duration stance (sensitivity to interest rate movements) contributed positively to returns as rates generally moved lower throughout the period.
The Fund’s duration and yield curve exposure was managed using interest rate derivative instruments such as futures contracts, options and swaps. These positions were put in place to limit the impact of expected volatility in interest rates and to express the Fund’s yield curve preference. These positions resulted in a slight net negative impact on performance for the period.

Describe recent portfolio activity.

During the six-month period, the Fund generally favored high quality companies with strong balance sheets. The Fund maintained a bias toward financials, but shifted to a neutral stance in industrials. The Fund increased exposure to the utilities sector, which appeared attractive on a relative basis while offering downside protection should the pace of the economic recovery continue to slow. The Fund maintained an emphasis on liquidity in order to take advantage of select opportunities in corporate credit. The Fund reduced its overall risk profile by decreasing leverage and portfolio duration over the period.

Describe portfolio positioning at period end.

European sovereign debt fears have once again resurfaced and macro risks remain a key driver of market volatility. As of period end, the Fund seeks to maintain a near-term short duration bias and remains cautiously optimistic on corporate credit.
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 utilities over financials and industrials. The Fund favors media cable and media non-cable names as well as insurance companies.

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.

10SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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 April 30, 2012 ($13.26)1 7.10%
Current Monthly Distribution per Common Share2 $0.0785
Current Annualized Distribution per Common Share2 $0.9420
Economic Leverage as of April 30, 20123 27%

1Yield 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.
2The distribution rate is not constant and is subject to change.
3Represents 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:

  4/30/12 10/31/11 Change High Low
Market Price $13.26 $12.08 9.77% $13.34 $11.76
Net Asset Value $14.44 $13.94 3.59% $14.51 $13.37

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        
  4/30/12 10/31/11
Corporate Bonds 78 % 80 %
Preferred Securities 18   17  
Asset Backed Securities 2   1  
US Treasury Obligations 1   1  
Taxable Municipal Bonds 1   1  

Credit Quality Allocations4        
  4/30/12 10/31/11
AAA/Aaa5 2 % 1 %
AA/Aa 3   7  
A 29   29  
BBB/Baa 40   37  
BB/Ba 16   16  
B 7   8  
CCC/Caa 1    
Not Rated 2   2  

4Using the higher of S&P’s or Moody’s ratings.
5Includes US Treasury Obligations that are deemed AAA by the investment advisor.
SEMI-ANNUAL REPORTAPRIL 30, 201211
 

Fund Summary as of April 30, 2012 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 six months ended April 30, 2012, the Fund returned 16.01% based on market price and 6.83% based on NAV. For the same period, the closed-end Lipper Loan Participation Funds category posted an average return of 12.22% based on market price and 7.00% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

Security selection among higher-quality loan instruments had a positive impact on the Fund’s performance. Selection in the electric and diversified manufacturing sectors also boosted returns. The Fund’s tactical exposure to high yield bonds contributed positively as the asset class outperformed loans given improving investor demand for riskier assets over the six-month period.
The Fund’s higher-quality loan bias, the core of its investment strategy, detracted from performance as lower-quality loan instruments rallied higher amid increasing demand for risk. The Fund’s exposure to the media non-cable sector also had a negative effect on returns.

Describe recent portfolio activity.

The period began with severe market volatility in reaction to headwinds from Europe’s debt crisis and a possible US government shut-down. However, the environment shifted in December when the European Central Bank announced a long-term refinancing operation. This liquidity program provided a much-needed short-term fix for the financial markets and helped to mitigate the risk of a collapse in the European banking system. Moreover, it was the catalyst for a positive turn in the valuation of risk assets.
During the period, the Fund maintained its focus on the higher quality portions of the loan market in terms of loan structure, liquidity and overall credit quality. Given the fragile outlook for global growth, the Fund remained cautious of lower-rated less-liquid loans. The Fund sought issuers with attractive risk-reward characteristics and superior fundamentals. While the developments during the period bode well for the posture of risk markets going forward, the Fund continues to maintain a high quality bias.

Describe portfolio positioning at period end.

At period end, the Fund held 81% of its total portfolio in floating rate loan interests (bank loans) and 15% in corporate bonds, with the remainder invested in a mix of asset-backed securities, foreign agency obligations and common stocks. The Fund’s largest sector exposures included media non-cable, media cable, and chemicals. The Fund ended the period with leverage at 29% 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.

12SEMI-ANNUAL REPORTAPRIL 30, 2012
 

BlackRock Floating Rate Income Trust

Fund Information  
Symbol on NYSE BGT
Initial Offering Date August 30, 2004
Yield on Closing Market Price as of April 30, 2012 ($14.41)1 6.45%
Current Monthly Distribution per Common Share2 $0.0775
Current Annualized Distribution per Common Share2 $0.9300
Economic Leverage as of April 30, 20123 29%

1Yield 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.
2The distribution rate is not constant and is subject to change.
3Represents 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:

  4/30/12 10/31/11 Change High Low
Market Price $14.41 $13.00 10.85% $14.57 $12.55
Net Asset Value $14.26 $13.97 2.08% $14.26 $13.53

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        
  4/30/12 10/31/11
Floating Rate Loan Interests 81 % 78 %
Corporate Bonds 15   18  
Asset Backed Securities 2   2  
Foreign Agency Obligations 1   1  
Common Stocks 1    
Other Interests    1  

Credit Quality Allocations4        
  4/30/12 10/31/11
AAA/Aaa 2 %  
AA/Aa 8   9 %
A 1   2  
BBB/Baa 20   25  
BB/Ba 32   27  
B 33   34  
CCC/Caa   1  
Not Rated 4   2  

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

SEMI-ANNUAL REPORTAPRIL 30, 201213
 

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. 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 for an additional $30 million, creating a total value of $130 million available for investment in long-term securities. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the 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, as amended (the “1940 Act”), the Funds are permitted to issue senior securities representing indebtedness up to 331/3% of their total managed assets (each Fund’s net assets plus the proceeds of any outstanding borrowings used for leverage). If the Funds segregate liquid assets having a value not less than the repurchase price (including accrued interest), a reverse repurchase agreement will not be considered a senior security and therefore will not be subject to this limitation. Each Fund, however, voluntarily limits its aggregate economic leverage to 50% of its managed assets. As of April 30, 2012, the Funds had aggregate economic leverage from reverse repurchase agreements and/or borrowings through a credit facility as a percentage of their total managed assets as follows:

  Percent of
Economic
Leverage
PSW 28%
PSY 27%
BPP 24%
BTZ 27%
BGT 29%

14SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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.

SEMI-ANNUAL REPORTAPRIL 30, 201215
 

Schedule of Investments April 30, 2012 (Unaudited) BlackRock Credit Allocation Income Trust I, Inc. (PSW)
  (Percentages shown are based on Net Assets)

Asset-Backed Securities   Par
(000)
  Value
321 Henderson Receivables I LLC, Series 2012-1A,        
Class A, 4.21%, 2/16/65 (a) USD 250   $ 257,043
Atrium CDO Corp., Series 5A, Class A4,        
0.88%, 7/20/20 (a)(b)   650   549,250
SLM Student Loan Trust, Series 2004-B, Class A2,        
0.67%, 6/15/21 (b)   468   448,515
Total Asset-Backed Securities — 1.1%       1,254,808
 
Corporate Bonds
Aerospace & Defense — 1.1%        
BE Aerospace, Inc., 8.50%, 7/01/18   560   620,200
Huntington Ingalls Industries, Inc.:        
6.88%, 3/15/18   150   158,625
7.13%, 3/15/21   140   148,225
Kratos Defense & Security Solutions, Inc.,        
10.00%, 6/01/17   282   303,150
        1,230,200
Airlines — 0.7%        
American Airlines Pass-Through Trust, Series 2011-2,        
Class A, 8.63%, 4/15/23   112   117,743
Continental Airlines Pass-Through Certificates, Series        
2009-2, Class B, 9.25%, 5/10/17   314   343,411
Delta Air Lines, Inc., Series 02G1, 6.72%, 7/02/24   260   273,571
        734,725
Auto Components — 0.8%        
Delphi Corp., 6.13%, 5/15/21 (a)   130   138,450
Icahn Enterprises LP:        
7.75%, 1/15/16   560   598,500
8.00%, 1/15/18   140   147,350
        884,300
Beverages — 0.5%        
Constellation Brands, Inc., 7.25%, 5/15/17   460   519,800
Building Products — 0.3%        
Building Materials Corp. of America (a):        
7.00%, 2/15/20   85   90,738
6.75%, 5/01/21   220   229,075
        319,813
Capital Markets — 4.7%        
Ameriprise Financial, Inc., 5.30%, 3/15/20 (c)   750   838,547
E*Trade Financial Corp., 12.50%, 11/30/17   440   512,600
The Goldman Sachs Group, Inc. (c):        
5.75%, 1/24/22   385   402,015
6.25%, 2/01/41   1,050   1,066,950
Morgan Stanley (c):        
5.75%, 1/25/21   1,025   1,012,120
5.50%, 7/28/21   265   259,073
Murray Street Investment Trust I, 4.65%, 3/09/17 (d)   150   150,901
UBS AG (c):        
2.25%, 1/28/14   375   376,946
5.88%, 7/15/16   650   687,348
        5,306,500
Chemicals — 1.4%        
Ashland, Inc., 9.13%, 6/01/17   10   11,100
Celanese US Holdings LLC, 5.88%, 6/15/21   370   396,825
         
Corporate Bonds   Par
(000)
  Value
Chemicals (concluded)        
Hexion US Finance Corp., 6.63%, 4/15/20 (a) USD 200   $ 209,000
Ineos Finance Plc (a):        
8.38%, 2/15/19   100   107,250
7.50%, 5/01/20   175   179,813
LyondellBasell Industries NV, 5.75%, 4/15/24 (a)   445   459,462
Solutia, Inc., 7.88%, 3/15/20   200   233,500
        1,596,950
Commercial Banks — 5.0%        
Amsouth Bank, Series AI, 4.85%, 4/01/13   200   203,000
Asciano Finance Ltd., 5.00%, 4/07/18 (a)   200   208,196
Associated Banc-Corp, 5.13%, 3/28/16   515   545,222
Branch Banking & Trust Co. (b):        
0.79%, 9/13/16   250   235,636
0.79%, 5/23/17   150   139,894
CIT Group, Inc.:        
7.00%, 5/02/16 (a)   370   370,925
7.00%, 5/02/17 (a)   310   310,775
5.25%, 3/15/18   280   288,400
5.50%, 2/15/19 (a)   240   246,600
City National Corp., 5.25%, 9/15/20 (c)   550   587,757
Discover Bank, 8.70%, 11/18/19   300   378,392
HSBC Finance Corp., 6.68%, 1/15/21 (c)   350   377,995
Regions Financial Corp.:        
4.88%, 4/26/13   600   618,000
5.75%, 6/15/15   460   485,300
SVB Financial Group, 5.38%, 9/15/20 (c)   550   605,146
        5,601,238
Commercial Services & Supplies — 4.0%        
Aviation Capital Group Corp. (a):        
7.13%, 10/15/20 (c)   2,200   2,250,159
6.75%, 4/06/21   550   544,170
Casella Waste Systems, Inc., 7.75%, 2/15/19   169   166,465
Clean Harbors, Inc., 7.63%, 8/15/16   306   321,300
Corrections Corp. of America, 7.75%, 6/01/17   775   840,875
Covanta Holding Corp., 6.38%, 10/01/22   155   159,435
Iron Mountain, Inc., 7.75%, 10/01/19   90   98,100
Mobile Mini, Inc., 7.88%, 12/01/20   65   69,550
        4,450,054
Communications Equipment — 1.0%        
Avaya, Inc., 9.75%, 11/01/15 (c)   200   198,250
Brocade Communications Systems, Inc.,        
6.88%, 1/15/20 (c)   700   764,750
Hughes Satellite Systems Corp., 6.50%, 6/15/19   100   107,000
        1,070,000
Construction Materials — 0.2%        
HD Supply, Inc., 8.13%, 4/15/19 (a)   210   225,488
Consumer Finance — 5.3%        
American Express Credit Corp., 2.75%, 9/15/15 (c)   1,400   1,452,643
Capital One Bank USA NA, 8.80%, 7/15/19   775   978,748
Daimler Finance North America LLC, 2.63%, 9/15/16 (a) 800   827,213
Ford Motor Credit Co. LLC:        
7.00%, 4/15/15   690   769,350
5.88%, 8/02/21   140   158,212
Inmarsat Finance Plc, 7.38%, 12/01/17 (a)   420   451,500
SLM Corp., 6.25%, 1/25/16   1,180   1,215,400
Toll Brothers Finance Corp., 5.88%, 2/15/22   95   98,317
        5,951,383

Portfolio Abbreviations

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

16SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

Corporate Bonds   Par
(000)
  Value
Containers & Packaging — 1.5%        
Ardagh Packaging Finance Plc, 9.13%, 10/15/20 (a) USD 200   $ 216,500
Ball Corp.:        
7.13%, 9/01/16   400   438,000
6.75%, 9/15/20   505   558,025
Bemis Co., Inc., 6.80%, 8/01/19   200   238,439
Crown Americas LLC, 6.25%, 2/01/21   200   217,500
Sealed Air Corp., 8.38%, 9/15/21 (a)   30   34,050
        1,702,514
Diversified Financial Services — 8.6%        
Ally Financial, Inc.:        
4.50%, 2/11/14   225   227,250
8.30%, 2/12/15   390   428,025
8.00%, 11/01/31   230   263,350
Bank of America Corp. (c):        
3.75%, 7/12/16   350   348,495
5.30%, 3/15/17   855   891,720
5.00%, 5/13/21   1,325   1,318,799
Citigroup, Inc. (c):        
6.38%, 8/12/14   300   323,518
4.59%, 12/15/15   225   235,665
4.45%, 1/10/17   600   626,762
DPL, Inc., 7.25%, 10/15/21 (a)   255   283,050
General Motors Financial Co., Inc., 6.75%, 6/01/18   120   127,804
ING Bank NV, 5.00%, 6/09/21 (a)(c)   550   560,242
Intesa Sanpaolo SpA:        
2.38%, 12/21/12   800   788,678
6.50%, 2/24/21 (a)(c)   100   90,856
Moody’s Corp., 6.06%, 9/07/17   2,500   2,629,082
Reynolds Group Issuer, Inc. (a):        
7.88%, 8/15/19   255   275,400
9.88%, 8/15/19   100   104,250
WMG Acquisition Corp., 9.50%, 6/15/16 (a)   50   54,625
        9,577,571
Diversified Telecommunication Services — 3.5%        
AT&T, Inc., 6.30%, 1/15/38 (c)   1,000   1,198,478
Level 3 Financing, Inc. (a):        
8.13%, 7/01/19   898   922,695
8.63%, 7/15/20   150   157,125
Telecom Italia Capital SA, 6.18%, 6/18/14   225   232,268
Telefonica Emisiones SAU, 5.46%, 2/16/21   310   291,349
Verizon Communications, Inc., 7.35%, 4/01/39 (c)   660   905,356
Windstream Corp., 7.88%, 11/01/17   160   176,800
        3,884,071
Electric Utilities — 1.8%        
CMS Energy Corp., 5.05%, 3/15/22   275   279,923
Great Plains Energy, Inc., 5.29%, 6/15/22 (d)   375   409,933
Progress Energy, Inc., 7.00%, 10/30/31 (c)   1,000   1,305,337
        1,995,193
Electronic Equipment, Instruments & Components — 0.3%        
Jabil Circuit, Inc., 8.25%, 3/15/18   200   233,000
NXP BV, 3.22%, 10/15/13 (b)   95   95,000
        328,000
Energy Equipment & Services — 2.9%        
Atwood Oceanics, Inc., 6.50%, 2/01/20   25   26,313
Energy Transfer Partners LP, 5.20%, 2/01/22   700   746,126
Ensco Plc, 4.70%, 3/15/21 (c)   460   501,932
Frac Tech Services LLC, 7.13%, 11/15/18 (a)   250   258,125
Hornbeck Offshore Services, Inc., 5.88%, 4/01/20 (a)   65   64,837
Key Energy Services, Inc., 6.75%, 3/01/21   175   180,250
MEG Energy Corp., 6.50%, 3/15/21 (a)   225   236,812
Oil States International, Inc., 6.50%, 6/01/19   120   126,900
Peabody Energy Corp., 6.25%, 11/15/21 (a)   370   374,625

Corporate Bonds   Par
(000)
  Value
Energy Equipment & Services (concluded)        
Transocean, Inc.:        
6.50%, 11/15/20 USD 265   $ 304,333
6.38%, 12/15/21   320   374,718
        3,194,971
Food & Staples Retailing — 1.3%        
Wal-Mart Stores, Inc., 6.20%, 4/15/38 (c)   1,075   1,406,861
Food Products — 0.9%        
Kraft Foods, Inc.:        
6.50%, 8/11/17   385   467,161
6.13%, 8/23/18   390   471,705
Smithfield Foods, Inc., 10.00%, 7/15/14   86   100,620
        1,039,486
Gas Utilities — 0.2%        
El Paso Natural Gas Co., 8.63%, 1/15/22   165   208,833
Health Care Equipment & Supplies — 0.6%        
Fresenius US Finance II, Inc., 9.00%, 7/15/15 (a)   500   573,125
Teleflex, Inc., 6.88%, 6/01/19   115   123,050
        696,175
Health Care Providers & Services — 3.1%        
Aetna, Inc., 6.75%, 12/15/37   400   519,291
Aviv Healthcare Properties LP, 7.75%, 2/15/19   105   109,200
HCA, Inc.:        
8.50%, 4/15/19   55   61,703
6.50%, 2/15/20   560   599,200
7.25%, 9/15/20   195   215,962
INC Research LLC, 11.50%, 7/15/19 (a)   165   162,113
inVentiv Health, Inc., 10.00%, 8/15/18 (a)   60   53,800
Tenet Healthcare Corp.:        
10.00%, 5/01/18   350   404,250
8.88%, 7/01/19   250   280,312
UnitedHealth Group, Inc., 6.88%, 2/15/38 (c)   800   1,071,761
        3,477,592
Health Care Technology — 0.9%        
Amgen, Inc.:        
5.15%, 11/15/41 (c)   957   997,334
5.65%, 6/15/42   8   8,900
        1,006,234
Household Durables — 0.2%        
Standard Pacific Corp., 8.38%, 1/15/21   210   221,550
Independent Power Producers & Energy Traders — 1.1%      
AES Corp.:        
9.75%, 4/15/16   235   277,300
7.38%, 7/01/21 (a)   30   33,375
Calpine Corp., 7.25%, 10/15/17 (a)   100   106,750
Energy Future Intermediate Holding Co. LLC,        
10.00%, 12/01/20   440   485,650
Laredo Petroleum, Inc.:        
9.50%, 2/15/19   70   78,225
7.38%, 5/01/22 (a)   65   67,275
QEP Resources, Inc., 5.38%, 10/01/22   134   134,000
        1,182,575
Insurance — 6.8%        
American International Group, Inc.:        
3.80%, 3/22/17 (c)   345   356,322
8.25%, 8/15/18   150   181,744
6.40%, 12/15/20 (c)   610   700,682
Aon Corp., 5.00%, 9/30/20 (c)   1,600   1,777,771
Fairfax Financial Holdings Ltd., 5.80%, 5/15/21 (a)   700   680,129
Forethought Financial Group, Inc., 8.63%, 4/15/21 (a)   250   255,678
Genworth Financial, Inc., 7.63%, 9/24/21   225   222,165
ING Verzekeringen NV, 2.69%, 6/21/21 (b) EUR 110   136,143
Manulife Financial Corp., 4.90%, 9/17/20 USD 1,000   1,044,983
MPL 2 Acquisition Canco, Inc., 9.88%, 8/15/18 (a)   100   86,250

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201217
 

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

Corporate Bonds   Par
(000)
  Value
Insurance (concluded)        
Principal Financial Group, Inc., 8.88%, 5/15/19 USD 225   $ 291,423
Prudential Financial, Inc., 6.63%, 12/01/37 (c)   800   927,734
XL Group Ltd., 5.75%, 10/01/21   810   895,790
        7,556,814
IT Services — 0.7%        
Epicor Software Corp., 8.63%, 5/01/19   160   165,600
Fidelity National Information Services, Inc.,        
5.00%, 3/15/22 (a)   70   70,000
First Data Corp.:        
7.38%, 6/15/19 (a)   215   219,837
8.25%, 1/15/21 (a)   20   19,700
12.63%, 1/15/21   170   170,425
SunGard Data Systems, Inc., 7.38%, 11/15/18   170   181,475
        827,037
Life Sciences Tools & Services — 1.9%        
Bio-Rad Laboratories, Inc., 8.00%, 9/15/16   865   955,825
Life Technologies Corp., 6.00%, 3/01/20 (c)   1,000   1,162,765
        2,118,590
Machinery — 1.1%        
Ingersoll-Rand Global Holding Co., Ltd.,        
9.50%, 4/15/14   800   919,474
UR Financing Escrow Corp. (a):        
5.75%, 7/15/18   55   56,788
7.38%, 5/15/20   140   147,000
7.63%, 4/15/22   129   136,417
        1,259,679
Media — 8.6%        
AMC Networks, Inc., 7.75%, 7/15/21 (a)   90   100,575
CCH II LLC, 13.50%, 11/30/16   541   611,330
Comcast Corp., 6.30%, 11/15/17   800   970,414
Cox Communications, Inc., 8.38%, 3/01/39 (a)   800   1,148,628
CSC Holdings LLC:        
8.50%, 4/15/14   160   176,400
8.63%, 2/15/19   275   312,125
DIRECTV Holdings LLC, 5.00%, 3/01/21 (c)   600   656,128
DISH DBS Corp., 7.00%, 10/01/13   450   482,063
Intelsat Jackson Holdings SA, 7.25%, 4/01/19   50   52,125
Intelsat Luxemburg SA:        
11.25%, 2/04/17   150   155,625
11.50%, 2/04/17 (e)   100   104,250
The Interpublic Group of Cos., Inc., 10.00%, 7/15/17 275   313,156
Kabel BW Erste Beteiligungs GmbH,        
7.50%, 3/15/19 (a)   230   245,525
News America, Inc., 6.15%, 3/01/37 (c)   950   1,055,212
Time Warner Cable, Inc., 6.75%, 6/15/39   925   1,115,360
Time Warner, Inc., 7.70%, 5/01/32 (c)   950   1,244,645
Unitymedia Hessen GmbH & Co. KG (FKA UPC        
Germany GmbH), 8.13%, 12/01/17 (a)   240   257,400
Virgin Media Secured Finance Plc, 6.50%, 1/15/18   600   654,000
        9,654,961
Metals & Mining — 2.2%        
Alcoa, Inc., 5.40%, 4/15/21   155   162,906
Barrick Gold Corp., 2.90%, 5/30/16 (c)   275   288,369
Barrick North America Finance LLC, 5.70%, 5/30/41 (c) 300   330,570
Freeport-McMoRan Copper & Gold, Inc.,        
3.55%, 3/01/22   325   321,127
Freeport-McMoRan Corp., 7.13%, 11/01/27   700   863,821
New Gold, Inc., 7.00%, 4/15/20 (a)   30   30,675
Novelis, Inc., 8.75%, 12/15/20   230   253,575
Teck Resources Ltd., 10.75%, 5/15/19   200   247,500
        2,498,543
         
Corporate Bonds   Par
(000)
  Value
Multi-Utilities — 1.6%        
CenterPoint Energy, Inc.:        
5.95%, 2/01/17 USD 750   $ 857,432
6.50%, 5/01/18   775   922,291
        1,779,723
Multiline Retail — 0.3%        
JC Penney Co., Inc., 5.65%, 6/01/20 (c)   360   349,200
Oil, Gas & Consumable Fuels — 13.2%        
Anadarko Petroleum Corp.:        
5.95%, 9/15/16   244   282,099
6.38%, 9/15/17   10   11,884
Berry Petroleum Co., 6.38%, 9/15/22   100   104,000
BP Capital Markets Plc, 3.88%, 3/10/15 (c)   350   374,870
Buckeye Partners LP, 4.88%, 2/01/21   225   232,426
Chesapeake Midstream Partners LP:        
5.88%, 4/15/21   140   133,000
6.13%, 7/15/22   110   105,875
Chesapeake Oilfield Operating LLC,        
6.63%, 11/15/19 (a)(c)   15   14,100
Concho Resources, Inc., 5.50%, 10/01/22   100   100,000
CONSOL Energy, Inc., 6.38%, 3/01/21   105   98,700
Copano Energy LLC, 7.13%, 4/01/21   130   137,150
DCP Midstream LLC, 4.75%, 9/30/21 (a)   325   350,957
El Paso Pipeline Partners Operating Co. LLC:        
6.50%, 4/01/20   340   390,556
5.00%, 10/01/21   125   132,056
Enbridge Energy Partners LP, 9.88%, 3/01/19   475   640,756
Energy XXI Gulf Coast, Inc., 7.75%, 6/15/19   240   247,800
Enterprise Products Operating LLC, 6.65%, 4/15/18 (c)   1,000   1,210,803
Everest Acquisition LLC / Everest Acquisition        
Finance, Inc., 6.88%, 5/01/19 (a)   80   84,000
Forest Oil Corp., 8.50%, 2/15/14   295   317,125
Kinder Morgan Energy Partners LP, 6.85%, 2/15/20   1,000   1,209,390
Kodiak Oil & Gas Corp., 8.13%, 12/01/19 (a)   55   58,300
Linn Energy LLC:        
6.25%, 11/01/19 (a)   260   256,100
7.75%, 2/01/21   110   116,050
Marathon Petroleum Corp., 3.50%, 3/01/16   325   340,898
MarkWest Energy Partners LP, 6.25%, 6/15/22   125   131,563
Newfield Exploration Co., 6.88%, 2/01/20   145   154,063
Nexen, Inc., 6.40%, 5/15/37   295   327,455
Oasis Petroleum, Inc.:        
7.25%, 2/01/19   80   84,800
6.50%, 11/01/21   70   71,400
OGX Petroleo e Gas Participacoes SA,        
8.50%, 6/01/18 (a)(c)   280   290,500
ONEOK Partners LP, 8.63%, 3/01/19   800   1,046,175
Petrobras International Finance Co.:        
3.88%, 1/27/16   875   915,980
5.38%, 1/27/21   525   575,101
Petrohawk Energy Corp., 10.50%, 8/01/14   145   160,950
Petroleum Geo-Services ASA, 7.38%, 12/15/18 (a)   150   155,250
Phillips 66, 2.95%, 5/01/17 (a)   250   256,530
Pioneer Natural Resources Co.:        
6.65%, 3/15/17   150   170,170
6.88%, 5/01/18   115   135,382
Plains Exploration & Production Co.:        
10.00%, 3/01/16   95   104,500
6.75%, 2/01/22   15   15,600
Precision Drilling Corp., 6.50%, 12/15/21   95   98,800
Premier Oil Plc, 5.00%, 6/09/18   825   851,812
Range Resources Corp., 6.75%, 8/01/20   200   217,000
Ruby Pipeline LLC, 6.00%, 4/01/22 (a)   700   716,751
Samson Investment Co., 9.75%, 2/15/20 (a)   145   151,344
SandRidge Energy, Inc.:        
7.50%, 3/15/21   45   45,450
8.13%, 10/15/22 (a)   50   51,875

See Notes to Financial Statements.

18SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

Corporate Bonds   Par
(000)
  Value
Oil, Gas & Consumable Fuels (concluded)        
SM Energy Co.:        
6.63%, 2/15/19 USD 55   $ 58,025
6.50%, 11/15/21   80   84,400
Targa Resources Partners LP, 6.88%, 2/01/21   115   120,175
Tennessee Gas Pipeline Co., 8.00%, 2/01/16   195   227,311
Western Gas Partners LP, 5.38%, 6/01/21   350   381,867
The Williams Cos., Inc., 8.75%, 3/15/32   170   229,691
        14,778,815
Paper & Forest Products — 2.5%        
Boise Paper Holdings LLC:        
9.00%, 11/01/17   70   77,875
8.00%, 4/01/20   150   165,375
Georgia-Pacific LLC, 8.25%, 5/01/16 (a)   470   519,350
International Paper Co.:        
7.50%, 8/15/21   775   983,902
7.30%, 11/15/39   800   989,883
Longview Fibre Paper & Packaging, Inc.,        
8.00%, 6/01/16 (a)   80   80,800
        2,817,185
Pharmaceuticals — 4.1%        
Capsugel Finance Co. SCA, 9.88%, 8/01/19 (a) EUR 100   145,607
Merck & Co., Inc., 6.50%, 12/01/33 USD 475   654,982
Pfizer, Inc., 7.20%, 3/15/39 (c)   2,080   3,075,224
Roche Holdings, Inc., 7.00%, 3/01/39 (a)(c)   420   596,113
Valeant Pharmaceuticals International,        
6.50%, 7/15/16 (a)   65   67,356
        4,539,282
Real Estate Investment Trusts (REITs) — 2.8%        
AvalonBay Communities, Inc., 6.10%, 3/15/20 (c)   800   952,522
Developers Diversified Realty Corp.:        
4.75%, 4/15/18   155   160,591
7.88%, 9/01/20   175   210,167
ERP Operating LP, 5.75%, 6/15/17   800   920,772
HCP, Inc., 5.38%, 2/01/21   250   275,430
UDR, Inc., 4.25%, 6/01/18   350   371,914
Ventas Realty LP/Ventas Capital Corp.,        
4.75%, 6/01/21   270   278,361
        3,169,757
Real Estate Management & Development — 0.4%        
Realogy Corp. (a)(c):        
7.88%, 2/15/19   135   132,300
7.63%, 1/15/20   145   150,438
Shea Homes LP, 8.63%, 5/15/19 (a)   110   114,675
        397,413
Road & Rail — 1.4%        
Avis Budget Car Rental LLC, 8.25%, 1/15/19   25   26,187
Florida East Coast Railway Corp., 8.13%, 2/01/17   40   41,100
The Hertz Corp., 6.75%, 4/15/19   77   80,369
Norfolk Southern Corp., 6.00%, 3/15/2105 (c)   1,200   1,391,143
        1,538,799
Semiconductors & Semiconductor Equipment — 0.7%        
Advanced Micro Devices, Inc., 7.75%, 8/01/20   190   209,475
KLA-Tencor Corp., 6.90%, 5/01/18   461   557,815
        767,290
Software — 0.1%        
Lawson Software, Inc., 9.38%, 4/01/19 (a)   140   146,300
Specialty Retail — 1.2%        
AutoNation, Inc., 6.75%, 4/15/18   445   482,825
Limited Brands, Inc., 7.00%, 5/01/20   230   255,300
QVC, Inc., 7.38%, 10/15/20 (a)   25   27,375
Sally Holdings LLC, 6.88%, 11/15/19 (a)   140   149,100
VF Corp., 5.95%, 11/01/17   350   417,757
        1,332,357
         
    Par    
Corporate Bonds   (000)   Value
Tobacco — 1.9%        
Altria Group, Inc., 10.20%, 2/06/39 USD 937   $ 1,501,238
Lorillard Tobacco Co., 3.50%, 8/04/16   600   628,723
        2,129,961
Wireless Telecommunication Services — 4.7%        
America Movil SAB de CV, 2.38%, 9/08/16   585   597,002
American Tower Corp.:        
4.50%, 1/15/18   450   475,171
5.90%, 11/01/21   295   331,598
Cricket Communications, Inc., 7.75%, 5/15/16   155   163,137
Crown Castle International Corp., 9.00%, 1/15/15   210   232,050
Crown Castle Towers LLC (a):        
5.50%, 1/15/37   275   303,632
6.11%, 1/15/40   300   342,592
Digicel Group Ltd., 8.25%, 9/01/17 (a)   125   130,312
Nextel Communications, Inc., Series E,        
6.88%, 10/31/13   195   195,000
SBA Tower Trust, 5.10%, 4/15/42 (a)   1,000   1,088,207
Sprint Capital Corp., 6.88%, 11/15/28   230   171,925
Sprint Nextel Corp. (a):        
9.00%, 11/15/18   540   594,675
7.00%, 3/01/20   620   632,400
        5,257,701
Total Corporate Bonds — 108.1%       120,731,484
 
Preferred Securities
Capital Trusts        
Capital Markets — 4.3%        
Ameriprise Financial, Inc., 7.52%, 6/01/66 (b)   500   530,000
State Street Capital Trust III, 5.46% (b)(f)   725   727,842
State Street Capital Trust IV, 1.47%, 6/01/37 (b)   4,740   3,527,380
        4,785,222
Commercial Banks — 2.5%        
Barclays Bank Plc (a)(b)(f):        
5.93%,   425   386,750
7.43%,(c)   150   150,000
BNP Paribas, 7.20% (a)(b)(c)(f)   300   258,000
Credit Agricole SA, 8.38% (a)(b)(c)(f)   350   308,000
Dresdner Funding Trust I, 8.15%, 6/30/31 (a)   530   426,650
M&T Capital Trust II, 8.28%, 6/01/27   910   928,200
National City Preferred Capital Trust I, 12.00% (b)(f)   300   319,320
        2,776,920
Diversified Financial Services — 2.0%        
JPMorgan Chase Capital XXIII, 1.50%, 5/15/47 (b)   3,085   2,282,965
Electric Utilities — 0.4%        
PPL Capital Funding, 6.70%, 3/30/67 (b)   500   495,000
Insurance — 8.8%        
Ace Capital Trust II, 9.70%, 4/01/30   500   683,396
The Allstate Corp., 6.50%, 5/15/67 (b)   500   488,750
American International Group, Inc., 8.18%, 5/15/68 (b) 225   240,469
AXA SA, 6.38% (a)(b)(f)   1,000   795,000
Chubb Corp., 6.38%, 3/29/67 (b)(c)   500   511,875
Farmers Exchange Capital, 7.05%, 7/15/28 (a)   500   553,446
Great-West Life & Annuity Insurance Co.,        
7.15%, 5/16/46 (a)(b)   500   500,000
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(b)   500   680,000
Lincoln National Corp., 7.00%, 5/17/66 (b)   500   485,000
MetLife, Inc., 6.40%, 12/15/66   500   489,107
Mitsui Sumitomo Insurance Co., Ltd.,        
7.00%, 3/15/72 (a)(b)   320   328,777

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201219
 

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

Capital Trusts   Par
(000)
  Value
Insurance (concluded)        
Northwestern Mutual Life Insurance,        
6.06%, 3/30/40 (a)(c) USD 900   $ 1,072,333
Reinsurance Group of America, 6.75%, 12/15/65 (b)   700   647,712
Swiss Re Capital I LP, 6.85% (a)(b)(f)   450   413,844
ZFS Finance (USA) (a)(b):        
Trust II, 6.45%, 12/15/65   1,800   1,764,000
Trust IV, 5.88%, 5/09/62   146   146,182
        9,799,891
Multi-Utilities — 0.9%        
Dominion Resources Capital Trust I, 7.83%, 12/01/27   500   513,032
Dominion Resources, Inc., 7.50%, 6/30/66 (b)   500   532,500
        1,045,532
Oil, Gas & Consumable Fuels — 1.3%        
Enterprise Products Operating LLC, 8.38%, 8/01/66 (b)   825   895,125
TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b)   500   521,946
        1,417,071
Total Capital Trusts — 20.2%       22,602,601
 
Preferred Stocks   Shares    
Auto Components — 0.1%        
Dana Holding Corp., 4.00% (a)   1,000   125,375
Diversified Financial Services — 0.4%        
Ally Financial, Inc., 7.00% (a)   510   432,863
Thrifts & Mortgage Finance — 0.0%        
Fannie Mae, Series S, 8.25% (b)(g)   3,000   3,690
Freddie Mac, Series Z, 8.38% (b)(g)   3,000   3,750
        7,440
Wireless Telecommunication Services — 2.9%        
Centaur Funding Corp., 9.08% (a)   2,720   3,223,200
Total Preferred Stocks — 3.4%       3,788,878
 
Trust Preferreds — 0.3%
Diversified Financial Services — 0.3%        
GMAC Capital Trust I, Series 2, 8.13% (b)   13,680   321,770
Total Preferred Securities — 23.9%       26,713,249
       
Taxable Municipal Bonds — 0.9%   Par
(000)
   
Metropolitan Transportation Authority, RB,        
6.55%, 11/15/31 USD 800   981,208
 
US Government Sponsored
Agency Securities — 0.3%        
Agency Obligations — 0.3%        
Fannie Mae, 4.23%, 10/09/19 (c)(h)   390   314,003
         
US Treasury Obligations   Par
(000)
  Value
US Treasury Bonds (c):        
3.75%, 8/15/41 USD 236   $ 266,459
3.13%, 11/15/41   740   742,312
US Treasury Notes, 0.88%, 12/31/16 (c)   901   906,350
Total US Treasury Obligations — 1.7%       1,915,121
Total Long-Term Investments        
(Cost — $143,090,707) — 136.0%       151,909,873
 
Short-Term Securities   Shares    
BlackRock Liquidity Funds, TempFund,        
Institutional Class, 0.15% (i)(j)   621,268   621,268
Total Short-Term Securities        
(Cost — $621,268) — 0.6%       621,268
 
Options Purchased   Contracts    
Exchange-Traded Put Options — 0.0%        
S&P 500 Index, Strike Price USD 1,200.00,        
Expires 6/16/12   67   17,420
    Notional
Amount
(000)
   
Over-the-Counter Interest Rate Call Swaptions — 0.0%        
Receive a fixed rate of 2.40% and pay a floating rate        
based on 3-month LIBOR, expires 5/11/12,        
Broker Citibank NA USD 1,300   46
Receive a fixed rate of 2.61% and pay a floating rate        
based on 3-month LIBOR, expires 4/05/13,        
Broker Citibank NA   800   37,051
        37,097
Over-the-Counter Interest Rate Put Swaptions — 0.1%        
Receive a fixed rate of 2.61% and pay a floating rate        
based on 3-month LIBOR, expires 4/05/13,        
Broker Citibank NA   800   16,824
Pay a fixed rate of 4.50% and receive a floating rate        
based on 3-month LIBOR, Expires 9/16/13,        
Broker Credit Suisse Securities (USA) LLC EUR 1,300   6,516
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   7,984
Pay a fixed rate of 4.50% and receive a floating rate        
based on 3-month LIBOR, Expires 12/12/13,        
Broker Credit Suisse Securities (USA) LLC   900   7,148
Pay a fixed rate of 4.50% and receive a floating rate        
based on 3-month LIBOR, Expires 2/02/17,        
Broker Deutsche Bank AG USD 1,200   40,277
        78,749
Total Options Purchased        
(Cost — $429,102) — 0.1%       133,266
Total Investments Before Options Written        
(Cost — $144,141,077) — 136.7%       152,664,407

See Notes to Financial Statements.

20SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

Options Written   Contracts   Value
Over-the-Counter Call Options — (0.0)%          
S&P 500 Index, Strike Price USD 1,450.00,          
Expires 6/15/12, Broker Deutsche Bank AG   1,700   $ (12,394 )
    Notional
Amount
(000)
     
Over-the-Counter Interest Rate Put Swaptions — (0.0)%          
Receive a fixed rate of 6.00% and pay a floating rate          
based on 3-month LIBOR, Expires 2/02/17,          
Broker Deutsche Bank AG USD 2,400   (35,633 )
Total Options Written          
(Premiums Received — $66,010) — (0.0)%       (48,027 )
Total Investments, Net of Options Written — 136.7%       152,616,380  
Liabilities in Excess of Other Assets — (36.7)%       (40,980,708 )
Net Assets — 100.0%       $ 111,635,672  
             

(a)Security exempt from registration pursuant to Rule 144A under 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 step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown is as of report date.
(e)Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(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 period, 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,
2011
Net
Activity
Shares
Held at
April 30,
2012
Income
BlackRock Liquidity        
Funds, TempFund,        
Institutional Class 1,362,932 (741,664) 621,268 $ 926

(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.
Reverse repurchase agreements outstanding as of April 30, 2012 were as follows:
Counterparty Interest
Rate
Trade
Date
Maturity
Date
Net Closing
Amount
Face
Amount
Deutsche Bank AG (0.50)% 1/17/12 Open $ 107,168 $ 107,325
UBS Securities LLC (1.25)% 2/02/12 Open 122,508 122,887
Credit Suisse          
Securities          
(USA) LLC 0.35% 2/15/12 Open 950,524 949,823
Credit Suisse          
Securities          
(USA) LLC 0.35% 2/22/12 Open 1,052,581 1,051,875
UBS Securities LLC 0.35% 2/28/12 Open 2,509,536 2,508,000
UBS Securities LLC 0.38% 2/28/12 Open 2,609,046 2,607,312
Credit Suisse          
Securities          
(USA) LLC (0.25)% 3/07/12 Open 295,987 296,100
BNP Paribas          
Securities Corp. 0.35% 3/12/12 Open 1,354,083 1,353,425
UBS Securities LLC 0.32% 3/13/12 Open 544,737 544,500
UBS Securities LLC 0.38% 3/13/12 Open 602,937 602,625
Deutsche Bank AG 0.17% 3/14/12 Open 721,664 721,500
Credit Suisse          
Securities          
(USA) LLC 0.30% 3/21/12 Open 1,388,224 1,387,750
Credit Suisse          
Securities          
(USA) LLC 0.35% 3/21/12 Open 707,282 707,000
Credit Suisse          
Securities          
(USA) LLC 0.38% 3/21/12 Open 6,194,048 6,191,369
Barclays          
Capital, Inc. 0.35% 3/22/12 Open 662,870 662,613
UBS Securities LLC 0.35% 3/23/12 Open 92,415 92,380
Credit Suisse          
Securities          
(USA) LLC 0.35% 3/27/12 Open 332,607 332,494
Barclays          
Capital, Inc. (1.00)% 4/03/12 Open 147,195 147,309
UBS Securities LLC 0.10% 4/16/12 Open 174,007 174,000
Barclays          
Capital, Inc. 0.35% 4/18/12 Open 3,329,295 3,328,875
UBS Securities LLC 0.34% 4/23/12 Open 3,877,368 3,877,075
UBS Securities LLC 0.35% 4/23/12 Open 374,442 374,412
Credit Suisse          
Securities          
(USA) LLC 0.35% 4/23/12 Open 602,297 602,250
Deutsche Bank AG 0.00% 4/24/12 Open 53,400 53,400
Deutsche Bank AG 0.12% 4/24/12 Open 907,779 907,758
UBS Securities LLC 0.34% 4/24/12 Open 332,522 332,500
Barclays          
Capital, Inc. 0.35% 4/25/12 Open 1,351,579 1,351,500
BNP Paribas          
Securities Corp. 0.19% 4/25/12 Open 265,803 265,795
BNP Paribas          
Securities Corp. 0.23% 4/25/12 Open 311,037 311,025
BNP Paribas          
Securities Corp. 0.37% 4/25/12 Open 2,044,126 2,044,000
BNP Paribas          
Securities Corp. 0.35% 4/25/12 Open 250,015 250,000
UBS Securities LLC 0.25% 4/26/12 Open 246,008 246,000
UBS Securities LLC 0.35% 4/26/12 Open 1,263,936 1,263,875
UBS Securities LLC 0.38% 4/26/12 Open 6,808,960 6,808,600
Deutsche Bank AG 0.25% 4/26/12 Open 324,011 324,000
Total       $ 42,911,997 $ 42,901,352

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201221
 

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

Financial futures contracts purchased as of April 30, 2012 were as follows:
Contracts Issue Exchange Expiration Notional
Value
Unrealized
Appreciation
32 5-Year US
Treasury Note 
Chicago Board
of Trade
June 2012 USD  3,961,500 $ 16,939

• Financial futures contracts sold as of April 30, 2012 were as follows:

Contracts Issue Exchange Expiration Notional
Value
Unrealized
Depreciation
1 Euro-Bund Eurex June 2012 EUR  186,761 $ (3,312)
95 10-Year US Chicago Board        
  Treasury Note of Trade June 2012 USD    12,566,719 (125,493)
10 30-Year US Chicago Board        
  Treasury Bond of Trade June 2012 USD  1,428,750 (11,376)
33 Ultra Long Term Chicago Board        
  US Treasury Bond of Trade June 2012 USD  5,207,812 (95,023)
Total           $ (235,204)

Foreign currency exchange contracts as of April 30, 2012 were as follows:
Currency
Purchased
Currency
Sold
Counterparty Settlement
Date
Unrealized
Depreciation
USD   326,700 EUR   247,500 Citibank NA 7/25/12 $ (1,070)

Credit default swaps on single-name issues — buy protection outstanding as of April 30, 2012 were as follows:
Issuer Pay
Fixed
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Depreciation
STMicroelectronics NV 1.00% Deutsche        
Bank AG 12/20/16 EUR 285 $ (4,560)
Southwest   Goldman        
Airlines Co. 1.00% Sachs & Co. 12/20/16 USD 280 (7,023)
Southwest   Royal Bank        
Airlines Co. 1.00% of Scotland Plc 12/20/16 USD 280 (8,111)
Time Warner Inc. 1.00% Credit Suisse        
    Securities        
    (USA) LLC 3/20/17 USD 1,700 (1,527)
Emerson Electric   Morgan Stanley        
Co. 1.00% & Co., Inc. 3/20/17 USD 545 (4,329)
Total           $ (25,550)

Credit default swaps on single-name issues — sold protection outstanding as of April 30, 2012 were as follows:
Issuer Receive
Fixed
Rate
Counterparty Expiration
Date
Issuer
Credit
Rating
1
Notional
Amount
(000)2
Unrealized
Appreciation
(Depreciation)
Aviva USA   Deutsche        
Corp. 1.00% Bank AG 5/25/12 A USD 650 $ (9 )
DIRECTV   Credit Suisse        
Holdings   Securities        
LLC 1.00% (USA) LLC 3/20/17 BBB USD 1,700   28,680  
MetLife, Inc.   Deutsche        
  1.00% Bank AG 3/20/18 A- USD 200   (4,175 )
Total           $ 24,496  

1Using S&P’s rating.
2The 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 - sold protection outstanding as of April 30, 2012 were as follows:
Index Receive
Fixed

Rate
Counterparty Expiration
Date
Credit
Rating
3
Notional
Amount
(000)4
Unrealized
Appreciation
Dow Jones CDX            
North America            
High Yield Index   Credit Suisse        
Series 18,   Securities        
Version 1 5.00% (USA) LLC 6/20/17 B+ USD 435 $ 6,585

3Using S&P’s rating of the underlying securities.
4The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement.
Interest rate swaps outstanding as of April 30, 2012 were as follows:
Fixed
Rate
Floating
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Appreciation
(Depreciation)
1.17%5 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 4/11/17 USD 1,700 $ (7,163)
1.18%5 3-month          
  LIBOR Deutsche Bank AG 4/11/17 USD 4,900 (23,018)
2.35%5 3-month          
  LIBOR Deutsche Bank AG 3/19/22 USD 3,200 (94,174)
4.03%5 3-month          
  LIBOR UBS AG 4/18/22 USD 1,400 (207,653)
2.05%6 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 5/02/22 USD 1,400 — 
2.05%6 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 5/02/22 USD 900 458 
Total           $ (331,550)

5Fund pays a fixed interest rate and receives floating rate.
6Fund 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 into 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 is not necessarily an indication of the risks associated with 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.

22SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

The following tables summarize the inputs used as of April 30, 2012 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      $705,558   $549,250   $1,254,808 
Corporate                    
Bonds       119,879,672    851,812    120,731,484 
Preferred                    
Securities  $329,210    26,384,039        26,713,249 
Taxable                    
Municipal                    
Bonds       981,208        981,208 
US Government                    
Sponsored                    
Agency                    
Securities       314,003        314,003 
US Treasury                    
Obligations       1,915,121        1,915,121 
Short-Term                    
Securities   621,268            621,268 
Total  $950,478   $150,179,601   $1,401,062   $152,531,141 
                     
Valuation Inputs   Level 1    Level 2    Level 3    Total 
Derivative Financial Instruments1                    
Assets:                    
Equity                    
contracts  $17,420           $17,420 
Interest rate                    
contracts   16,939   $116,304        133,243 
Credit                    
contracts       35,265        35,265 
Liabilities:                    
Equity                    
contracts       (12,394)       (12,394)
Interest rate                    
contracts   (235,204)   (367,641)       (602,845)
Foreign                    
currency                    
exchange                    
contracts       (1,070)       (1,070)
Credit                    
contracts       (29,725)  $(9)   (29,734)
Total  $(200,845)  $(259,261)  $(9)  $(460,115)

1Derivative 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 in determining fair value:

   Asset-Backed
Securities
  Corporate
Bonds
  Total
Assets:               
Balance, as of October 31, 2011  $503,750   $858,000   $1,361,750 
Accrued discounts/premiums            
Net realized gain (loss)   10,695        10,695 
Net change in unrealized appreciation/depreciation2   34,805    (6,188)   28,617 
Purchases            
Sales            
Transfers in3            
Transfers out3            
Balance, as of April 30, 2012  $549,250   $851,812   $1,401,062 

2Included 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 April 30, 2012 was $886,618.
3The 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 table is a reconciliation of Level 3 derivative financial instruments for which significant unobservable inputs were used in determining fair value:

   Credit
Contracts
Assets/Liabilities:     
Balance, as of October 31, 2011  $1,175 
Accrued discounts/premiums   2,105 
Net realized gain (loss)    
Net change in unrealized appreciation/depreciation4   (1,184)
Purchases    
Issuances5    
Sales    
Settlements6   (2,105)
Transfers in3    
Transfers out3    
Balance, as of April 30, 2012  $(9)

4Included 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 April 30, 2012 was $(1,184).
5Issuances represent upfront cash received on certain derivative financial instruments.
6Settlements 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 period in relation to net assets.

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201223
 

Schedule of Investments April 30, 2012 (Unaudited) BlackRock Credit Allocation Income Trust II, Inc. (PSY)
  (Percentages shown are based on Net Assets)

Asset-Backed Securities   Par
(000)
  Value
321 Henderson Receivables I LLC, Series 2012-1A,        
Class A, 4.21%, 2/16/65 (a) USD 1,034   $ 1,064,160
Atrium CDO Corp., Series 5A, Class A4,        
0.88%, 7/20/20 (a)(b)   2,650   2,239,250
SLM Student Loan Trust, Series 2004-B, Class A2,        
0.67%, 6/15/21 (b)   1,968   1,887,501
Total Asset-Backed Securities — 1.1%       5,190,911
 
Corporate Bonds
Aerospace & Defense — 1.1%        
BE Aerospace, Inc., 8.50%, 7/01/18   2,500   2,768,750
Huntington Ingalls Industries, Inc.:        
6.88%, 3/15/18   610   645,075
7.13%, 3/15/21   600   635,250
Kratos Defense & Security Solutions, Inc.,        
10.00%, 6/01/17   1,014   1,090,050
        5,139,125
Airlines — 0.7%        
American Airlines Pass-Through Trust, Series 2011-2,        
Class A, 8.63%, 4/15/23   553   583,597
Continental Airlines Pass-Through Certificates,        
Series 2009-2, Class B, 9.25%, 5/10/17   1,362   1,488,112
Delta Air Lines, Inc., Series 02G1, 6.72%, 7/02/24   1,013   1,066,472
        3,138,181
Auto Components — 0.8%        
Delphi Corp., 6.13%, 5/15/21 (a)   570   607,050
Icahn Enterprises LP:        
8.00%, 1/15/18   2,270   2,426,062
8.00%, 1/15/18   610   642,025
        3,675,137
Beverages — 0.5%        
Constellation Brands, Inc., 7.25%, 5/15/17   1,970   2,226,100
Building Products — 0.3%        
Building Materials Corp. of America (a):        
7.00%, 2/15/20   375   400,313
6.75%, 5/01/21   940   978,775
        1,379,088
Capital Markets — 5.3%        
Ameriprise Financial, Inc., 5.30%, 3/15/20 (c)   3,250   3,633,705
E*Trade Financial Corp., 12.50%, 11/30/17   1,865   2,172,725
The Goldman Sachs Group, Inc. (c):        
5.25%, 7/27/21   1,175   1,189,049
5.75%, 1/24/22   3,415   3,565,923
6.25%, 2/01/41   4,450   4,521,836
Morgan Stanley (c):        
5.75%, 1/25/21   3,915   3,865,804
5.50%, 7/28/21   1,285   1,256,261
Murray Street Investment Trust I, 4.65%, 3/09/17 (d)   600   603,602
UBS AG (c):        
2.25%, 1/28/14   1,627   1,635,443
5.88%, 7/15/16   2,800   2,960,885
        25,405,233
Chemicals — 1.4%        
Ashland, Inc., 9.13%, 6/01/17   45   49,950
Celanese US Holdings LLC, 5.88%, 6/15/21   1,545   1,657,013
Hexion US Finance Corp., 6.63%, 4/15/20 (a)   865   903,925
Ineos Finance Plc (a):        
8.38%, 2/15/19   320   343,200
7.50%, 5/01/20   730   750,075
LyondellBasell Industries NV, 5.75%, 4/15/24 (a)   1,885   1,946,262
Solutia, Inc., 7.88%, 3/15/20   860   1,004,050
        6,654,475

Corporate Bonds   Par
(000)
  Value
Commercial Banks — 5.0%        
Amsouth Bank, Series AI, 4.85%, 4/01/13 USD 1,050   $ 1,065,750
Asciano Finance Ltd., 5.00%, 4/07/18 (a)   900   936,881
Associated Banc-Corp, 5.13%, 3/28/16   2,200   2,329,103
Branch Banking & Trust Co. (b)(c):        
0.79%, 9/13/16   1,100   1,036,798
0.79%, 5/23/17   675   629,524
CIT Group, Inc.:        
7.00%, 5/02/16 (a)   1,570   1,573,925
7.00%, 5/02/17 (a)   1,250   1,253,125
5.25%, 3/15/18   1,190   1,225,700
5.50%, 2/15/19 (a)   1,040   1,068,600
City National Corp., 5.25%, 9/15/20 (c)   2,350   2,511,328
Discover Bank, 8.70%, 11/18/19   1,200   1,513,566
HSBC Finance Corp., 6.68%, 1/15/21   1,525   1,646,979
Regions Financial Corp.:        
4.88%, 4/26/13   2,525   2,600,750
5.75%, 6/15/15   1,800   1,899,000
SVB Financial Group, 5.38%, 9/15/20   2,300   2,530,609
        23,821,638
Commercial Services & Supplies — 4.0%        
Aviation Capital Group Corp. (a):        
7.13%, 10/15/20 (c)   9,300   9,512,034
6.75%, 4/06/21   2,325   2,300,355
Casella Waste Systems, Inc., 7.75%, 2/15/19   721   710,185
Clean Harbors, Inc., 7.63%, 8/15/16   1,314   1,379,700
Corrections Corp. of America, 7.75%, 6/01/17   3,375   3,661,875
Covanta Holding Corp., 6.38%, 10/01/22   665   684,028
Iron Mountain, Inc., 7.75%, 10/01/19   390   425,100
Mobile Mini, Inc., 7.88%, 12/01/20   275   294,250
        18,967,527
Communications Equipment — 1.0%        
Avaya, Inc., 9.75%, 11/01/15 (c)   900   892,125
Brocade Communications Systems, Inc.,        
6.88%, 1/15/20 (c)   2,965   3,239,262
Hughes Satellite Systems Corp., 6.50%, 6/15/19   420   449,400
        4,580,787
Construction Materials — 0.2%        
HD Supply, Inc., 8.13%, 4/15/19 (a)   900   966,375
Consumer Finance — 5.1%        
American Express Credit Corp., 2.75%, 9/15/15 (c)   5,850   6,069,971
Capital One Bank USA NA, 8.80%, 7/15/19   3,325   4,199,146
Daimler Finance North America LLC, 2.63%, 9/15/16 (a) 3,425   3,541,505
Ford Motor Credit Co. LLC:        
7.00%, 4/15/15   2,580   2,876,700
5.88%, 8/02/21   320   361,628
Inmarsat Finance Plc, 7.38%, 12/01/17 (a)   1,815   1,951,125
SLM Corp., 6.25%, 1/25/16   4,870   5,016,100
Toll Brothers Finance Corp., 5.88%, 2/15/22   410   424,315
        24,440,490
Containers & Packaging — 1.2%        
Ardagh Packaging Finance Plc (a):        
7.38%, 10/15/17   200   216,500
9.13%, 10/15/20   235   254,388
Ball Corp.:        
7.13%, 9/01/16   1,750   1,916,250
6.75%, 9/15/20   2,210   2,442,050
Crown Americas LLC, 6.25%, 2/01/21   825   897,187
Sealed Air Corp., 8.38%, 9/15/21 (a)   130   147,550
        5,873,925
Diversified Financial Services — 6.5%        
Ally Financial, Inc.:        
4.50%, 2/11/14   1,775   1,792,750
8.30%, 2/12/15   1,230   1,349,925
8.00%, 11/01/31   840   961,800

See Notes to Financial Statements.

24SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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)        
Bank of America Corp.:        
3.75%, 7/12/16 (c) USD 1,395   $ 1,389,001
5.30%, 3/15/17 (c)   3,640   3,796,327
5.00%, 5/13/21   50   49,766
Citigroup, Inc. (c):        
6.38%, 8/12/14   1,300   1,401,913
4.59%, 12/15/15   975   1,021,216
4.45%, 1/10/17   2,680   2,799,536
DPL, Inc., 7.25%, 10/15/21 (a)   1,080   1,198,800
General Motors Financial Co., Inc., 6.75%, 6/01/18   500   532,515
ING Bank NV, 5.00%, 6/09/21 (a)(c)   2,350   2,393,759
Intesa Sanpaolo SpA:        
2.38%, 12/21/12   3,500   3,450,468
6.50%, 2/24/21 (a)(c)   475   431,565
Moody’s Corp., 6.06%, 9/07/17   6,000   6,309,798
Reynolds Group Issuer, Inc. (a):        
7.13%, 4/15/19   245   256,025
7.88%, 8/15/19   870   939,600
9.88%, 8/15/19   305   317,963
6.88%, 2/15/21   215   221,450
WMG Acquisition Corp., 9.50%, 6/15/16 (a)   205   223,963
        30,838,140
Diversified Telecommunication Services — 3.9%        
AT&T, Inc., 6.30%, 1/15/38 (c)   4,000   4,793,912
Level 3 Financing, Inc. (a):        
8.13%, 7/01/19   3,149   3,235,597
8.63%, 7/15/20   650   680,875
Telecom Italia Capital SA, 6.18%, 6/18/14   975   1,006,493
Telefonica Emisiones SAU, 5.46%, 2/16/21   1,360   1,278,176
Verizon Communications, Inc. (c):        
1.95%, 3/28/14   3,650   3,735,242
7.35%, 4/01/39   2,375   3,257,911
Windstream Corp., 7.88%, 11/01/17   730   806,650
        18,794,856
Electric Utilities — 1.7%        
CMS Energy Corp., 5.05%, 3/15/22   1,125   1,145,140
Great Plains Energy, Inc., 5.29%, 6/15/22 (d)   1,650   1,803,704
Progress Energy, Inc., 7.00%, 10/30/31 (c)   4,000   5,221,348
        8,170,192
Electronic Equipment, Instruments & Components — 0.3%      
Jabil Circuit, Inc., 8.25%, 3/15/18   800   932,000
NXP BV, 3.22%, 10/15/13 (b)   400   400,000
        1,332,000
Energy Equipment & Services — 2.9%        
Atwood Oceanics, Inc., 6.50%, 2/01/20   110   115,775
Energy Transfer Partners LP, 5.20%, 2/01/22   3,000   3,197,685
Ensco Plc, 4.70%, 3/15/21 (c)   1,965   2,144,122
Frac Tech Services LLC, 7.13%, 11/15/18 (a)   1,085   1,120,262
Hornbeck Offshore Services, Inc., 5.88%, 4/01/20 (a) 285   284,288
Key Energy Services, Inc., 6.75%, 3/01/21   745   767,350
MEG Energy Corp., 6.50%, 3/15/21 (a)   955   1,005,138
Oil States International, Inc., 6.50%, 6/01/19   505   534,038
Peabody Energy Corp., 6.25%, 11/15/21 (a)   1,555   1,574,437
Transocean, Inc.:        
6.50%, 11/15/20   1,125   1,291,978
6.38%, 12/15/21   1,375   1,610,115
        13,645,188
Food & Staples Retailing — 0.8%        
Wal-Mart Stores, Inc. (c):        
5.25%, 9/01/35   2,500   2,871,985
6.20%, 4/15/38   875   1,145,119
        4,017,104

Corporate Bonds   Par
(000)
  Value
Food Products — 0.9%        
Kraft Foods, Inc.:        
6.50%, 8/11/17 USD 1,665   $ 2,020,319
6.13%, 8/23/18   1,660   2,007,772
Smithfield Foods, Inc., 10.00%, 7/15/14   374   437,580
        4,465,671
Gas Utilities — 0.2%        
El Paso Natural Gas Co., 8.63%, 1/15/22   695   879,631
Health Care Equipment & Supplies — 0.6%        
Fresenius US Finance II, Inc., 9.00%, 7/15/15 (a)   2,250   2,579,062
Teleflex, Inc., 6.88%, 6/01/19   490   524,300
        3,103,362
Health Care Providers & Services — 3.7%        
Aetna, Inc., 6.75%, 12/15/37 (c)   1,700   2,206,986
Aviv Healthcare Properties LP, 7.75%, 2/15/19   460   478,400
HCA, Inc.:        
8.50%, 4/15/19   240   269,250
6.50%, 2/15/20   2,380   2,546,600
7.25%, 9/15/20   3,435   3,804,263
INC Research LLC, 11.50%, 7/15/19 (a)   695   682,838
inVentiv Health, Inc., 10.00%, 8/15/18 (a)   270   242,075
Tenet Healthcare Corp.:        
10.00%, 5/01/18   1,530   1,767,150
8.88%, 7/01/19   1,125   1,261,406
UnitedHealth Group, Inc., 6.88%, 2/15/38 (c)   3,400   4,554,983
        17,813,951
Health Care Technology — 0.9%        
Amgen, Inc.:        
5.15%, 11/15/41 (c)   4,208   4,385,355
5.65%, 6/15/42   42   46,723
        4,432,078
Household Durables — 0.2%        
Standard Pacific Corp., 8.38%, 1/15/21   890   938,950
Independent Power Producers & Energy Traders — 1.1%        
AES Corp.:        
9.75%, 4/15/16   985   1,162,300
7.38%, 7/01/21 (a)   135   150,188
Calpine Corp., 7.25%, 10/15/17 (a)   440   469,700
Energy Future Intermediate Holding Co. LLC,        
10.00%, 12/01/20   1,880   2,075,050
Laredo Petroleum, Inc.:        
9.50%, 2/15/19   295   329,662
7.38%, 5/01/22 (a)   265   274,275
QEP Resources, Inc., 5.38%, 10/01/22   569   569,000
        5,030,175
Insurance — 6.3%        
American International Group, Inc.:        
3.80%, 3/22/17 (c)   1,500   1,549,227
8.25%, 8/15/18   625   757,269
6.40%, 12/15/20 (c)   2,590   2,975,027
Aon Corp., 5.00%, 9/30/20 (c)   4,600   5,111,092
Fairfax Financial Holdings Ltd., 5.80%, 5/15/21 (a)   2,800   2,720,516
Forethought Financial Group, Inc., 8.63%, 4/15/21 (a)   1,000   1,022,712
Genworth Financial, Inc., 7.63%, 9/24/21   970   957,776
ING Verzekeringen NV, 2.69%, 6/21/21 (b) EUR 430   532,194
Manulife Financial Corp., 4.90%, 9/17/20 (c) USD 4,700   4,911,420
MPL 2 Acquisition Canco, Inc., 9.88%, 8/15/18 (a)   430   370,875
Principal Financial Group, Inc., 8.88%, 5/15/19   980   1,269,309
Prudential Financial, Inc., 6.63%, 12/01/37 (c)   3,400   3,942,871
XL Group Ltd., 5.75%, 10/01/21   3,430   3,793,282
        29,913,570

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201225
 

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

Corporate Bonds   Par
(000)
  Value
IT Services — 0.7%        
Epicor Software Corp., 8.63%, 5/01/19 USD 720   $ 745,200
Fidelity National Information Services, Inc.,        
5.00%, 3/15/22 (a)   320   320,000
First Data Corp.:        
7.38%, 6/15/19 (a)   935   956,037
8.25%, 1/15/21 (a)   85   83,725
12.63%, 1/15/21   710   711,775
SunGard Data Systems, Inc., 7.38%, 11/15/18   730   779,275
        3,596,012
Life Sciences Tools & Services — 1.9%        
Bio-Rad Laboratories, Inc., 8.00%, 9/15/16   3,825   4,226,625
Life Technologies Corp., 6.00%, 3/01/20 (c)   4,200   4,883,613
        9,110,238
Machinery — 1.1%        
Ingersoll-Rand Global Holding Co., Ltd., 9.50%, 4/15/14 3,400   3,907,766
UR Financing Escrow Corp. (a):        
5.75%, 7/15/18   235   242,638
7.38%, 5/15/20   600   630,000
7.63%, 4/15/22   548   579,510
        5,359,914
Media — 8.7%        
AMC Networks, Inc., 7.75%, 7/15/21 (a)   395   441,412
CCH II LLC, 13.50%, 11/30/16   2,317   2,618,210
Comcast Corp., 6.30%, 11/15/17 (c)   3,400   4,124,258
Cox Communications, Inc., 8.38%, 3/01/39 (a)   3,400   4,881,669
CSC Holdings LLC:        
8.50%, 4/15/14   680   749,700
8.63%, 2/15/19   1,200   1,362,000
DIRECTV Holdings LLC, 5.00%, 3/01/21   2,575   2,815,884
DISH DBS Corp., 7.00%, 10/01/13   1,750   1,874,687
Intelsat Jackson Holdings SA, 7.25%, 4/01/19   190   198,075
Intelsat Luxemburg SA:        
11.25%, 2/04/17   620   643,250
11.50%, 2/04/17 (e)   400   417,000
The Interpublic Group of Cos., Inc., 10.00%, 7/15/17 1,175   1,338,031
Kabel BW Erste Beteiligungs GmbH, 7.50%, 3/15/19 (a) 1,040   1,110,200
News America, Inc., 6.15%, 3/01/37 (c)   4,200   4,665,146
Time Warner Cable, Inc., 6.75%, 6/15/39   4,050   4,883,470
Time Warner, Inc., 7.70%, 5/01/32   4,150   5,437,135
Unitymedia Hessen GmbH & Co. KG (FKA UPC        
Germany GmbH), 8.13%, 12/01/17 (a)   1,030   1,104,675
Virgin Media Secured Finance Plc, 6.50%, 1/15/18   2,675   2,915,750
        41,580,552
Metals & Mining — 2.2%        
Alcoa, Inc., 5.40%, 4/15/21 (c)   580   609,585
Barrick Gold Corp., 2.90%, 5/30/16 (c)   1,150   1,205,908
Barrick North America Finance LLC, 5.70%, 5/30/41 (c) 1,325   1,460,015
Freeport-McMoRan Copper & Gold, Inc.,        
3.55%, 3/01/22   1,400   1,383,316
Freeport-McMoRan Corp., 7.13%, 11/01/27   2,900   3,578,687
New Gold, Inc., 7.00%, 4/15/20 (a)   130   132,925
Novelis, Inc., 8.75%, 12/15/20   975   1,074,938
Teck Resources Ltd., 10.75%, 5/15/19   874   1,081,575
        10,526,949
Multi-Utilities — 1.6%        
CenterPoint Energy, Inc.:        
5.95%, 2/01/17   3,150   3,601,212
6.50%, 5/01/18   3,350   3,986,678
        7,587,890
Multiline Retail — 0.7%        
JC Penney Co., Inc., 5.65%, 6/01/20 (c)   3,235   3,137,950

    Par    
Corporate Bonds   (000)   Value
Oil, Gas & Consumable Fuels — 13.6%        
Anadarko Petroleum Corp.:        
5.95%, 9/15/16 USD 994   $ 1,149,207
6.38%, 9/15/17   23   27,334
Berry Petroleum Co., 6.38%, 9/15/22   425   442,000
BP Capital Markets Plc (c):        
3.88%, 3/10/15   1,500   1,606,585
3.20%, 3/11/16   1,875   1,997,512
Buckeye Partners LP, 4.88%, 2/01/21   1,000   1,033,005
Chesapeake Midstream Partners LP:        
5.88%, 4/15/21   595   565,250
6.13%, 7/15/22   475   457,188
Chesapeake Oilfield Operating LLC, 6.63%, 11/15/19 (a) 40   37,600
Concho Resources, Inc., 5.50%, 10/01/22   420   420,000
CONSOL Energy, Inc., 6.38%, 3/01/21   450   423,000
Copano Energy LLC, 7.13%, 4/01/21   560   590,800
DCP Midstream LLC, 4.75%, 9/30/21 (a)   1,200   1,295,840
El Paso Pipeline Partners Operating Co. LLC:        
6.50%, 4/01/20   1,530   1,757,503
5.00%, 10/01/21   525   554,635
Enbridge Energy Partners LP, 9.88%, 3/01/19   2,100   2,832,818
Energy XXI Gulf Coast, Inc., 7.75%, 6/15/19   1,025   1,058,312
Enterprise Products Operating LLC, 6.65%, 4/15/18   4,200   5,085,373
Everest Acquisition LLC/Everest Acquisition        
Finance, Inc., 6.88%, 5/01/19 (a)   340   357,000
Forest Oil Corp., 8.50%, 2/15/14   1,240   1,333,000
Kinder Morgan Energy Partners LP, 6.85%, 2/15/20   4,200   5,079,438
Kodiak Oil & Gas Corp., 8.13%, 12/01/19 (a)   230   243,800
Linn Energy LLC:        
6.25%, 11/01/19 (a)   1,125   1,108,125
7.75%, 2/01/21   450   474,750
Marathon Petroleum Corp., 3.50%, 3/01/16   1,375   1,442,261
MarkWest Energy Partners LP, 6.25%, 6/15/22   530   557,825
Newfield Exploration Co., 6.88%, 2/01/20   595   632,188
Nexen, Inc., 6.40%, 5/15/37   1,380   1,531,822
Oasis Petroleum, Inc.:        
7.25%, 2/01/19   340   360,400
6.50%, 11/01/21   305   311,100
OGX Petroleo e Gas Participacoes SA,        
8.50%, 6/01/18 (a)(c)   1,600   1,660,000
ONEOK Partners LP, 8.63%, 3/01/19   3,400   4,446,245
Petrobras International Finance Co.:        
3.88%, 1/27/16   3,725   3,899,457
5.38%, 1/27/21   2,200   2,409,946
Petrohawk Energy Corp., 10.50%, 8/01/14   615   682,650
Petroleum Geo-Services ASA, 7.38%, 12/15/18 (a)   445   460,575
Phillips 66, 2.95%, 5/01/17 (a)   1,060   1,087,689
Pioneer Natural Resources Co.:        
6.65%, 3/15/17   650   737,403
6.88%, 5/01/18   490   576,844
Plains Exploration & Production Co.:        
10.00%, 3/01/16   405   445,500
6.75%, 2/01/22   55   57,200
Precision Drilling Corp., 6.50%, 12/15/21   425   442,000
Premier Oil Plc, 5.00%, 6/09/18   3,400   3,510,500
Range Resources Corp., 6.75%, 8/01/20   855   927,675
Ruby Pipeline LLC, 6.00%, 4/01/22 (a)   2,975   3,046,192
Samson Investment Co., 9.75%, 2/15/20 (a)   610   636,687
SandRidge Energy, Inc.:        
7.50%, 3/15/21   200   202,000
8.13%, 10/15/22 (a)   220   228,250
SM Energy Co.:        
6.63%, 2/15/19   220   232,100
6.50%, 11/15/21   345   363,975
Targa Resources Partners LP, 6.88%, 2/01/21   495   517,275
Tennessee Gas Pipeline Co., 8.00%, 2/01/16   831   968,693
Western Gas Partners LP, 5.38%, 6/01/21   1,525   1,663,851
The Williams Cos., Inc., 8.75%, 3/15/32   711   960,651
        64,929,029

See Notes to Financial Statements.

26SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

Corporate Bonds   Par
(000)
  Value
Paper & Forest Products — 2.5%        
Boise Paper Holdings LLC:        
9.00%, 11/01/17 USD 290   $ 322,625
8.00%, 4/01/20   645   711,112
Georgia-Pacific LLC, 8.25%, 5/01/16 (a)   2,040   2,254,200
International Paper Co.:        
7.50%, 8/15/21   3,325   4,221,257
7.30%, 11/15/39   3,400   4,207,004
Longview Fibre Paper & Packaging, Inc.,        
8.00%, 6/01/16 (a)   330   333,300
        12,049,498
Pharmaceuticals — 2.7%        
Capsugel Finance Co. SCA, 9.88%, 8/01/19 (a) EUR 300   436,821
Merck & Co., Inc., 6.50%, 12/01/33 (c) USD 2,070   2,854,340
Pfizer, Inc., 7.20%, 3/15/39 (c)   4,425   6,542,243
Roche Holdings, Inc., 7.00%, 3/01/39 (a)(c)   1,825   2,590,254
Valeant Pharmaceuticals International,        
6.50%, 7/15/16 (a)   250   259,062
        12,682,720
Real Estate Investment Trusts (REITs) — 2.8%        
AvalonBay Communities, Inc., 6.10%, 3/15/20 (c)   3,400   4,048,217
Developers Diversified Realty Corp.:        
4.75%, 4/15/18   645   668,268
7.88%, 9/01/20   775   930,738
ERP Operating LP, 5.75%, 6/15/17   3,405   3,919,036
HCP, Inc., 5.38%, 2/01/21   1,025   1,129,262
UDR, Inc., 4.25%, 6/01/18   1,475   1,567,353
Ventas Realty LP/Ventas Capital Corp., 4.75%, 6/01/21   1,135   1,170,146
        13,433,020
Real Estate Management & Development — 0.4%        
Realogy Corp. (a)(c):        
7.88%, 2/15/19   570   558,600
7.63%, 1/15/20   620   643,250
Shea Homes LP, 8.63%, 5/15/19 (a)   480   500,400
        1,702,250
Road & Rail — 1.4%        
Avis Budget Car Rental LLC, 8.25%, 1/15/19   110   115,225
Florida East Coast Railway Corp., 8.13%, 2/01/17   200   205,500
The Hertz Corp., 6.75%, 4/15/19   338   352,787
Norfolk Southern Corp., 6.00%, 3/15/2105 (c)   5,000   5,796,430
        6,469,942
Semiconductors & Semiconductor Equipment — 0.7%        
Advanced Micro Devices, Inc., 7.75%, 8/01/20   775   854,438
KLA-Tencor Corp., 6.90%, 5/01/18   1,928   2,332,901
        3,187,339
Software — 0.2%        
Lawson Software, Inc., 9.38%, 4/01/19 (a)   960   1,003,200
Specialty Retail — 1.2%        
AutoNation, Inc., 6.75%, 4/15/18   1,965   2,132,025
Limited Brands, Inc., 7.00%, 5/01/20   980   1,087,800
QVC, Inc., 7.38%, 10/15/20 (a)   105   114,975
Sally Holdings LLC, 6.88%, 11/15/19 (a)   595   633,675
VF Corp., 5.95%, 11/01/17   1,475   1,760,547
        5,729,022
Tobacco — 1.9%        
Altria Group, Inc., 10.20%, 2/06/39   3,929   6,294,946
Lorillard Tobacco Co., 3.50%, 8/04/16   2,450   2,567,286
        8,862,232
Wireless Telecommunication Services — 4.5%        
America Movil SAB de CV, 2.38%, 9/08/16   2,675   2,729,880
American Tower Corp.:        
4.50%, 1/15/18   1,925   2,032,675
5.90%, 11/01/21   1,295   1,455,660

Corporate Bonds   Par
(000)
  Value
Wireless Telecommunication Services (concluded)        
Cricket Communications, Inc., 7.75%, 5/15/16 USD 670   $ 705,175
Crown Castle International Corp., 9.00%, 1/15/15   890   983,450
Crown Castle Towers LLC (a):        
5.50%, 1/15/37   1,175   1,297,335
6.11%, 1/15/40   1,300   1,484,564
Nextel Communications, Inc., Series E, 6.88%, 10/31/13 840   840,000
SBA Tower Trust, 5.10%, 4/15/42 (a)   4,225   4,597,675
Sprint Capital Corp., 6.88%, 11/15/28   1,000   747,500
Sprint Nextel Corp. (a):        
9.00%, 11/15/18   1,860   2,048,325
7.00%, 3/01/20   2,670   2,723,400
        21,645,639
Total Corporate Bonds — 105.4%       502,236,345
 
Preferred Securities
Capital Trusts        
Capital Markets — 4.0%        
Ameriprise Financial, Inc., 7.52%, 6/01/66 (b)   2,500   2,650,000
State Street Capital Trust III, 5.46% (b)(f)   2,920   2,931,446
State Street Capital Trust IV, 1.47%, 6/01/37 (b)   18,235   13,569,995
        19,151,441
Commercial Banks — 5.5%        
Barclays Bank Plc, 7.43% (a)(b)(c)(f)   650   650,000
BNP Paribas, 7.20% (a)(b)(c)(f)   1,500   1,290,000
Credit Agricole SA, 8.38% (a)(b)(c)(f)   1,475   1,298,000
Dresdner Funding Trust I, 8.15%, 6/30/31 (a)   2,240   1,803,200
HSBC Capital Funding LP/Jersey Channel Islands,        
10.18% (a)(b)(c)(f)   4,835   6,285,500
M&T Capital Trust II, 8.28%, 6/01/27   3,630   3,702,600
National City Preferred Capital Trust I, 12.00% (b)(f)   1,100   1,170,840
NationsBank Capital Trust III, 1.02%, 1/15/27 (b)   13,470   10,111,848
        26,311,988
Diversified Financial Services — 1.4%        
JPMorgan Chase Capital XXIII, 1.50%, 5/15/47 (b)(c) 8,775   6,493,684
Electric Utilities — 0.6%        
PPL Capital Funding, 6.70%, 3/30/67 (b)   3,000   2,970,000
Insurance — 9.9%        
Ace Capital Trust II, 9.70%, 4/01/30   2,500   3,416,980
The Allstate Corp., 6.50%, 5/15/67 (b)   5,000   4,887,500
American General Capital II, 8.50%, 7/01/30   100   109,301
American International Group, Inc., 8.18%, 5/15/68 (b) 900   961,875
Aon Corp., 8.21%, 1/01/27   2,500   2,920,820
AXA SA, 6.38% (a)(b)(f)   3,000   2,385,000
Bank One Capital III, 8.75%, 9/01/30   2,000   2,790,000
Chubb Corp., 6.38%, 3/29/67 (b)   2,000   2,047,500
Farmers Exchange Capital, 7.05%, 7/15/28 (a)   2,500   2,767,230
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(b)   2,925   3,978,000
Lincoln National Corp., 7.00%, 5/17/66 (b)   3,350