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

BlackRock Global Floating Rate Income Trust

(Exact name of registrant as specified in charter)
 
100 Bellevue Parkway, Wilmington, DE 19809

(Address of principal executive offices) (Zip code)
 
Robert S. Kapito, President
BlackRock Global Floating Rate Income Trust

40 East 52nd Street, New York, NY 10022

(Name and address of agent for service)
 
 

Registrant's telephone number, including area code:    888-825-2257   

Date of fiscal year end:    December 31, 2004   

Date of reporting period:    December 31, 2004   


Item 1. Reports to Shareholders.
The Registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:

FIXED INCOME    LIQUIDITY    EQUITIES    ALTERNATIVES    BLACKROCK SOLUTIONS 

BlackRock
Closed-End Funds
Annual Report

DECEMBER 31, 2004


BlackRock Advantage Term Trust (BAT)

BlackRock Global Floating Rate Income Trust (BGT)

BlackRock Preferred Opportunity Trust (BPP)

 

 

 

 

 

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE

 



TABLE OF CONTENTS

Letter to Shareholders    1 
Trusts’ Summaries    2 
Portfolios of Investments    5 
Financial Statements     
     Statements of Assets and Liabilities    20 
     Statements of Operations    21 
     Statements of Cash Flows    22 
     Statements of Changes in Net Assets    23 
Financial Highlights    24 
Notes to Financial Statements    27 
Report of Independent Registered Public Accounting Firm    34 
Directors/Trustees Information    35 
Dividend Reinvestment Plans    38 
Additional Information    38 



Privacy Principles of the Trusts

     The Trusts are committed to maintaining the privacy of shareholders and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information the Trusts collect, how we protect that information and why, in certain cases, we may share information with select other parties.

     Generally, the Trusts do not receive any non-public personal information relating to their shareholders, although certain non-public personal information of shareholders may become available to the Trusts. The Trusts do not disclose any non-public personal information about their shareholders or former shareholders to anyone, except as permitted by law or as is necessary in order to service shareholder accounts (for example, to a transfer agent or third-party administrator).

     The Trusts restrict access to non-public personal information about their shareholders to BlackRock employees with a legitimate business need for the information. The Trusts maintain physical, electronic and procedural safeguards designed to protect the non-public personal information of their shareholders.


 


LETTER TO SHAREHOLDERS

     December 31, 2004

Dear Shareholder:

     We are pleased to report that during the annual period, the Trusts provided the opportunity to invest in various portfolios of fixed income securities. This report contains the Trusts’ audited financial statements and a listing of the portfolios’ holdings.

     The portfolio management team continuously monitors the fixed income markets and adjusts the portfolios in order to gain exposure to various issuers and security types. This strategy enables the Trusts to move among different sectors, credits and coupons to capitalize on changing market conditions.

     The following table shows the Trusts’ yields, closing market prices per share and net asset values (“NAV”) per share as of December 31, 2004.








                                     Trust (Ticker)  Yield1 Market Price  NAV 







BlackRock Advantage Term Trust (BAT)  6.69 %  $ 10.47  $ 10.49 







BlackRock Global Floating Rate Income Trust (BGT)  6.01   18.63  19.21 







BlackRock Preferred Opportunity Trust (BPP)  7.88   25.39  25.88 








1      Yield is based on market price.

     BlackRock, Inc. (“BlackRock”), a world leader in asset management, has a proven commitment to managing fixed income securities. As of December 31, 2004, BlackRock managed $239 billion in bonds, including 20 open-end and 47 closed-end bond funds. BlackRock is recognized for its emphasis on risk management and proprietary analytics and for its reputation managing money for the world’s largest institutional investors. BlackRock Advisors, Inc., and its affiliate, BlackRock Financial Management, Inc., are wholly owned subsidiaries of BlackRock, Inc.

     On behalf of BlackRock, we thank you for your continued confidence and assure you that we remain committed to excellence in managing your assets.

Sincerely,
 
Laurence D. Fink    Ralph L. Schlosstein 
Chief Executive Officer    President 
BlackRock Advisors, Inc.    BlackRock Advisors, Inc. 

1


CONSOLIDATED TRUST SUMMARIES
DECEMBER 31, 2004

BlackRock Advantage Term Trust (BAT)

Trust Information




Symbol on New York Stock Exchange:  BAT



Initial Offering Date:  April 27, 1990



Termination Date (on or shortly before):  December 31, 2005



Closing Market Price as of 12/31/04:  $10.47  



Net Asset Value as of 12/31/04:  $10.49  



Yield on Closing Market Price as of 12/31/04 ($10.47):1  6.69 % 



Current Monthly Distribution per Share:2  $0.058333  



Current Annualized Distribution per Share:2  $0.699996  



1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
2 The distribution is not constant and is subject to change.

The table below summarizes the changes in the Trust’s market price and NAV:

 
  12/31/04  12/31/03  Change High  Low 







Market Price  $10.47  $11.30  (7.35 )%  $11.47  $10.35 







NAV  $10.49  $11.40  (7.98 )%  $11.48  $10.48 








The following chart shows the portfolio composition of the Trust’s long-term investments:

 Portfolio Composition






Composition  December 31, 2004 December 31, 2003





U.S. Government and Agency Zero     
Coupon Bonds  76 %  72 % 





Agency Multiple Class Mortgage     
Pass-Through Securities  6   4  





Taxable Municipal Bonds  5   5  





Corporate Bonds  5   4  





U.S. Government and Agency Securities  2   1  





Principal Only Mortgage-Backed Securities  2   2  





Commercial Mortgage-Backed Securities  2   2  





Inverse Floating Rate Mortgage Securities  1   1  





Interest Only Mortgage-Backed Securities  1   1  





Mortgage Pass-Through Securities    1  





Stripped Money Market Instruments    7  







2


TRUST SUMMARIES
DECEMBER 31, 2004


BlackRock Global Floating Rate Income Trust (BGT)

Trust Information




Symbol on New York Stock Exchange:  BGT



Initial Offering Date:  August 30, 2004



Closing Market Price as of 12/31/04:  $18.63  



Net Asset Value as of 12/31/04:  $19.21  



Yield on Closing Market Price as of 12/31/04 ($18.63):1  6.01 % 



Current Quarterly Distribution per Share:2  $0.0933  



Current Annualized Distribution per Share:2  $1.1196  



1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
2 The distribution is not constant and is subject to change.

The table below summarizes the Trust’s market price and NAV:

 
  12/31/04  High  Low 




Market Price  $18.63  $ 20.02  $18.33 




NAV  $19.21   $19.29  $19.04 





The following chart shows the portfolio composition of the Trust’s long-term investments and credit quality allocations of the Trust’s corporate bond investments:

Portfolio Composition




Composition  December 31, 2004



Foreign Government Bonds  22 % 



Media  13  



Basic Materials  10  



Consumer Products  9  



Energy  8  



Health Care  7  



Entertainment & Leisure  6  



Telecommunications  5  



Containers & Packaging  3  



Financial Institutions  3  



Real Estate  3  



Technology  2  



Automotive  2  



Building & Development  2  



Conglomerates  1  



Aero & Defense  1  



Ecological Services & Equipment  1  



Industrials  1  



Transportation  1  



 
Corporate Credit Breakdown3

Credit Rating  December 31, 2004



BBB/Baa  21 % 



BB/Ba  20  



B  29  



CCC  2  



Not Rated  28  



_______________
3 Using the higher of S&P’s, Moody’s or Fitch’s rating. Corporate bonds represent approximately 18.1% of December 31, 2004, net assets.

3


CONSOLIDATED TRUST SUMMARIES
DECEMBER 31, 2004

BlackRock Preferred Opportunity Trust (BPP)

Trust Information




Symbol on New York Stock Exchange:  BPP



Initial Offering Date:  February 28, 2003



Closing Market Price as of 12/31/04:  $25.39  



Net Asset Value as of 12/31/04:  $25.88  



Yield on Closing Market Price as of 12/31/04 ($25.39):1  7.88 % 



Current Monthly Distribution per Share:2  $0.166667  



Current Annualized Distribution per Share:2  $2.000004  



1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
2 The distribution is not constant and is subject to change.

The table below summarizes the changes in the Trust’s market price and NAV:

  12/31/04  12/31/03  Change High  Low 







Market Price  $25.39  $24.83  2.26 %  $25.50  $21.25 







NAV  $25.88  $25.58  1.17 %  $26.48  $24.18 








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

Portfolio Composition






Composition  December 31, 2004 December 31, 2003





Financial Institutions  71 %  63 % 





Real Estate  12   9  





Energy  7   13  





Media  3   2  





Consumer Products  2   2  





Telecommunications  1   2  





Automotive  1   1  





Basic Materials  1    





Containers & Packaging  1    





Conglomerates    1  





Transportation    1  





Other  1   6  





Credit Breakdown3

Credit Rating  December 31, 2004 December 31, 2003





AAA/Aaa  1 %  1 % 





AA/Aa  20   16  





A  33   32  





BBB/Baa  27   30  





BB/Ba  10   8  





B  9   12  





Not Rated    1  





3 Using the higher of Standard & Poor’s (“S&P”), Moody’s Investors Service (“Moody’s”) or Fitch Ratings (“Fitch”) rating.

4


CONSOLIDATED PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004

BlackRock Advantage Term Trust (BAT)

  Principal      
Rating1  Amount      
(unaudited)  (000)  Description  Value   







 
    LONG-TERM INVESTMENTS—126.2%     
    Mortgage Pass-Through Securities—0.5%     
  $ 158   Federal Home Loan Mortgage Corp., 6.50%, 8/01/25 - 10/01/25  $ 166,822   
  1   Federal National Mortgage Assoc., 9.50%, 7/01/20  1,239   
  262   Government National Mortgage Assoc., 8.00%, 1/15/26 - 7/15/27  284,745   


 
    Total Mortgage Pass-Through Securities  452,806   


 
    Agency Multiple Class Mortgage Pass-Through Securities—7.9%     
    Federal Home Loan Mortgage Corp.,     
  640      Ser. 2534, Class NG, 3/15/22  640,351   
  1,751      Ser. 2772, Class GF, 4/15/34  1,754,617   
  158      Ser. 2822, Class WZ, 7/15/19  157,195   
  923      Ser. 2822, Class ZH, 5/15/33  926,098   
  2,914      Ser. 2865, Class OA, 8/15/07  2,924,956   
  122   Federal National Mortgage Assoc., Ser. 43, Class E, 4/25/22  126,843   
  1,407   Government National Mortgage Assoc., Ser. 88, Class ZB, 10/20/34  1,402,397   


 
    Total Agency Multiple Class Mortgage Pass-Through Securities  7,932,457   


 
    Inverse Floating Rate Mortgage Securities—1.3%     
    Federal Home Loan Mortgage Corp.,     
  77 2    Ser. 1621, Class SH, 10.542%, 11/15/22  78,270   
  829 2    Ser. 2752, Class SV, 13.164%, 9/15/33  836,230   
  303 2 Federal National Mortgage Assoc., Ser. 190, Class S, 18.21%, 11/25/07  340,031   


 
    Total Inverse Floating Rate Mortgage Securities  1,254,531   


 
    Interest Only Mortgage-Backed Securities—0.7%     
  8,000   Deutsche Mortgage Secs., Inc. Mortgage Loan Trust, Ser. 2, Class AIO, 2/25/06  220,320   
    Federal Home Loan Mortgage Corp.,     
  105      Ser. 1543, Class VU, 4/15/23  13,658   
  139      Ser. 1588, Class PM, 9/15/22  4,335   
  4,189      Ser. 2543, Class IJ, 10/15/12  232,585   
  2,578      Ser. 2620, Class WI, 4/15/33  222,696   
    Federal National Mortgage Assoc.,     
  133      Ser. 188, Class VA, 3/25/13  2,844   
  354      Ser. 194, Class PV, 6/25/08  9,198   
  136      Ser. 223, Class PT, 10/25/23  12,639   


 
    Total Interest Only Mortgage-Backed Securities  718,275   


 
    Principal Only Mortgage-Backed Securities—2.2%     
AAA  10   2 Collateralized Mortgage Obligation Trust, Ser. 29, Class A, 5/23/17  9,497   
    Federal National Mortgage Assoc.,     
  1,444      Ser. 193, Class E, 9/25/23  1,016,159   
  1,353      Ser. 225, Class ME, 11/25/23  1,132,733   


 
    Total Principal Only Mortgage-Backed Securities  2,158,389   


 
    Commercial Mortgage-Backed Securities—2.0%     
Aaa  1,868 3 New York City Mortgage Loan Trust, Multi-Family, Class A2, 6.75%, 6/25/11  1,976,131   


 
    Asset-Backed Securities—0.0%     
NR  397 2,3,4,5 Global Rated Eligible Asset Trust, Ser. A, Class 1, 7.33%, 9/15/07  7,937   
NR  850 2,4,5 Structured Mortgage Asset Residential Trust, Ser. 3, 8.724%, 4/15/06  8,497   


 
    Total Asset-Backed Securities  16,434   


 
    Collateralized Mortgage Obligation Residuals—0.0%     
  10   Federal Home Loan Mortgage Corp., Ser. 1035, Class R, 1/15/21  0   


 
    U.S. Government and Agency Zero Coupon Bonds—96.3%     
  12,407   Aid to Israel, 2/15/05 - 8/15/05  12,290,628   
  11,026   6 Financing Corp. (FICO) Strips, 12/06/05  10,729,996   
    Government Trust Certificates,     
  5,220      Israel, Ser. 2F, 5/15/05  5,167,330   
  13,760      Turkey, Ser. T-1, 5/15/05  13,621,162   
  22,926 6 Resolution Funding Corp., 7/15/05  22,658,225   
  6,216   Tennessee Valley Authority, 11/01/05  6,065,448   

See Notes to Financial Statements.

5


BlackRock Advantage Term Trust (BAT) (continued)

  Principal    
Rating1  Amount    
(unaudited)  (000)  Description  Value  







 
    U.S. Government and Agency Zero Coupon Bonds—(cont’d)   
    U.S. Treasury Strips,   
  $ 18,000 6    8/15/05  $ 17,715,528  
  8,000      11/15/05  7,812,192  


 
    Total U.S. Government and Agency Zero Coupon Bonds  96,060,509  



    Corporate Bonds—5.6%   
    Energy—1.1%   
BBB+  1,000 3 Israel Electric Corp., Ltd., 7.25%, 12/15/06 (Israel)  1,064,520  


 
    Financial Institutions—2.0%   
AA+  950   Citigroup, Inc., 5.75%, 5/10/06  982,347  
NR  1,070 3 Equitable Life Assurance Society, zero coupon, 6/01/05 - 12/01/05  1,033,875  


 
      2,016,222  


 
    Telecommunications—1.1%   
A  1,000   Alltel Corp., 7.50%, 3/01/06  1,048,740  


 
    Transportation—1.4%   
NR  1,453   Union Pacific Corp., zero coupon, 5/01/05  1,435,653  


 
    Total Corporate Bonds  5,565,135  



    U.S. Government and Agency Securities—3.0%   
  360   Small Business Investment Companies, Ser. P10A, Class 1, 6.12%, 2/01/08  375,952  
    U.S. Treasury Notes,   
  1,450      3.50%, 11/15/06  1,462,235  
  1,150      4.00%, 2/15/14  1,134,544  


 
    Total U.S. Government and Agency Securities  2,972,731  


 
    Taxable Municipal Bonds—6.7%   
AAA  1,000   Alameda Cnty. California Pension Oblig., zero coupon, 12/01/05  971,140  
AAA  1,000   Alaska Energy Auth., zero coupon, 7/01/05  989,740  
Aaa  1,067   Kern Cnty. California Pension Oblig., zero coupon, 2/15/05 - 8/15/05  1,046,816  
    Long Beach California Pension Oblig.,   
NR  1,068      zero coupon, 3/01/05 - 9/01/05  1,046,043  
AAA  500      7.09%, 9/01/09  564,328  
    Los Angeles Cnty. California Pension Oblig.,   
Aaa  34      zero coupon, 6/30/05  33,320  
Aaa  1,000      6.77%, 6/30/05  984,350  
AAA  1,000      Ser. A, 8.62%, 6/30/06  1,078,650  


 
    Total Taxable Municipal Bonds  6,714,387  


 
    Total Long-Term Investments (cost $122,868,063)  125,821,785  
    SHORT-TERM INVESTMENT—14.3%   
    U.S. Government and Agency Zero Coupon Bond   
  14,300   Federal Home Loan Bank, zero coupon, 1/03/05 (cost $14,299,007)  14,299,007  


 
    Total investments—140.5% (cost $137,167,070)  $ 140,120,792  
    Liabilities in excess of other assets —(40.5)%  (40,388,065 ) 
     

 
    Net Assets—100%  $ 99,732,727  


 


1      Using the higher of S&P’s, Moody’s or Fitch’s rating.
2      Security interest rate is as of December 31, 2004.
3      Security is not registered under the Securities Act of 1933. These securities may be resold in transactions in accordance with Rule 144A under that Act, to qualified institutional buyers. As of December 31, 2004, the Trust held 4.1% of its net assets, with a current market value of $4,082,463, in securities restricted as to resale.
4      Security is fair valued.
5      Illiquid securities representing 0.02% of net assets.
6      Entire or partial principal amount pledged as collateral for reverse repurchase agreements.

Details of open reverse repurchase agreements are disclosed in Note 4 in the Notes to Financial Statements.

See Notes to Financial Statements.

6


PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004


BlackRock Global Floating Rate Income Trust (BGT)

  Principal        
Rating1  Amount        
(unaudited)  (000)                                                             Description  Value   







 
      LONG-TERM INVESTMENTS—156.5%       
      Corporate Bonds—18.1%       
      Automotive—0.2%       
BB+  $  750   Arvinmeritor, Inc., 8.75%, 3/01/12  $ 862,538   


 
      Basic Materials—1.3%       
B-    700 2 BCP Caylux Holdings SCA, 9.625%, 6/15/14 (Luxembourg)    786,625   
B+    665 2 Boise Cascade LLC, 5.005%, 10/15/12    689,938   
B1    750 2 Foundation Pennsylvania Coal Co., 7.25%, 8/01/14    802,500   
BB+    225   Georgia Pacific Corp., 8.00%, 1/15/24    263,250   
Ba3    750   Hercules, Inc., 6.75%, 10/15/29    774,375   
B-    750   Huntsman Intl., LLC, 9.875%, 3/01/09    824,062   
BB    225   Intl. Steel Group, Inc., 6.50%, 4/15/14    241,875   
      Lyondell Chemical Co.,       
B+    300      11.125%, 7/15/12    355,500   
B+    300      Ser. A, 9.625%, 5/01/07    330,000   
B-    750   Nalco Co., 8.875%, 11/15/13    823,125   


 
          5,891,250   

 
      Building & Development—0.2%       
B+    1,000 2 Ainsworth Lumber Co. Ltd., 6.29875%, 10/01/10 (Canada)    1,026,980   


 
      Conglomerates—0.2%       
B    750   Trimas Corp., 9.875%, 6/15/12    795,000   


 
      Consumer Products—0.4%       
B2    1,000 2 Duane Reade, Inc., 7.01%, 12/15/10    1,018,750   
B-    400   Lazy Days RV Center, Inc., 11.75%, 5/15/12    435,000   
B+    350   Stoneridge, Inc., 11.50%, 5/01/12    408,188   

 
          1,861,938   

 
      Containers & Packaging—0.2%       
B    750   Crown European Holdings SA, 10.875%, 3/01/13 (France)    886,875   


 
      Ecological Services & Equipment—0.1%       
BB-    625   Allied Waste NA, Inc., Ser. B, 5.75%, 2/15/11    587,500   


 
      Energy—8.5%       
BB    750 2 AES Corp., 9.00%, 5/15/15    857,812   
B    750   Compton Petroleum Corp., Ser. A, 9.90%, 5/15/09 (Canada)    828,750   
B1    750   Edison Mission Energy, 10.00%, 8/15/08    862,500   
B-    750   El Paso Production Holding Co., 7.75%, 6/01/13    787,500   
NR    14,430   Gazprom, 9.625%, 3/01/13 (Russia)    17,109,651   
B    750   Hanover Compressor Co., 9.00%, 6/01/14    840,000   
B-    730   KCS Energy, Inc., 7.125%, 4/01/12    768,325   
B1    750 2 NRG Energy, Inc., 8.00%, 12/15/13    817,500   
Baa1    12,700   Pemex Project Funding Master Trust, Ser. 15, 3.87%, 10/15/09    13,303,250   
Baa1    800   Petroleos Mexicanos, 9.375%, 12/02/08 (Mexico)    939,200   
      Reliant Energy, Inc.,       
BB-    250      6.75%, 12/15/14    250,000   
BB-    750      9.25%, 7/15/10    840,000   
BB-    300   Swift Energy Co., 7.625%, 7/15/11    324,750   


 
          38,529,238   


 
      Entertainment & Leisure—0.2%       
BB+    750   MGM Mirage, 5.875%, 2/27/14    738,750   


 
      Financial Institutions—2.4%       
BB    750   Crum & Forster Holdings Corp., 10.375%, 6/15/13    836,250   
NR    5,455   Kazkommerts Intl. BV, 8.50%, 4/16/13 (Netherlands)    5,729,113   
Baa2    3,000 2 Kazkommertsbank Intl. BV, 8.50%, 4/16/13 (Netherlands)    3,135,000   
BBB    25   Marsh & McLennan Cos, Inc., 2.193%, 7/13/07    24,505   
B3    750 2 Rainbow National Services LLC, 8.75%, 9/01/12    821,250   
B-    300 2 Universal City Florida Holding Co., 7.20%, 5/01/10    312,750   


 
          10,858,868   


 

See Notes to Financial Statements.

7


BlackRock Global Floating Rate Income Trust (BGT) (continued)

  Principal      
Rating1  Amount      
(unaudited)  (000)                                                             Description  Value   







 
    Health Care—0.5%     
B-  $ 750   IASIS Healthcare LLC, 8.75%, 6/15/14  $ 817,500   
B-  650   Universal Hospital Services, Inc., 10.125%, 11/01/11  676,000   
B2  750 2 US Oncology, Inc., 9.00%, 8/15/12  838,125   


 
      2,331,625   


 
    Industrials—0.3%     
B-  400   Cenveo Corp., 7.875%, 12/01/13  372,000   
CCC+  350 2 Park Ohio Industries, Inc., 8.375%, 11/15/14  349,125   
B+  750   United Rentals NA, Inc., 7.00%, 2/15/14  705,000   


 
      1,426,125   


 
    Media—0.8%     
CCC+  750   Charter Communications Holdings II, LLC, 10.25%, 9/15/10  795,000   
BB-  350  2 Choctaw Resort Development Enterprise, 7.25%, 11/15/19  353,500   
BB-  750   Echostar DBS Corp., 6.375%, 10/01/11  768,750   
B  750   Primedia, Inc., 7.625%, 4/01/08  759,375   
B-  750 2 WMG Holdings Corp., 6.905%, 12/15/11  755,625   


 
      3,432,250   


 
    Real Estate—1.3%     
BB+  6,350   Rouse Co., 5.375%, 11/26/13  6,090,920   


 
    Technology—0.2%     
Ba3  750   Celestica, Inc., 7.875%, 7/01/11 (Canada)  804,375   


 
    Telecommunications—1.0%     
    Cincinnati Bell, Inc.,     
B+  400      7.25%, 7/15/13  410,000   
B-  400      8.375%, 1/15/14  406,000   
    Dobson Cellular Systems, Inc.,     
B2  325 2    6.96%, 11/01/11  336,375   
B2  350 2    8.375%, 11/01/11  361,375   
BB+  750   Nextel Communications, Inc., 5.95%, 3/15/14  778,125   
    Qwest Corp.,     
BB  750  2    7.875%, 9/01/11  813,750   
B+  750 2    14.00%, 12/15/10  901,875   
BB  400 2 Rogers Wireless Communications, Inc., 5.525%, 12/15/10  419,000   


 
      4,426,500   


 
    Transportation—0.3%     
B3  400 2 Horizon Lines LLC, 9.00%, 11/01/12  432,000   
B+  750   OMI Corp., 7.625%, 12/01/13 (Marshall Islands)  802,500   


 
      1,234,500   


 
    Total Corporate Bonds  81,785,232   


 
    Bank Loans—105.4%     
    Aerospace & Defense—1.7%     
  2,985   CACI Intl., Inc., Term Loan, LIBOR + 1.50%, 2/04/07  3,016,678   
  2,000   MRO Acquisition LLC, Term Loan, LIBOR + 5.25%, 9/15/11  2,018,750   
  2,631   Standard Aero, Inc., Term Loan, LIBOR + 2.50%, 8/18/12  2,665,298   


 
      7,700,726   


 
    Automotive—3.0%     
  1,897   Plastech, Inc., Term Loan B, LIBOR + 2.75%, 2/12/10  1,924,297   
  1,750   Polar Corp., Term Loan, LIBOR, 5/30/10  1,785,000   
  3,000   Progressive Moulded Products, Ltd., Term Loan B, LIBOR + 2.50%, 8/30/11  3,003,750   
  3,000   TI Group Automotive Systems NA, Term Loan C, LIBOR + 3.25%, 6/30/11  2,960,625   
    TRW Automotive, Inc.,     
  1,500      Term Loan, LIBOR + 1.50%, 6/30/12  1,501,875   
  2,500      Term Loan E, LIBOR + 1.50%, 10/31/10  2,510,157   


 
      13,685,704   


 

See Notes to Financial Statements.

8


BlackRock Global Floating Rate Income Trust (BGT) (continued)

  Principal      
Rating1  Amount      
(unaudited)  (000)  Description  Value   







 
    Basic Materials—13.7%     
  $ 2,985   Appleton Papers, Inc., Term Loan, LIBOR + 2.25%, 6/30/10  $ 3,016,343   
    Boise Cascade LLC,     
  4,000      Term Loan B, LIBOR + 2.25%, 10/31/11  4,043,332   
  4,178      Term Loan C, LIBOR + 2.25%, 10/31/10  4,183,305   
    Buckeye Technologies, Inc., Term Loan,     
  904      LIBOR + 2.50%, 4/15/10  915,466   
  69      PRIME + 1.50%, 4/15/10  70,342   
    Celanese AG, Term Loan     
  1,995      LIBOR + 2.25%, 6/03/11  2,013,288   
  620      LIBOR + 2.50%, 6/03/11  626,056   
  2,000   Cognis Deutschland, Term Loan, LIBOR + 4.75%, 11/15/13  2,070,000   
  1,638   Foundation Coal Corp., Term Loan B, LIBOR + 2.50%, 7/30/11  1,660,824   
  997   Hercules, Inc., Term Loan B, LIBOR + 1.75%, 4/07/10  1,001,976   
  3,000   Huntsman Intl., LLC, Term Loan B, LIBOR + 2.50%, 12/31/10  3,030,000   
  5,500   Huntsman LLC, Term Loan, LIBOR + 3.50%, 3/30/10  5,591,669   
    Innophos, Inc., Term Loan,     
  3,228      LIBOR + 2.75%, 8/15/10  3,264,591   
  764      0.50%, 8/15/10  772,227   
  4,882   Invista, Term Loan, LIBOR + 2.75%, 4/30/11  4,964,743   
  1,231   Koch Cellulose, LLC, Term Loan, LIBOR + 2.25%, 5/01/11  1,239,981   
    Kraton Polymers, LLC, Term Loan,     
  222      LIBOR + 2.75%, 12/15/10  224,699   
  1      PRIME + 1.50%, 12/15/10  567   
  5,831   Nalco Co., Term Loan B, LIBOR + 2.00%, 11/04/10  5,909,071   
  988   Professional Paint, Inc., Term Loan, LIBOR + 3.25%, 9/30/11  999,844   
  1,990   Ripplewood Phosphorus US, LLC, Term Loan, LIBOR + 3.00%, 7/16/11  2,014,875   
  6,500   Rockwood Specialties Group, Inc., Term Loan D, LIBOR + 2.25%, 8/15/12  6,537,576   
  2,458   Rollcoater, Term Loan, LIBOR + 3.25%, 11/30/10  2,452,188   
    United Industries Corp., Term Loan,     
  2,985      LIBOR + 2.50%, 4/30/11  3,029,775   
  1,990      LIBOR + 4.50%, 4/30/11  2,019,850   


 
      61,652,588   


 
    Building & Development—2.5%     
  2,000   Juno Lighting, Inc., Term Loan, LIBOR + 5.50%, 5/10/11  2,027,500   
  2,000   Landsource Communities Development, LLC, Term Loan B, LIBOR + 2.50%, 3/31/10  2,027,500   
    Nortek, Inc., Term Loan,     
  929      LIBOR + 2.50%, 8/24/11  943,080   
  69      PRIME + 1.50%, 8/24/11  70,006   
    Ply Gem Industries, Inc.,     
  1,500      Term Loan B, LIBOR + 2.50%, 10/01/11  1,515,000   
  306      CND Term Loan, LIBOR + 2.50%, 10/01/11  309,075   
  1,691      USD Term Loan, LIBOR + 2.50%, 10/01/11  1,708,394   
  2,500   Resolution Specialty Materials, Term Loan, LIBOR + 2.75%, 8/15/10  2,534,375   


 
      11,134,930   


 
    Business Equipment & Services—0.2%     
  1,000   Latham Intl. Ltd., Term Loan, LIBOR + 4.00%, 12/31/10  995,000   


 
    Conglomerates—3.0%     
  3,483   Honeywell Security Group, Term Loan B, LIBOR + 4.00%, 6/28/10  3,512,972   
    Invensys Intl. Holdings Ltd., Term Loan,     
  2,000      LIBOR + 4.75%, 11/30/09  2,052,500   
  4,000      LIBOR + 3.00%, 3/05/09  3,980,000   
  984      Term Loan B1, LIBOR + 3.50%, 8/30/09  997,999   
  2,736   Polypore, Inc., Term Loan, LIBOR + 2.25%, 11/15/11  2,770,453   


 
      13,313,924   


 
    Consumer Products—14.1%     
    Ames True Temper, Inc., Term Loan B,     
  1,986      LIBOR + 3.00%, 6/23/11  2,008,675   
  4      PRIME + 1.75%, 6/23/11  4,335   

See Notes to Financial Statements.

9


BlackRock Global Floating Rate Income Trust (BGT) (continued)

  Principal      
Rating1  Amount      
(unaudited)  (000)                                                             Description  Value   







 
      Consumer Products—(cont’d)     
      Berkline/BenchCraft Holdings, LLC,     
  $  2,000      Term Loan, PRIME + 6.75%, 4/30/12  $ 2,020,000   
    2,000      Term Loan B, PRIME + 6.75%, 10/31/11  2,005,000   
    1,000   Carrols Corp., Term Loan, LIBOR + 2.50%, 12/31/10  1,015,000   
    1,820   Church & Dwight Co., Inc., Term Loan B, LIBOR + 1.75%, 5/31/11  1,839,620   
    1,566   CKE Restaurants, Inc., Term Loan, LIBOR + 2.75%, 5/17/09  1,589,914   
    1,977   Coinmach Service Corp., Term Loan B, LIBOR + 3.00%, 7/30/09  1,996,629   
    2,000   Constellation Brands, Inc., Term Loan, LIBOR + 1.75%, 12/31/11  2,026,500   
    750   Culligan Water Co., Term Loan B, LIBOR + 2.75%, 10/15/11  761,250   
    3,500   Denny’s Corp., Term Loan, LIBOR, 8/25/10  3,591,875   
    3,000   Desa LLC, Term Loan, PRIME + 2.00%, 12/30/11  3,022,500   
    998   Doane Pet Care Co., Term Loan, LIBOR + 4.00%, 11/15/09  1,012,463   
    500   Herbalife, Term Loan, LIBOR + 2.25%, 12/31/10  506,250   
    1,500   Jarden Corp., Term Loan, LIBOR + 2.00%, 1/15/12  1,513,125   
    1,845   Knoll, Inc., Term Loan, LIBOR + 3.00%, 10/15/11  1,862,000   
    1,000   Landrys Restaurants, Term Loan, LIBOR + 1.75%, 12/31/10  1,010,000   
    2,921   Language Line, Inc., Term Loan B, LIBOR + 4.25%, 6/14/11  2,953,914   
      Maidenform, Inc., Term Loan,     
    297      LIBOR + 2.25%, 5/14/10  299,591   
    587      LIBOR + 7.50%, 5/11/11  598,358   
    2,944   National Bedding Co., LLC, Term Loan B, LIBOR + 2.25%, 8/25/08  2,973,599   
    3,500   Olympus Cable Holdings, LLC, Term Loan B, PRIME + 2.00%, 9/30/10  3,474,296   
      Oriental Trading Co., Inc., Term Loan,     
    1,441      LIBOR + 2.75%, 8/06/10  1,444,187   
    1,000      LIBOR + 6.00%, 12/02/10  1,015,417   
    5,496   OSI Group LLC, Term Loan, LIBOR + 2.50%, 9/15/11  5,564,883   
    2,838   Pierre Foods, Inc., Term Loan B, LIBOR + 2.75%, 7/15/10  2,861,145   
      Prestige Brands Holdings, Inc., Term Loan B,     
    1,985      LIBOR, 4/07/11  2,004,850   
    5      PRIME + 1.75%, 4/07/11  5,050   
    1,000   Propex Fabrics, Inc., Term Loan, LIBOR + 2.25%, 12/31/10  1,005,000   
      R.H. Donnelley, Inc.,     
    722      Term Loan, LIBOR + 1.75%, 6/30/11  728,718   
    2,190      Term Loan D, LIBOR + 1.75%, 12/31/11  2,210,790   
    2,993   Rite Aid Corp., Term Loan, LIBOR + 1.75%, 9/15/09  3,007,463   
    1,000   Travel Centers of America, Inc., Term Loan C, LIBOR + 1.75%, 11/30/11  1,007,500   
      United Subcontractors, Inc., Term Loan,     
    4,000      LIBOR + 3.25%, 4/21/11  4,010,000   
    500      LIBOR + 7.00%, 10/21/11  503,750   


 
        63,453,647   


 
      Containers & Packaging—4.7%     
    2,715   Berry Plastics Corp., Term Loan C, LIBOR + 2.00%, 3/11/11  2,747,637   
      FlexSol Packaging Corp., Term Loan,     
    1,000      LIBOR + 3.25%, 11/30/11  1,002,500   
    1,000      LIBOR + 7.00%, 11/30/12  1,015,000   
      Graham Packaging Co., Inc.,     
    6,500      Term Loan B, LIBOR, 10/01/11  6,583,571   
    2,000      Term Loan C, LIBOR, 4/01/12  2,049,000   
    3,576   Graphic Packaging Intl., Inc., Term Loan C, LIBOR + 2.50%, 8/08/10  3,636,358   
    1,000   Smurfit Stone Containter Corp., Term Loan B, LIBOR + 2.00%, 11/01/11  1,014,250   
    2,985   Solo Cup Co., Term Loan, LIBOR + 2.50%, 2/27/11  3,037,199   


 
        21,085,515   


 
      Ecological Services & Equipment—1.3%     
    1,963   Allied Waste NA, Inc., Term Loan B, LIBOR + 2.75%, 1/15/10  1,987,281   
    3,773   Envirosolutions, Inc., Term Loan, LIBOR + 4.50%, 2/28/09  3,759,033   


 
        5,746,314   


 

See Notes to Financial Statements.

10


BlackRock Global Floating Rate Income Trust (BGT) (continued)

  Principal      
Rating1  Amount      
(unaudited)  (000)  Description  Value   







 
      Energy—4.5%     
  $  1,500   AES Corp., Term Loan, LIBOR + 2.25%, 4/30/08  $ 1,521,875   
      Belden & Blake Corp., Term Loan,     
    1,780      LIBOR + 2.75%, 7/15/11  1,786,675   
    15      PRIME + 1.75%, 7/15/11  15,056   
    500   Coleto Creek WLE LP, Term Loan C, LIBOR + 3.50%, 8/05/12  508,334   
    1,990   Dynegy Holdings, Inc., Term Loan, LIBOR + 4.00%, 5/10/10  2,018,606   
      El Paso Corp., Term Loan B,     
    1,250      LIBOR + 2.75%, 11/30/09  1,259,722   
    750      LIBOR + 2.85%, 11/30/09  755,834   
    500   Mainline LP, Term Loan, LIBOR + 2.375%, 12/31/11  505,000   
      Reliant Energy, Inc.,     
    2,000      Term Loan, LIBOR + 4.00%, 3/15/07  2,033,000   
    6,000      Term Loan B, LIBOR + 2.375%, 4/30/10  6,070,002   
      Semgroup, LP, Term Loan B,     
    1,980      LIBOR + 3.25%, 9/01/10  2,007,225   
    20      PRIME + 1.75%, 9/01/10  20,275   
      Texas Genco LLC,     
    585      Term Loan, 5.00%, 12/15/11  592,132   
    1,415      Term Loan B, LIBOR + 2.00%, 12/15/11  1,433,835   


 
        20,527,571   


 
      Entertainment & Leisure—8.5%     
    1,000   Blockbuster Entertainment Corp., Term Loan B, LIBOR + 2.50%, 8/20/11  995,000   
    1,990   Boyd Gaming Corp., Term Loan B, LIBOR + 1.75%, 5/14/11  2,015,372   
    1,940   Greektown Casino, LLC, Term Loan D, LIBOR + 3.50%, 12/31/05  1,954,467   
    3,000   Kerasotes Theatres, Inc., Term Loan B, LIBOR + 2.75%, 11/01/11  3,045,000   
    4,987   Loews Cineplex Entertainment Corp., Term Loan B, LIBOR + 2.25%, 8/15/11  5,049,843   
    2,000   Marina District Finance Co., Inc., Term Loan B, LIBOR + 4.50%, 10/15/11  2,015,000   
    2,000   MGM Mirage, Term Loan B, LIBOR + 2.50%, 4/30/11  2,004,000   
    1,573   Penn National Gaming, Inc., Term Loan D, LIBOR + 2.50%, 9/01/07  1,577,062   
    1,000   Universal City Development Partners, Ltd., Term Loan B, LIBOR + 2.00%, 6/30/12  1,015,000   
    1,724   Venetian Casino Resorts LLC, Term Loan B, LIBOR + 1.50%, 8/15/11  1,751,694   
    4,241   Wallace Theaters, Term Loan, LIBOR + 3.25%, 8/01/09 - 1/21/10  4,301,745   
      Wyndham Intl., Inc.,     
    6,099      Term Loan I, LIBOR + 4.75%, 6/30/06  6,128,610   
    2,373      Term Loan II, LIBOR + 5.75%, 4/01/06  2,389,921   
    4,000   Wynn Resorts, Term Loan, LIBOR + 2.45%, 12/31/11  4,046,669   


 
        38,289,383   


 
      Financial Institutions—2.4%     
    1,872   Global Cash Access, LLC, Term Loan, LIBOR + 2.75%, 3/15/10  1,897,917   
    4,000   Jostens, Inc., Term Loan C, LIBOR + 2.00%, 10/15/11  4,025,716   
    1,995   Refco Finance Holdings LLC, Term Loan B, LIBOR, 7/30/11  2,015,948   
      Titan Corp., Term Loan B,     
    2,982      LIBOR + 3.25%, 4/24/09  3,016,994   
    10      PRIME + 1.50%, 4/24/09  9,953   


 
        10,966,528   


 
      Foreign Government—1.4%     
    6,400   Kingdom of Morocco, LIBOR + 0.8125%, 1/02/09  6,280,000   


 
      Health Care—10.6%     
    5,975   Accredo Health, Inc., Term Loan B, LIBOR + 1.75%, 8/05/11  6,012,331   
    1,617   Advanced Medical Optics, Term Loan B, LIBOR + 2.25%, 6/30/07  1,630,750   
    4,000   Arizant, Inc., Term Loan, LIBOR + 3.75%, 8/15/10  4,015,000   
    7,431   Community Health Systems, Inc., Term Loan, LIBOR + 1.75%, 8/15/11  7,485,951   
    4,846   Concentra Operating Corp., Term Loan, LIBOR + 2.50%, 6/30/10  4,884,013   
    750   Cooper Companies, Term Loan, LIBOR + 1.75%, 11/15/11  759,375   
    2,977   Davita, Inc., Term Loan B, LIBOR + 2.00%, 6/30/10  2,980,099   
    2,000   HealthSouth Corp., Term Loan, LIBOR, 1/15/11  2,187,500   
    2,985   IASIS Healthcare Corp., Term Loan B, LIBOR + 2.50%, 6/30/11  3,025,423   
    2,743   Jean Coutu Group, Inc., Term Loan B, LIBOR + 2.25%, 6/30/11  2,782,714   
    2,539   Kinetic Concepts, Inc., Term Loan B2, LIBOR + 1.75%, 8/05/10  2,554,287   

See Notes to Financial Statements.

11


BlackRock Global Floating Rate Income Trust (BGT) (continued)

  Principal      
Rating1  Amount      
(unaudited)  (000)  Description  Value   







 
    Health Care—(cont’d)     
  $ 875   Medco Health Solutions, Term Loan, LIBOR + 1.25%, 3/13/08  $ 879,740   
  1,000   Pacificare Health Systems, Inc., Term Loan B, LIBOR + 1.50%, 12/15/10  1,000,000   
  4,993   US Oncology, Inc., Term Loan, LIBOR + 2.75%, 6/30/11  5,036,184   
  3,098   Vanguard Health Systems, Term Loan, LIBOR + 3.25%, 9/30/11  3,144,737   


 
      48,378,104   


 
    Industrials—0.8%     
  664   Alderwoods Group, Inc., Term Loan B2, LIBOR + 2.00%, 9/29/09  670,231   
  1,000   Exide Technologies, Term Loan, LIBOR + 3.50%, 5/01/10  980,000   
  2,000   Tinnerman Palnut Engineered Products, Inc., Term Loan, LIBOR + 7.25%, 11/01/11  2,050,000   


 
      3,700,231   


 
    Media—19.1%     
    Advertising Directory Solutions,     
  1,000      Term Loan, LIBOR + 3.75%, 5/30/12  1,019,000   
  3,000      Term Loan B, LIBOR + 2.00%, 11/30/11  3,022,500   
  2,000   Alliance Atlantis, Term Loan B, PRIME + 7.50%, 11/30/11  2,025,000   
  1,995   Bragg Communications, Inc., Term Loan B, LIBOR + 2.50%, 9/15/11  2,019,938   
  1,000   Bresnan Communications LLC, Term Loan B, LIBOR + 3.50%, 9/30/10  1,013,125   
    Century TCI California LP,     
  2,000      Term Loan, PRIME + 0.75%, 12/31/07  1,994,000   
  10,000      Term Loan B, LIBOR + 2.50%, 12/31/09  9,928,570   
    Charter Communications Operating, LLC,     
  5,995      Term Loan A, LIBOR, 4/27/10  5,998,124   
  1,995      Term Loan B, LIBOR + 3.25%, 4/30/11  1,996,039   
    Dex Media East, LLC, Term Loan B,     
  3,918      LIBOR + 1.75%, 12/31/08  3,957,290   
  52      PRIME + 0.75%, 12/31/08  52,103   
    Dex Media West, LLC,     
  1,160      Term Loan A, LIBOR + 2.00%, 9/10/09  1,169,467   
  18      Term Loan A, PRIME + 1.00%, 9/10/09  18,744   
  1,842      Term Loan B, LIBOR + 1.75%, 9/01/09  1,859,006   
  28      Term Loan B, PRIME + 0.75%, 9/01/09  28,035   
  2,000   Emmis Operating Co., Term Loan B, LIBOR, 5/15/12  2,018,334   
  4,750   Freedom Communications, Inc., Term Loan, LIBOR + 1.75%, 4/04/12  4,818,875   
    Insight Midwest Holdings, LLC,     
  4,681      Term Loan A, LIBOR + 1.50%, 6/30/09  4,674,026   
  997      Term Loan B, LIBOR + 2.75%, 1/06/10  1,012,166   
  3,483   Media News, Term Loan C, LIBOR + 3.125%, 8/25/10  3,499,912   
  2,300   Mediacom Broadband LLC, Term Loan A, LIBOR + 1.50%, 3/31/10  2,284,907   
  2,000   Mediacom Illinois LLC, Term Loan B, LIBOR + 2.25%, 3/31/13  2,005,000   
  698   NEP Supershooters LP, Term Loan, LIBOR + 4.00%, 2/01/11  709,597   
  2,000   New Skies Satellites, Term Loan B, LIBOR + 2.75%, 4/12/11  2,025,834   
  2,985   Nexstar Broadcasting, Inc., Term Loan D, LIBOR + 1.75%, 12/31/10  2,992,463   
  5,000   NTL Investment Holding Ltd., Term Loan B, LIBOR + 3.00%, 4/13/12  5,025,000   
  2,500   Raycom Media, Inc., Term Loan B, LIBOR + 1.75%, 4/01/12  2,528,125   
    Transwestern Publishing Co., Term Loan,     
  1,500      LIBOR + 2.25%, 2/25/11  1,516,407   
  2,987      LIBOR + 4.50%, 2/25/12  3,028,544   
  2,985   Warner Music Group, Corp., Term Loan B, LIBOR + 2.75%, 4/08/11  3,022,274   
    Western Wireless Corp.,     
  5,766      Term Loan A, LIBOR + 2.25%, 5/28/10  5,792,607   
  2,993      Term Loan B, LIBOR + 3.00%, 5/30/11  3,036,319   


 
      86,091,331   


 
    Real Estate—2.7%     
    General Growth Properties,     
  3,000      Term Loan A, LIBOR + 2.25%, 11/12/07  2,998,635   
  3,500      Term Loan B, LIBOR + 2.25%, 11/12/08  3,508,750   
    Headwaters, Inc., Term Loan,     
  3,688      LIBOR + 3.25%, 4/30/11  3,732,056   
  1,000      LIBOR + 5.50%, 4/30/11  1,030,833   

See Notes to Financial Statements.

12


BlackRock Global Floating Rate Income Trust (BGT) (continued)

  Principal      
Rating1  Amount      
(unaudited)  (000)                                                             Description  Value   







 
    Real Estate—(cont’d)     
    Lake Las Vegas Resort, Term Loan,     
  $ 828      LIBOR + 2.50%, 10/13/09  $ 831,983   
  172      PRIME, 10/13/09  173,330   


 
      12,275,587   


 
    Technology—3.3%     
    Directed Electronics, Inc., Term Loan,     
  2,762      LIBOR + 4.25%, 3/15/10  2,782,444   
  154      PRIME + 3.25%, 3/15/10  155,000   
  2,767   Knowles Electronics, Inc., Term Loan B2, LIBOR + 5.00%, 6/29/07  2,780,721   
  1,990   Network Communications, Inc., Term Loan B, LIBOR + 4.00%, 6/15/11  2,009,900   
  2,985   UGS PLM, Term Loan B, LIBOR + 2.25%, 5/30/11  3,029,775   
  2,985   Verifone, Inc., Term Loan B, LIBOR + 2.50%, 6/30/11  3,029,776   
  1,000   Westcom Corp., Term Loan B, PRIME + 1.75%, 12/31/10  1,015,000   


 
      14,802,616   


 
    Telecommunications—7.1%     
  2,000   Atlantic Broadband Finance, LLC, Term Loan B, LIBOR + 3.25%, 1/30/11  2,037,500   
  5,231   Centennial Cellular Operating Co., Term Loan B, LIBOR + 2.75%, 2/09/11  5,295,125   
  2,000   Iowa Telecom, Term Loan B, LIBOR + 2.00%, 11/30/11  2,017,500   
  1,995   Nextel Finance Co., Term Loan E, LIBOR + 2.25%, 12/15/10  1,996,086   
  2,000   Nextel Partners Operating Corp., Term Loan C, LIBOR + 2.50%, 5/18/11  2,026,786   
    PanAmSat Corp.,     
  2,364      Term Loan, LIBOR + 2.50%, 8/20/09  2,372,464   
  1,985      Term Loan B, LIBOR + 2.50%, 7/16/11  1,994,658   
  5,000   Qwest Corp., Term Loan A, LIBOR + 4.75%, 6/30/07  5,209,375   
  4,500   Triton PCS, Inc., Term Loan, LIBOR + 3.75%, 11/15/09  4,550,625   
  4,000   Valor Telecommunications LLC, Term Loan, LIBOR + 7.75%, 11/15/11  4,033,332   


 
      31,533,451   


 
    Transportation—0.8%     
  2,500   Sirva Worldwide, Inc., Term Loan, LIBOR + 2.00%, 12/31/09  2,512,500   
  1,184   Transport Industries, LP, Term Loan, LIBOR + 4.00%, 6/14/10  1,184,055   


 
      3,696,555   


 
    Total Bank Loans  475,309,705   


 
    Foreign Government Bonds—33.0%     
NR  8,714   Bolivarian Republic of Venezuela, 3.625%, 12/18/07  8,670,310   
    Federative Republic of Brazil,     
NR  14,400      3.125%, 4/15/05  13,932,885   
NR  10,696      8.00%, 4/15/14  10,942,726   
NR  14,435      8.299%, 6/29/09  16,997,213   
BB-  2,400      Ser. B, 10.00%, 8/07/11  2,781,600   
NR  1,600   Islamic Republic of Pakistan, 6.75%, 2/19/09  1,640,544   
A-  800   Malaysia, 8.75%, 6/01/09  947,992   
NR  3,500   Republic of Argentina, 1.98%, 8/03/12  2,975,000   
NR  8,610   Republic of Bulgaria, 2.75%, 1/28/05  8,602,636   
A  2,400   Republic of Chile, 6.875%, 4/28/09  2,649,288   
BB+  7,665   Republic of Colombia, 9.75%, 4/09/11  8,776,076   
NR  3,200   Republic of Costa Rica, 9.335%, 5/15/09  3,516,000   
NR  2,400   Republic of Ecuador, 12.00%, 11/15/12  2,448,000   
NR  800   Republic of El Salvador, 9.50%, 8/15/06  868,000   
    Republic of Panama,     
NR  12,714      2.75%, 1/18/05  11,983,202   
BB+  840      8.25%, 4/22/08  930,300   
    Republic of Peru,     
NR  5,600      4.50%, 3/07/05  5,236,000   
BB  2,400      9.125%, 1/15/08  2,736,000   
BBB  2,400   Republic of South Africa, 7.375%, 4/25/12  2,732,400   
NR  2,400   Republic of the Philippines, 8.875%, 4/15/08  2,591,694   
BB-  2,400   Republic of Turkey, 12.00%, 12/15/08  2,931,600   

See Notes to Financial Statements.

13


BlackRock Global Floating Rate Income Trust (BGT) (continued)

  Principal    
Rating1  Amount    
(unaudited)  (000)                                                             Description  Value  








    Foreign Government Bonds—(cont’d)   
    Republic of Venezuela,   
NR  $ 5,535      3.063%, 3/31/05  $ 5,507,697  
B+  4,000      3.09%, 4/20/11  3,630,000  
B  4,800      9.125%, 6/18/07  5,208,000  
NR  2,000      11.00%, 3/05/08 EUR  3,180,411  
    Ukraine,   
B+  8,1002      5.33%, 8/05/09  8,483,616  
B+  2,8002      6.875%, 3/04/11  2,856,000  
Baa2  4,800   United Mexican States, 2.753%, 1/13/09  4,869,600  



    Total Foreign Government Bonds  148,624,790  



    Total Long-Term Investments (cost $697,309,968)  705,719,727  



    SHORT-TERM INVESTMENT—7.3%   
    U.S. Government and Agency Zero Coupon Bond   
  33,200   Federal Home Loan Bank, zero coupon 1/03/05 (cost $33,197,694)  33,197,694  



    Total investments—163.8% (cost $730,507,662)  $ 738,917,421  
    Liabilities in excess of other assets —(9.8)%  (44,304,399 ) 
    Preferred shares at redemption value, including dividends payable—(54.0)%  (243,485,706 ) 
    Net Assets applicable to common shareholders—100%  $ 451,127,316  





1      Using the higher of S&P’s, Moody’s or Fitch’s rating.
2      Security is not registered under the Securities Act of 1933. These securities may be resold in transactions in accordance with Rule 144A under that Act, to qualified institutional buyers. As of December 31, 2004, the Trust held 6.0% of its net assets, with a current market value of $27,169,471, in securities restricted as to resale.
 

A category in the Corporate Bonds and Bank Loans sections may contain multiple industries as defined by the SEC’s Standard Industry Codes.



KEY TO ABBREVIATIONS

EUR – European Monetary Unit


 

See Notes to Financial Statements.

14


PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004

BlackRock Preferred Opportunity Trust (BPP)

Rating1             
(unaudited)   Shares Description  Value   







 
        LONG-TERM INVESTMENTS—141.9%     
        Preferred Securities—54.2%     
        Consumer Products—0.5%     
BBB-    20,000   2 Dairy Farmers of America, Inc., 7.875%  $ 2,082,500   


 
        Energy—3.9%     
A-    45,200    Apache Corp., Ser. B, 5.68%  4,757,300   
BBB+    900    Central Maine Power Co., 3.50%  55,183   
BB+    5,000    Devon Energy Corp., Ser. A, 6.49%  510,000   
B-    115,000    Hanover Compressor Cap. Trust, 7.25%, expires 12/14/29, price $17.875, 2.7972 shares  5,904,905   
Baa3    275,000    Nexen, Inc., 7.35% (Canada)  7,397,500   


 
          18,624,888   


 
        Financial Institutions—34.0%     
A3    600   2 ABN Amro NA, Inc., 6.46%  600,000   
Aa3    400,000    BAC Capital Trust IV, 6.00%  10,028,000   
A2    30,000   2 Banesto Hldgs. Ltd., Ser. A, 10.50% (Bailiwick of Guernsey)  990,000   
A-    100,000    Bear Stearns Co., Inc., Ser. E, 6.15%  5,253,000   
B+    60,000    Chevy Chase Preferred Cap. Corp., Ser. A, 10.375%  3,465,600   
A3    23,600    Citigroup Cap. I, 6.75% (CORTS)  609,352   
AA    40,000    Citigroup Cap. X, 6.10%  1,006,800   
AA    50,000    Citigroup Cap. XI, 6.00%  1,246,500   
BB    80,000    Colonial Cap. Trust IV, 7.875%  2,136,000   
        Credit Suisse First Boston, Inc. (SATURNS)     
Aa3    11,100       6.25%  281,718   
Aa3    12,300       7.00%  320,954   
BBB+    137,500    Everest Re Cap. Trust, 7.85% (Barbados)  3,798,437   
BBB+    30,000    Everest Re Cap. Trust II, Ser. B, 6.20%  702,300   
        Federal Home Loan Mortgage Corp.     
AA-    121,150       Ser. F, 5.00%  5,209,450   
AA-    102,958       Ser. H, 5.10%  4,488,969   
AA    15,200    Financial Security Assurance Holdings Ltd., 5.60%  365,408   
BBB-    277,200    First Republic Bank, 6.70%  7,354,476   
BBB-    120,000    First Republic Preferred Cap. Corp., 7.25%  3,054,000   
Aa3    85,000    Fleet Cap. Trust VII, 7.20%  2,250,800   
Aa3    26,100    Fleet Cap. Trust VIII, 7.20%  695,304   
        Goldman Sachs Group, Inc., The,     
Aa3    42,000       5.80% (CORTS)  1,047,900   
Aa3    20,000       5.625% (SATURNS)  465,600   
Aa3    102,900       6.00% (SATURNS)  2,553,206   
        ING Groep NV (Netherlands)     
A-    76,700       7.05%  2,056,519   
A2    560,337       7.20%  15,224,356   
A1    80,000    JP Morgan Chase Cap. XII, 6.25%  2,056,000   
A1    150,000    JP Morgan Chase Cap. XIV, 6.20%  3,832,500   
A3    117,200    KeyCorp Cap. V, 5.875%  2,893,375   
A2    263,400    Lehman Brothers Holdings Cap. Trust III, Ser. K, 6.375%  6,729,870   
A2    90,000    Lehman Brothers Holdings Cap. Trust IV, Ser. L, 6.375%  2,317,500   
A2    146,500    Lehman Brothers Holdings Cap. Trust V, Ser. M, 6.00%  3,647,850   
A-    31,100    Lehman Brothers Holdings, Inc., Ser. D, 5.67%  1,586,100   
A1    20,000    Merrill Lynch Preferred Cap. Trust III, 7.00%  537,500   
A1    86,900    Merrill Lynch Preferred Cap. Trust V, 7.28%  2,356,728   
A+    337,000    Morgan Stanley Cap. Trust III, 6.25%  8,569,910   
BBB-    7,200    News Corp. Ltd., The, Ser. 9, Class 1, 8.125% (CORTS)  189,432   
A    209,400    Partnerre Ltd., Ser. C, 6.75% (Bermuda)  5,418,225   
BBB    79,385    Phoenix Cos, Inc., The, 7.45%  2,024,317   
BBB+    18,400    PLC Cap. Trust IV, 7.25%  489,440   

See Notes to Financial Statements.

15


BlackRock Preferred Opportunity Trust (BPP) (continued)

Rating1           
(unaudited) Shares                                                            Description  Value   







 
      Financial Institutions—(cont’d)     
      Renaissancere Holdings Ltd. (Bermuda)     
BBB+    271,725      Ser. B, 7.30%  $ 7,293,099   
BBB+    240,000      Ser. C, 6.08%  5,728,800   
BBB-    30   Roslyn Real Estate Asset Corp., Ser. C, 8.95%  3,030,000   
      Safeco Cap. Trust I,     
Baa2    4,100      8.072% (CORTS)  112,586   
Baa2    2,000      8.375% (CORTS)  56,000   
Baa2    14,700      8.70% (CORTS)  400,722   
Baa2    35,700      8.75% (CORTS)  1,060,260   
Baa2    23,600      8.25% (SATURNS)  632,371   
A-    5,000   SLM Corp., Ser. A, 6.97%  288,438   
BBB-    50,600   Sprint Corp., Ser. 17, Class A1, 7.00% (CORTS)  1,290,806   
BBB-    103,439   Structured Repackaged Asset-Backed Trust Securities, 6.50%  2,570,459   
A    602   Union Planters Preferred Funding Corp., 7.75%  6,420,000   
BBB    11,100   Valero Energy Corp. (PPLUS), 7.25%  290,265   
A2    271,200   Wachovia Preferred Funding Corp., Ser. A, 7.25%  7,729,200   
Baa1    5,200   Washington Mutual Cap. I, 7.65% (CORTS)  135,850   
BBB+    13,500   XL Cap. Ltd., Ser. A, 8.00% (Cayman Islands)  368,298   
Baa1    143,865   Zions Cap. Trust, 8.00%  3,951,799   
Baa2    2,0002   Zurich Regcaps Funding Trust, 6.58%  2,079,000   


 
        161,291,349   


 
      Media—2.5%     
BBB+    253,100   AOL Time Warner, Inc., Ser. A-1, 7.625% (CABCO)  6,745,115   
BBB-    110,000   Comcast Corp., expires 11/15/29, price $85.929, 0.95 shares  5,138,650   


 
        11,883,765   


 
      Real Estate—13.3%     
      AMB Property Corp.,     
BBB    80,000      Ser. L, 6.50%  2,045,000   
BBB    170,000      Ser. M, 6.75%  4,369,000   
      BRE Properties,     
BBB-    225,000      Ser. C, 6.75%  5,625,000   
BBB-    80,000      Ser. D, 6.75%  2,012,504   
BBB-    78,888   CarrAmerica Realty Corp. Ser. E, 7.50%  2,087,377   
      Developers Diversified Realty Corp.     
BBB-    120,000      7.375%  3,108,756   
BBB-    15,900      7.50%  411,810   
      Duke Realty Corp.,     
BBB    90,000      Ser. J, 6.625%  2,358,000   
BBB    160,800      Ser. K, 6.50%  4,055,183   
BBB    100,000   Equity Residential, Ser. N, 6.48%  2,530,000   
BBB+    255,000   Kimco Realty Corp., Ser. F, 6.65%  6,598,125   
BBB+    255,200   NB Cap. Corp., 8.35%  7,074,144   
BBB    324,000   Regency Centers Corp., 7.45%  8,656,891   
Aa3    302   Sun Trust Real Estate Investment Corp., 9.00%  3,861,855   
A-    320,000   Weingarten Realty Investors, Ser. D, 6.75%  8,243,200   


 
        63,036,845   


 
      Total Preferred Securities  256,919,347   
   

 
 
       
  Principal      
  Amount      
  (000)       

      Trust Preferred Securities—51.1%     
      Energy—2.5%     
BB+  $ 3,000   HL&P Cap. Trust II, Ser. B, 8.257%, 2/01/37  3,145,680   
BBB-    4,655   K N Cap. Trust III, 7.63%, 4/15/28  5,206,152   
Ba1    3,000   Puget Sound Energy Cap. Trust I, Ser. B, 8.231%, 6/01/27  3,161,370   


 
        11,513,202   


 

See Notes to Financial Statements.

16


BlackRock Preferred Opportunity Trust (BPP) (continued)

  Principal      
Rating1  Amount      
(unaudited)  (000)                                                             Description  Value   







 
      Financial Institutions—44.8%     
A+  $  6,000   Abbey National Cap. Trust I, 8.963%, 12/29/49  $ 8,277,180   
Ba2    6,500   AFC Cap. Trust I, Ser. B, 8.207%, 2/03/27  6,751,374   
A2    6,0002   AgFirst Farm Credit Bank, 7.30%, 10/14/49  6,220,860   
AA+    2,0002   American General Institute Cap. B, 8.125%, 3/15/46  2,611,500   
BBB    5,000   Astoria Cap. Trust 1, Ser. B, 9.75%, 11/01/29  6,042,700   
A3    9,774   AXA SA, 7.10%, 5/29/49 (France)  10,219,412   
A1    4,600   Bank One Cap. III, 8.75%, 9/01/30  6,177,340   
A+    3,557   BNP Paribas Cap. Trust V, 7.20%, 12/31/49  3,765,440   
A2    8,0002   CBA Cap. Trust I, 5.805%, 12/31/49  8,294,320   
BBB-    1,100   Colonial Cap. Trust II, Ser. A, 8.92%, 1/15/27  1,218,657   
A1    3,000   Credit Agricole Preferred Fund Trust II, 7.00%, 8/29/49 (Luxembourg)  3,120,000   
Aa3    10,0002   Danske Bank A/S, 5.914%, 12/29/49 (Denmark)  10,603,900   
A+    4,5002   Deutsche Bank Cap. Funding, 7.872%, 12/29/49  5,103,270   
A3    6,0002   Dresdner Funding Trust I, 8.151%, 6/30/31  7,376,640   
Baa2    1,100   FCB/NC Cap. Trust I, 8.05%, 3/01/28  1,173,381   
A3    5,000   Greenpoint Cap. Trust I, 9.10%, 6/01/27  5,897,750   
      HBOS Cap. Funding LP,     
AA-    10,0002      6.071%, 6/30/49 (United Kingdom)  10,707,400   
A1    5,000      6.85%, 3/29/49 (United Kingdom)  5,212,500   
AA-    10,8352   HSBC Cap. Funding LP, 9.55%, 6/30/49 (Bailiwick of Jersey)  13,313,940   
BBB-    1,400   HUBCO Cap. Trust I, Ser. B, 8.98%, 2/01/27  1,591,898   
BBB-    3,000   HUBCO Cap. Trust II, Ser. B, 7.65%, 6/15/28  3,142,215   
A1    1,000   JPM Cap. Trust II, 7.95%, 2/01/27  1,091,129   
BBB+    10,0002   Mangrove Bay Pass-Through Trust, 6.102%, 7/15/33  9,922,600   
BB+    3,145   Markel Cap. Trust I, Ser. B, 8.71%, 1/01/46  3,400,626   
Aa3    1   Morgan Stanley, 7.05%, 4/01/32 (PPLUS)  34,491   
A3    3,000   North Fork Cap. Trust II, 8.00%, 12/15/27  3,343,620   
Baa2    5,000   Old Mutual Cap. Funding, 8.00%, 5/29/49 (Jersey)  5,287,000   
BB+    4,200   Provident Financing Trust I, 7.405%, 3/15/38  3,701,250   
AA    11,2002   Rabobank Capital Funding Trust, 5.254%, 12/29/49  11,139,128   
A1    8,000   RBS Cap. Trust, 6.80%, 12/31/49 (United Kingdom)  8,269,383   
AA    10,000   Royal Bank of Scotland Group PLC, 7.648%, 8/31/49 (United Kingdom)  11,908,700   
A+    4,6002   State Street Institutional Capital A, Ser. A, 7.94%, 12/30/26  5,205,176   
A+    7,5002   Sun Life of Canada US Cap. Trust I, 8.526%, 5/29/49 (Canada)  8,435,025   
A+    7,270   Transamerica Cap. III, 7.625%, 11/15/37  8,221,352   
BBB-    5,0002   Webster Cap. Trust I, 9.36%, 1/29/27  5,542,700   


 
        212,323,857   


 
      Real Estate—2.6%     
BB+    8,0002   Sovereign Real Estate Investor Corp., 12.00%, 8/29/49  12,344,000   


 
      Telecommunications—1.2%     
BB+    5,000   TCI Communications Financing III, 9.65%, 3/31/27  5,785,900   


 
      Total Trust Preferred Securities  241,966,959   


 
 
      Corporate Bonds—35.9%     
      Automotive—1.3%     
B    3,000   Dura Operating Corp., Ser. B, 8.625%, 4/15/12  3,127,500   
B-    2,850   Rexnord Corp., 10.125%, 12/15/12  3,224,062   


 
        6,351,562   


 
      Basic Materials—1.1%     
B    1,500   Caraustar Industries, Inc., 9.875%, 4/01/11  1,631,250   
B+    3,000   Lyondell Chemical Co., 11.125%, 7/15/12  3,555,000   


 
        5,186,250   


 
      Conglomerates—0.7%     
B    3,000   Trimas Corp., 9.875%, 6/15/12  3,180,000   


 
      Consumer Products—1.9%     
BB+    3,500   Delhaize America, Inc., 9.00%, 4/15/31  4,551,645   
B-    1,000   Lazy Days RV Center, Inc., 11.75%, 5/15/12  1,087,500   
B+    3,000   Stoneridge, Inc., 11.50%, 5/01/12  3,498,750   


 
        9,137,895   


 

See Notes to Financial Statements.

17


BlackRock Preferred Opportunity Trust (BPP) (continued)

  Principal      
Rating1  Amount      
(unaudited)  (000)                                                             Description  Value   







 
      Containers & Packaging—0.7%     
B+  $  3,000   Crown European Holdings SA, 9.50%, 3/01/11 (France)  $ 3,420,000   


 
      Ecological Services & Equipment—0.4%     
B    1,695   Allied Waste NA, Inc., Ser. B, 10.00%, 8/01/09  1,781,869   


 
      Energy—3.2%     
B    3,000   AES Corp., 8.875%, 2/15/11  3,427,500   
B    3,000   Dresser, Inc., 9.375%, 4/15/11  3,285,000   
B    2,250 2 Dynegy Holdings, Inc., 10.125%, 7/15/13  2,567,812   
B    2,950   Orion Power Holdings, Inc., 12.00%, 5/01/10  3,746,500   
BB    2,000   Williams Cos, Inc., 8.125%, 3/15/12  2,315,000   


 
        15,341,812   


 
      Entertainment & Leisure—0.2%     
Ba3    763   Host Marriot Corp., Ser. B, 7.875%, 8/01/08  786,844   


 
      Financial Institutions—21.7%     
AA+    9,500 2,3 American General Institute Cap. A, 7.57%, 12/01/45  11,780,665   
Aa3    12,000 2 Barclays Bank PLC, 6.86%, 9/29/49 (United Kingdom)  13,495,152   
BB    1,000   Crum & Forster Holdings Corp., 10.375%, 6/15/13  1,115,000   
B+    3,375 2 E*Trade Financial Corp., 8.00%, 6/15/11  3,619,688   
BB    8,000   Fairfax Financial Holdings, Ltd., 7.75%, 4/26/12 (Canada)  8,080,000   
BBB    11,500   First Midwest Cap. Trust I, Ser. B, 6.95%, 12/01/33  12,525,701   
AA-    8,000   HSBC Bank USA, Inc., 5.875%, 11/01/34  8,083,600   
BBB-    5,000   Kingsway America, Inc., 7.50%, 2/01/14  5,164,700   
AA    7,399   Lloyds Bank Ltd., 6.90%, 11/22/49 (United Kingdom)  7,760,368   
BB    692   Midland Funding Corp. II, Ser. A, 11.75%, 7/23/05  726,329   
A+    8,000   Prudential, 6.50%, 6/29/49  8,020,000   
B    2,400 2 Refco Finance Holdings LLC, 9.00%, 8/01/12  2,616,000   
A3    4,000   Resparcs Funding LP, 8.00%, 12/30/49 (United Kingdom)  4,216,000   
A+    5,000   Santander Financial Issuances, 7.25%, 11/01/15 (Cayman Islands)  5,911,650   
Ba1    2,000   Sovereign Capital Trust 1, 9.00%, 4/01/27  2,267,300   
AAA    4,479  2 Structured Asset Receivable Trust, 1.64%, 1/21/10  4,479,178   
A2    3,000 2 Westpac Cap. Trust IV, 5.256%, 12/29/49  2,934,060   


 
        102,795,391   


 
      Health Care—0.3%     
B3    1,415   Insight Health Services Corp., Ser. B, 9.875%, 11/01/11  1,429,150   


 
      Industrials—0.1%     
B-    300   ERICO Intl. Corp., 8.875%, 3/01/12  315,000   


 
      Media—1.3%     
B    1,950   Dex Media East, LLC, 12.125%, 11/15/12  2,379,000   
B1    696   PEI Holdings Inc., 11.00%, 3/15/10  805,620   
CCC    3,000   WRC Media, Inc., 12.75%, 11/15/09  2,853,750   


 
        6,038,370   


 
      Publishing—0.7%     
B+    3,000   Cenveo Corp., 9.625%, 3/15/12  3,315,000   


 
      Real Estate—1.4%     
      Rouse Co.,     
BB+    5,000      3.625%, 3/15/09  4,712,750   
BB+    2,000      5.375%, 11/26/13  1,918,400   


 
        6,631,150   


 
      Telecommunications—0.5%     
BB    2,0002   Qwest Corp., 7.875%, 9/01/11  2,170,000   


 
      Transportation—0.4%     
B    1,910   Sea Containers Ltd., 10.50%, 5/15/12 (Bermuda)  2,015,050   


 
      Total Corporate Bonds  169,895,343   


 
      Foreign Government Bonds—0.7%     
Baa2    3,000   United Mexican States, 8.00%, 9/24/22  3,439,500   


 
      Total Long-Term Investments (cost $640,664,930)  672,221,149   


 

See Notes to Financial Statements.

18


BlackRock Preferred Opportunity Trust (BPP) (continued)

Principal    
Amount    
(000 )                                                             Description  Value  








  SHORT-TERM INVESTMENT—4.0%   
  U.S. Government and Agency Zero Coupon Bond   
 
$
18,800   Federal Home Loan Bank, zero coupon, 1/03/05 (cost $18,798,694)  $ 18,798,694  



  Total Investments before borrowed bonds and investments sold short (cost $659,463,624)  691,019,843  



  BORROWED BONDS—2.9%   
  12,5004   U.S. Treasury Bonds, 1.80%, 1/03/05 (cost $13,796,875)  13,796,875  



  INVESTMENT SOLD SHORT—(2.9)%   
  (12,500 )  U.S. Treasury Bonds, 5.375%, 2/15/31 (proceeds $13,066,406)  (13,503,875 ) 



  Total investments, net of borrowed bonds and investments sold short—145.9%  $ 691,312,843  
  Assets in excess of liabilities—0.7%  3,327,980  
  Preferred shares at redemption value, including dividends payable—(46.6%)  (220,831,854 ) 

 




  Net Assets applicable to common shareholders—100%  $ 473,808,969  

 






1      Using the higher of S&P’s, Moody’s or Fitch’s rating.
2      Security is not registered under the Securities Act of 1933. These securities may be resold in transactions in accordance with Rule 144A under that Act, to qualified institutional buyers. As of December 31, 2004, the Trust held 37.3% of its net assets, with a current market value of $176,516,369, in securities restricted as to resale.
3      Entire or partial principal amount pledged as collateral for financial futures contracts.
4      Entire principal amount pledged as collateral for Investments Sold Short. See Note 1 in the Notes to Financial Statements.
 

A category in the Preferred Securities, Trust Preferred Securities and Corporate Bonds sections may contain multiple industries as defined by the SEC’s Standard Industry Codes.


KEY TO ABBREVIATIONS 
CABCO    Corporate Asset Backed Corporation    PPLUS    Preferred Plus 
CORTS    Corporate Backed Trust Securities    SATURNS    Structured Asset Trust Unit Repackagings 


See Notes to Financial Statements.

19


STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2004


      Global   Preferred  
  Advantage Term   Floating Rate   Opportunity  
  Trust1   Income Trust   Trust  
  (BAT)   (BGT)   (BPP)  


 

 

 
Assets           
Investments at value2  $  140,120,792   $ 738,917,422   $ 691,019,843  
Cash       1,993,271     2,695,625  
Foreign currency at value3      13,882      
Receivable from investments sold    10,000,000   452,366      
Deposits with brokers as collateral for borrowed bonds          13,796,875  
Receivable for open forward foreign currency contracts      3,367,954      
Income receivable    191,956   5,602,993     5,950,133  
Unrealized appreciation on interest rate swaps          323,859  
Other assets    28,087   39,952     53,984  


 

 

 
    150,340,835   750,387,840     713,840,319  


 

 

 
 
Liabilities           
Reverse repurchase agreements    39,944,875        
Payable to custodian    9,747,717        
Payable for investments purchased      49,375,846      
Variation margin payable          756,625  
Investments sold short at value4          13,503,875  
Interest payable    67,059       1,336,279  
Payable for open forward foreign currency contacts      3,425,437      
Dividends payable    554,786   2,190,779     3,050,969  
Investment advisory fee payable    43,195   324,874     383,577  
Administration fee payable    14,388        
Deferred Directors’ or Trustees’ fees    23,980   2,095     34,370  
Payable to affiliates    8,061   8,593      
Other accrued expenses    204,047   447,194     133,801  


 

 

 
    50,608,108   55,774,818     19,199,496  


 

 

 
 
Preferred Shares at Redemption Value           
$0.001 par value per share and $25,000 liquidation value per share,           
   including dividends payable5  $   $ 243,485,706   $  220,831,854  


 

 

 
 
Net Assets Applicable to Common Shareholders  $  99,732,727   $ 451,127,316   $  473,808,969  


 

 

 
Composition of Net Assets Applicable to Common Shareholders:           
   Par value  $  95,107   $ 23,481   $  18,306  
   Paid-in capital in excess of par    88,784,068   444,690,260     433,520,477  
   Undistributed (distributions in excess of) net investment income 
  10,040,004   (1,900,197 )    (34,370 ) 
   Accumulated net realized gain (loss)    (2,140,174 )  (44,284 )    10,696,263  
   Net unrealized appreciation    2,953,722   8,358,056     29,608,293  


 

 

 
Net assets applicable to common shareholders, December 31, 2004  $ 99,732,727   $ 451,127,316   $  473,808,969  


 

 

 
Net asset value per common share6  $  10.49   $ 19.21   $  25.88  


 

 

 
 
1 Consolidated Statement of Assets and Liabilities           
2 Investments at cost  $  137,167,070   $ 730,507,662   $  659,463,624  
3 Foreign currency at cost      13,539      
4 Proceeds received          13,066,406  
5 Preferred shares outstanding      9,738     8,832  
6 Common shares outstanding    9,510,667   23,481,021     18,305,777  

See Notes to Financial Statements.

20


STATEMENTS OF OPERATIONS
For the period
1 ended December 31, 2004


    Global   Preferred  
  Advantage Term   Floating Rate   Opportunity  
  Trust2   Income Trust   Trust  
  (BAT)   (BGT)   (BPP)  


 

 

 
Investment Income       
   Interest income  $ 7,765,147   $ 9,115,388   $ 30,348,979  
   Dividend income  1,215     16,946,942  


 

 

 
         Total investment income  7,766,362   9,115,388   47,295,921  


 

 

 
Expenses       
   Investment advisory  529,933   1,493,235   4,482,902  
   Administration  84,789      
   Transfer agent  15,573   7,624   15,006  
   Custodian  72,339   83,563   117,624  
   Reports to shareholders  30,490   38,962   89,026  
   Directors/Trustees  17,118   19,989   56,364  
   Registration  29,568   10,673   28,285  
   Independent accountants  42,686   51,238   44,512  
   Legal  33,294   18,872   61,375  
   Insurance  9,590   20,590   63,203  
   Organization    15,000    
   Auction agent    120,936   579,128  
   Miscellaneous  20,934   22,684   56,142  


 

 

 
         Total expenses excluding interest expense and excise tax  886,314   1,903,366   5,593,567  
             Interest expense  427,235   2,548   1,156,065  
             Excise tax  50,000      


 

 

 
         Total expenses  1,363,549   1,905,914   6,749,632  
             Less: fees waived by Advisor    (398,196 )   
             Less: fees paid indirectly  (603 )  (37,322 )  (6,501 ) 


 

 

 
         Net expenses  1,362,946   1,470,396   6,743,131  


 

 

 
Net investment income  6,403,416   7,644,992   40,552,790  


 

 

 
 
Realized and Unrealized Gain (Loss)       
Net realized gain (loss) on:       
         Investments  2,573,472   97,506   21,147,890  
         Foreign currency    7,055    
         Futures  9,141     (132,867 ) 
         Interest rate swaps      (7,461,538 ) 
         Short sales      (1,060,504 ) 


 

 

 
  2,582,613   104,561   12,492,981  


 

 

 
Net change in unrealized appreciation/depreciation on:       
         Investments  (8,219,268 )  8,409,759   (5,479,228 ) 
         Foreign currency    (51,703 )   
         Futures      (1,649,386 ) 
         Interest rate swaps      1,330,855  
         Short sales      (437,469 ) 


 

 

 
  (8,219,268 )  8,358,056   (6,235,228 ) 


 

 

 
Net gain (loss)  (5,636,655 )  8,462,617   6,257,753  


 

 

 
Dividends and Distributions to Preferred Shareholders from:       
   Net investment income    (945,917 )  (2,900,841 ) 
   Net realized gains      (402,710 ) 


 

 

 
Total dividends and distributions    (945,917 )  (3,303,551 ) 


 

 

 
 
Net Increase in Net Assets Applicable to Common Shareholders       
     Resulting from Operations  $ 766,761   $ 15,161,692   $ 43,506,992  


 

 

 


1      Commencement of investment operations for Global Floating Rate Income was August 30, 2004. This information includes the initial investment by BlackRock Funding, Inc. The other Trusts’ statements are for a full year.
2      Consolidated Statement of Operations.
 

See Notes to Financial Statements.

21


STATEMENTS OF CASH FLOWS
For the period
1 ended December 31, 2004


    Global   Preferred  
Reconciliation of Net Increase  Advantage   Floating Rate   Opportunity  
in Net Assets Resulting from Operations  Term Trust2   Income Trust   Trust  
to Net Cash Provided by (Used for) Operating Activities  (BAT)   (BGT)   (BPP)  


 

 

 
Net increase in net assets resulting from operations  $ 766,761   $ 15,161,692   $ 43,506,992  


 

 

 
Purchases of long-term investments  (24,940,597 )  (750,013,307 )  (479,878,051 ) 
Proceeds from sales of long-term investments  31,230,764   52,361,916   511,407,204  
Net purchases of short-term investments  (6,899,164 )  (32,676,373 )  (17,358,395 ) 
Amortization of premium and discount on investments  (5,761,799 )  (75,338 )  546,440  
Net realized gain  (2,573,472 )  (104,561 )  (20,966,596 ) 
Decrease (Increase) in unrealized appreciation/depreciation  8,219,268   (8,358,056 )  5,479,229  
Net effect of exchange rates on foreign currencies    (51,703 )   
Decrease in receivable for investments sold short      13,503,875  
Increase in unrealized appreciation of interest rate swaps      (1,330,855 ) 
Increase in deposits with brokers as collateral for borrowed bonds      (13,796,875 ) 
Decrease (Increase) in receivable for investments sold  (10,000,000 )  (452,366 )  6,084,833  
Increase in receivable for open forward foreign currency contracts    (3,367,954 )   
Decrease (Increase) in interest receivable  266   (5,602,993 )  881,298  
Increase in other assets  (3,374 )  (39,952 )  (6,923 ) 
Increase (Decrease) in payable for investments purchased    49,375,846   (6,986,814 ) 
Increase in payable for open forward foreign currency contacts    3,425,437    
Increase in variation margin payable      694,125  
Increase in interest payable  47,702     358,675  
Increase (Decrease) in investment advisory fee payable  (3,031 )  324,874   1,507  
Decrease in administration fee payable  (485 )     
Increase in deferred Directors/Trustees fees  3,393   2,095   21,350  
Increase (Decrease) in payable to affiliates  (3,864 )  8,593    
Increase (Decrease) in other accrued expenses  (280,453 )  447,194   (21,692 ) 


 

 

 
   Total adjustments  (10,964,846 )  (694,796,648 )  (1,367,665 ) 


 

 

 
Net cash provided by (used for) operating activities  $ (10,198,085 )  $ (679,634,956 )  $ 42,139,327  


 

 

 
Increase (Decrease) in Cash       
Net cash provided by (used for) operating activities  $ (10,198,085 )  $ (679,634,956 )  $ 42,139,327  


 

 

 
Cash provided by (used for) financing activities:       
   Capital contributions    444,728,741    
   Increase (Decrease) in reverse repurchase agreements  9,867,050     (3,486,000 ) 
Increase (Decrease) in preferred shares at redemption value including       
       dividends payable    243,485,706   (8,920 ) 
   Cash dividends paid to common shareholders  (9,472,587 )  (6,572,338 )  (37,940,626 ) 


 

 

 
Net cash provided by (used for) financing activities  394,463   681,642,109   (41,435,546 ) 


 

 

 
   Net increase (decrease) in cash  (9,803,622 )  2,007,153   703,781  
   Cash at beginning of period  55,905     1,991,844  


 

 

 
   Cash and foreign currency (overdraft) at end of period  $ (9,747,717 )  $ 2,007,153   $ 2,695,625  


 

 

 


1      Commencement of investment operations for Global Floating Rate Income was August 30, 2004. This information includes the initial investment by BlackRock Funding, Inc. The other Trusts’ statements are for a full year.
2      Consolidated Statement of Cash Flows.
 

See Notes to Financial Statements.

22


STATEMENTS OF CHANGES IN NET ASSETS
For the periods
1 ended December 31, 2004 and 2003


  Advantage   Global Floating Rate   Preferred  
  Term Trust2   Income Trust   Opportunity Trust  
  (BAT)   (BGT)   (BPP)  


 

 

 
  2004   2003   2004   2004   2003  


 

 

 

 

 
Increase (Decrease) in Net Assets           
     Applicable to Common Shareholders           
 
Operations:           
   Net investment income  $ 6,403,416   $ 7,887,060   $ 7,644,992   $ 40,552,790   $ 31,539,785  
   Net realized gain (loss)  2,582,613   (5,849,233 )  104,561   12,492,981   (374,554 ) 
   Net change in unrealized appreciation/           
         depreciation  (8,219,268 )  (1,198,427 )  8,358,056   (6,235,228 )  35,843,521  
   Dividends and distributions to preferred           
         shareholders from:           
         Net investment income      (945,917 )  (2,900,841 )  (1,805,661 ) 
         Net realized gains        (402,710 ) (4,742 ) 


 

 

 

 

 
Net increase in net assets applicable to common           
   shareholders resulting from operations  766,761   839,400   15,161,692   43,506,992   65,198,349  


 

 

 

 

 
 
Dividends and Distributions to           
     Common Shareholders from:           
   Net investment income  (554,749 )  (6,657,165 )  (8,763,117 )  (36,611,627 )  (30,435,478 ) 
   Net realized gains        (1,328,999 )  (74,051 ) 
   Tax return of capital distributions  (8,917,875 )         


 

 

 

 

 
Total dividends and distributions  (9,472,624 )  (6,657,165 )  (8,763,117 )  (37,940,626 )  (30,509,529 ) 


 

 

 

 

 
 
Capital Share Transactions:           
   Net proceeds from the issuance of common           
         shares      438,510,001     388,477,506  
   Net proceeds from the underwriters’           
         over-allotment option exercised      9,053,500     47,650,000  
   Offering costs relating to the issuance           
         of preferred shares      (2,834,760 )    (2,597,000 ) 
   Reinvestment of common dividends          23,277  


 

 

 




 
Net proceeds from capital share transactions      444,728,741     433,553,783  


 

 

 

 

 
Total increase (decrease)  (8,705,863 )  (5,817,765 )  451,127,316   5,566,366   468,242,603  


 

 

 

 

 
 
Net Assets Applicable to Common           
     Shareholders           
Beginning of period  108,438,590   114,256,355     468,242,603    


 

 

 

 


End of period  $ 99,732,727   $ 108,438,590   $ 451,127,316   $ 473,808,969   $ 468,242,603  


 

 

 

 

 
End of period undistributed (distributions in          
   excess of) net investment income $ 10,040,004   $ 16,107,109   $ (1,900,197 )  $ (34,370 )  $ (683,854 ) 


1      Commencement of investment operations for Global Floating Rate Income and Preferred Opportunity was August 30, 2004, and February 28, 2003, respectively. This information includes the initial investment by BlackRock Funding, Inc. The other Trusts’ statements are for a full year.
2      Consolidated Statement of Changes in Net Assets.
 

See Notes to Financial Statements

23


CONSOLIDATED FINANCIAL HIGHLIGHTS

BlackRock Advantage Term Trust (BAT)

  Year Ended December 31,  
 
 
  2004   2003   2002   2001   2000  


 

 

 

 

 
PER SHARE OPERATING PERFORMANCE:             
Net asset value, beginning of year  $  11.40   $ 12.01   $ 11.64   $ 10.83   $ 10.04  


 

 

 

 

 
Investment operations:             
   Net investment income    0.67   0.83   1.19   1.00   0.59  
   Net realized and unrealized gain (loss)    (0.58 )  (0.74 )  (0.18 )  0.41   0.80  


 

 

 

 

 
Net increase from investment operations    0.09   0.09   1.01   1.41   1.39  


 

 

 

 

 
Dividends and distributions from:             
   Net investment income    (0.06 )  (0.70 )  (0.64 )  (0.60 )  (0.60 ) 
   Tax return of capital    (0.94 )         


 

 

 

 

 
Total dividends and distributions    (1.00 )  (0.70 )  (0.64 )  (0.60 )  (0.60 ) 


 

 

 

 

 
Net asset value, end of year  $  10.49   $ 11.40   $ 12.01   $ 11.64   $ 10.83  


 

 

 

 

 
Market price, end of year  $  10.47   $ 11.30   $ 11.85   $ 11.15   $ 9.88  


 

 

 

 

 
TOTAL INVESTMENT RETURN1    1.45 %  1.25 %  12.26 %  19.44 %  16.28 % 


 

 

 

 

 
RATIOS TO AVERAGE NET ASSETS:             
Total expenses    1.29 %  1.42 %  1.82 %  2.87 %  4.06 % 
Net expenses    1.29 %  1.42 %  1.82 %  2.87 %  4.06 % 
Net expenses excluding interest expense and excise tax    0.84 %  0.84 %  0.86 %  0.92 %  0.88 % 
Net investment income    6.04 %  7.04 %  9.98 %  8.78 %  5.72 % 
SUPPLEMENTAL DATA:             
Average net assets (000)  $  105,987   $ 111,990   $ 113,632   $ 108,142   $ 98,368  
Portfolio turnover    20 %  8 %  4 %  17 %  17 % 
Net assets, end of year (000)  $  99,733   $ 108,439   $ 114,256   $ 110,685   $ 103,010  
Reverse repurchase agreements outstanding, end of year (000)  $  39,945   $ 30,078   $ 27,874   $ 34,500   $ 48,262  
Asset coverage, end of year2  $  3,497   $ 4,605   $ 5,099   $ 4,208   $ 3,134  


1      Total investment return is calculated assuming a purchase of a share at the current market price on the first day and a sale at the current market price on the last day of each year reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Trust’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions. Total investment returns for less than a full year are not annualized. Past performance is not a guarantee of future results.
2      Per $1,000 of reverse repurchase agreements outstanding.

The information in the above Financial Highlights represents the operating performance for a common share outstanding, total investment returns, ratios to average net assets and other supplemental data for each year indicated. This information has been determined based upon financial information provided in the financial statements and market price data for the Trust’s common shares.

See Notes to Financial Statements

24


FINANCIAL HIGHLIGHTS

BlackRock Global Floating Rate Income Trust (BGT)

  For the period  
  August 30, 20041  
  through  
  December 31, 2004  



PER SHARE OPERATING PERFORMANCE:     
Net asset value, beginning of period  $  19.10 2



Investment operations:     
   Net investment income    0.33  
   Net realized and unrealized gain    0.35  
   Dividends to preferred shareholders from net investment income    (0.04 ) 



Net increase from investment operations    0.64  



Dividends to common shareholders from net investment income    (0.37 ) 



Capital charges with respect to issuance of:     
   Common shares    (0.04 ) 
   Preferred shares    (0.12 ) 



Total capital charges    (0.16 ) 



Net asset value, end of period  $  19.21  



Market price, end of period  $  18.63  



TOTAL INVESTMENT RETURN3    (5.00 )% 



RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:4,5     
Total expenses    1.26 % 
Net expenses    0.97 % 
Net expenses excluding interest expense    0.97 % 
Net investment income before preferred share dividends    5.04 % 
Preferred share dividends    0.62 % 
Net investment income available to common shareholders    4.42 % 
SUPPLEMENTAL DATA:     
Average net assets (000)  $  446,660  
Portfolio turnover    11 % 
Net assets applicable to common shareholders, end of period (000)  $  451,126  
Preferred shares value outstanding, end of period (000)  $  243,450  
Asset coverage per preferred share, end of period  $  71,330  


1 Commencement of investment operations. This information includes the initial investment by BlackRock Funding, Inc.
2   Net asset value, beginning of period, reflects a deduction of $0.90 per share sales charge from the initial offering price of $20.00 per share.
3   Total investment return is calculated assuming a purchase of a share at the current market price on the first day and a sale at the current market price on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Trust’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions. Total investment returns for less than a full year are not annualized. Past performance is not a guarantee of future results.
4      Annualized.
5      Ratios are calculated on the basis of income and expenses applicable to both the common and preferred shares relative to the average net assets of the common shareholders.

The information in the above Financial Highlights represents the operating performance for a common share outstanding, total investment returns, ratios to average net assets and other supplemental data for each period indicated. This information has been determined based upon financial information provided in the financial statements and market price data for the Trust’s common shares.

See Notes to Financial Statements

25


FINANCIAL HIGHLIGHTS

BlackRock Preferred Opportunity Trust (BPP)

      For the period  
  For the Year   February 28, 20031  
  Ended   through  
  December 31, 2004   December 31, 2003  


 

 
PER SHARE OPERATING PERFORMANCE:         
Net asset value, beginning of period  $  25.58   $  23.88  2


 

 
Investment operations:         
   Net investment income    2.22     1.72  
   Net realized and unrealized gain    0.33     1.93  
   Dividends and distributions to preferred shareholders from:         
         Net investment income    (0.l6 )    (0.10 ) 
         Net realized gains    (0.02 )     


 

 
Net increase from investment operations    2.37     3.55  


 

 
Dividends and distributions to common shareholders from:         
   Net investment income    (2.00 )    (1.66 ) 
   Net realized gains    (0.07 )     


 

 
Total dividends and distributions    (2.07 )    (1.66 ) 


 

 
Capital charges with respect to issuance of:         
   Common shares        (0.05 ) 
   Preferred shares        (0.14 ) 


 

 
Total capital charges        (0.19 ) 


 

 
Net asset value, end of period  $  25.88   $  25.58  


 

 
Market price, end of period  $  25.39   $  24.83  


 

 
TOTAL INVESTMENT RETURN3    11.01 %    6.28 % 


 

 
RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:4         
Total expenses    1.44 %    1.52 %5 
Net expenses    1.44 %    1.52 %5 
Net expenses excluding interest expense    1.19 %    1.16 %5 
Net investment income before preferred share dividends    8.66 %    8.35 %5 
Preferred share dividends    0.62 %    0.48 %5 
Net investment income available to common shareholders    8.04 %    7.87 %5 
SUPPLEMENTAL DATA:         
Average net assets of common shareholders (000)  $  468,110   $  449,345  
Portfolio turnover    88 %    98 % 
Net assets applicable to common shareholders, end of period (000)  $  473,809   $  468,243  
Preferred shares value outstanding, end of period (000)  $  220,800   $  220,841  
Reverse repurchase agreements outstanding, end of period (000)  $    $  3,486  
Asset coverage per preferred share, end of period  $  78,650   $  78,021  


1      Commencement of investment operations. This information includes the initial investment by BlackRock Funding, Inc.
2      Net asset value, beginning of period, reflects a deduction of $1.12 per share sales charge from the initial offering price of $25.00 per share.
3      Total investment return is calculated assuming a purchase of a share at the current market price on the first day and a sale at the current market price on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Trust’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions. Total investment returns for less than a full year are not annualized. Past performance is not a guarantee of future results.
4      Ratios are calculated on the basis of income and expenses applicable to both the common and preferred shares relative to the average net assets of the common shareholders.
5      Annualized.

The information in the above Financial Highlights represents the operating performance for a common share outstanding, total investment returns, ratios to average net assets and other supplemental data for each period indicated. This information has been determined based upon financial information provided in the financial statements and market price data for the Trust’s common shares.

See Notes to Financial Statements

26


NOTES TO FINANCIAL STATEMENTS


Note 1. Organization & Accounting Policies

The BlackRock Advantage Term Trust Inc. (“Advantage”), a Maryland corporation, is registered as a diversi-fied, closed-end management investment company under the Investment Company Act of 1940, as amended. BlackRock Global Floating Rate Income Trust (“Global”) and BlackRock Preferred Opportunity Trust (“Preferred Opportunity”), are organized as Delaware statutory trusts (collectively with Advantage, the “Trusts”), are registered as non-diversified and diversified, closed-end management investment companies, respectively, under the Investment Company Act of 1940, as amended.

     Advantage transferred, on October 31, 1998, a substantial portion of its total assets to a 100% owned regulated investment company subsidiary called BAT Subsidiary, Inc. The financial statements and these notes to the financial statements for Advantage are consolidated and include the operations of Advantage and its wholly owned subsidiary after elimination of all intercompany transactions and balances.

     The Board of Directors of Advantage adopted a Plan of Liquidation and Dissolution (each a “Plan”) effective January 2, 2004. Pursuant to the terms of the Plan, the Board of Directors shall oversee the complete liquidation and winding up of Advantage in an orderly fashion prior to December 31, 2005.

The following is a summary of significant accounting policies followed by the Trusts.

Investment Valuation: The Trusts value most of their investments on the basis of current market quotations provided by dealers or pricing services selected under the supervision of each Trust’s Board (the “Board”) of Directors/Trustees (the “Trustees”). In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, market transactions in comparable investments, various relationships observed in the market between investments, and calculated yield measures based on valuation technology commonly employed in the market for such investments. Exchange-traded options are valued at their last sales price as of the close of options trading on applicable exchanges. In the absence of a last sale, options are valued at the average of the quoted bid and asked prices as of the close of business. A futures contract is valued at the last sale price as of the close of the commodities exchange on which it trades. Short-term securities may be valued at amortized cost. Investments in open-end investment companies are valued at net asset value. Investments or other assets for which such current market quotations are not readily available are valued at fair value (“Fair Value Assets”) as determined in good faith under procedures established by, and under the general supervision and responsibility of, each Trust’s Board. The investment advisor and/or sub-advisor will submit its recommendations regarding the valuation and/or valuation methodologies for Fair Value Assets to a valuation committee. The valuation committee may accept, modify or reject any recommendations. The pricing of all Fair Value Assets shall be subsequently reported to and ratified by the Board.

     When determining the price for a Fair Value Asset, the investment advisor and/or sub-advisor shall seek to determine the price that the Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that BlackRock Advisors, Inc., the investment advisor, deems relevant.

Investment Transactions and Investment Income: Investment transactions are recorded on trade date. Realized and unrealized gains and losses are calculated on the identified cost basis. Each Trust records interest income on an accrual basis and amortizes premium and/or accretes discount on securities purchased using the interest method. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed. These dividends are recorded as soon as the Trust is informed of the ex-dividend date. Dividend income on foreign securities is recorded net of any withholding tax.

Repurchase Agreements: In connection with transactions in repurchase agreements, a Trust’s custodian takes possession of the underlying collateral securities, the value of which at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by a Trust may be delayed or limited.

Bank Loans: In the process of buying, selling and holding bank loans, a Trust may receive and/or pay certain fees. These fees are in addition to interest payments received and may include facility fees, commitment fees, amendment fees, commissions and prepayment penalty fees. When a Trust buys a bank loan it may receive a facility fee and when it sells a bank loan it may pay a facility fee. On an ongoing basis, a Trust may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a bank loan. In certain circumstances, a Trust may receive a prepayment penalty fee upon the prepayment of a bank loan by a borrower. Other fees received by a Trust may include covenant waiver fees and covenant modification fees. For these loans, the Trust commits to provide funding up to the face amount of the loan. The amount drawn down by the borrower may vary during the term of the loan.

Option Writing/Purchasing: When a Trust writes or purchases an option, an amount equal to the premium received or paid by the Trust is recorded as a liability or an asset and is subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by the Trust on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or the proceeds from the sale in determining whether a Trust has realized a gain or a loss on investment transactions. A Trust, as writer of an option, may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option.

     Options, when used by the Trusts, help in maintaining a targeted duration. Duration is a measure of the price sensitivity of a security or a portfolio to relative changes in interest rates. For instance, a duration of “one” means that a portfolio’s or a security’s price would be expected

27


to change by approximately one percent with a one percent change in interest rates, while a duration of five would imply that the price would move approximately five percent in relation to a one percent change in interest rates.

     Option writing and purchasing may be used by the Trusts as an attempt to manage the duration of positions, or collections of positions, so that changes in interest rates do not adversely affect the targeted duration of the portfolio unexpectedly. A call option gives the purchaser of the option the right (but not obligation) to buy, and obligates the seller to sell (when the option is exercised), the underlying position at the exercise price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying position at the exercise price at any time or at a specified time during the option period. Put or call options can be purchased or sold to effectively help manage the targeted duration of the portfolio.

     The main risk that is associated with purchasing options is that the option expires without being exercised. In this case, the option expires worthless and the premium paid for the option is considered the loss. The risk associated with writing call options is that a Trust may forgo the opportunity for a profit if the market value of the underlying position increases and the option is exercised. The risk in writing put options is that a Trust may incur a loss if the market value of the underlying position decreases and the option is exercised. In addition, the Trust risks not being able to enter into a closing transaction for the written option as the result of an illiquid market.

Interest Rate Swaps: In an interest rate swap, one investor pays a floating rate of interest on a notional principal amount and receives a fixed rate of interest on the same notional principal amount for a specified period of time. Alternatively, an investor may pay a fixed rate and receive a floating rate. Interest rate swaps are efficient as asset/liability management tools. In more complex swaps, the notional principal amount may decline (or amortize) over time.

     During the term of the swap, changes in the value of the swap are recognized as unrealized gains or losses by “marking-to-market” to reflect the market value of the swap. When the swap is terminated, a Trust will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trust’s basis in the contract, if any.

     The Trusts are exposed to credit loss in the event of non-performance by the other party to the swap. However, the Trusts closely monitor swaps and do not anticipate non-performance by any counterparty.

Swap Options: Swap options are similar to options on securities except that instead of selling or purchasing the right to buy or sell a security, the writer or purchaser of the swap option is granting or buying the right to enter into a previously agreed upon interest rate swap agreement at any time before the expiration of the option. Premiums received or paid from writing or purchasing options are recorded as liabilities or assets and are subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by a Trust on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commission, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or the proceeds from the sale in determining whether a Trust has realized a gain or loss on investment transactions.

     The main risk that is associated with purchasing swap options is that the swap option expires without being exercised. In this case, the option expires worthless and the premium paid for the swap option is considered the loss. The main risk that is associated with the writing of a swap option is the market risk of an unfavorable change in the value of the interest rate swap underlying the written swap option.

     Swap options may be used by the Trusts to manage the duration of the Trusts’ portfolios in a manner similar to more generic options described above.

Interest Rate Caps: Interest rate caps are similar to interest rate swaps, except that one party agrees to pay a fee, while the other party pays the excess, if any, of a floating rate over a specified fixed or floating rate.

     Interest rate caps are intended to both manage the duration of the Trusts’ portfolios and their exposure to changes in short-term interest rates. Owning interest rate caps reduces a portfolio’s duration, making it less sensitive to changes in interest rates from a market value perspective. The effect on income involves protection from rising short-term interest rates, which the Trusts experience primarily in the form of leverage.

     The Trusts are exposed to credit loss in the event of non-performance by the other party to the interest rate cap. However, the Trusts do not anticipate non-performance by any counterparty.

     Transaction fees paid or received by the Trusts are recognized as assets or liabilities and amortized or accreted into interest expense or income over the life of the interest rate cap. The asset or liability is subsequently adjusted to the current market value of the interest rate cap purchased or sold. Changes in the value of the interest rate cap are recognized as unrealized gains and losses.

Interest Rate Floors: Interest rate floors are similar to interest rate swaps, except that one party agrees to pay a fee, while the other party pays the deficiency, if any, of a floating rate under a specified fixed or floating rate.

     Interest rate floors are used by the Trusts to both manage the duration of the portfolios and their exposure to changes in short-term interest rates. Selling interest rate floors reduces a portfolio’s duration, making it less sensitive to changes in interest rates from a market value perspective. The Trusts’ leverage provides extra income in a period of falling rates. Selling floors reduces some of that extra income by partially monetizing it as an up-front payment which the Trusts receive.

     The Trusts are exposed to credit loss in the event of non-performance by the other party to the interest rate floor. However, the Trusts do not anticipate non-performance by any counterparty.

     Transaction fees paid or received by the Trusts are recognized as assets or liabilities and amortized or accreted into interest expense or income over the life of the interest rate floor. The asset or liability is subsequently adjusted to the current market value of the interest rate floor purchased or sold. Changes in the value of the interest rate floor are recognized as unrealized gains and losses.

28


Financial Futures Contracts: A futures contract is an agreement between two parties to buy and sell a financial instrument for a set price on a future date. Initial margin deposits are made upon entering into futures contracts and can be either cash or securities. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by “marking-to-market” on a daily basis to reflect the market value of the contract at the end of each day’s trading. Variation margin payments are made or received, depending upon whether unrealized gains or losses are incurred. When the contract is closed, a Trust records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trust’s basis in the contract.

     Financial futures contracts, when used by the Trusts, help in maintaining a targeted duration. Futures contracts can be sold to effectively shorten an otherwise longer duration portfolio. In the same sense, futures contracts can be purchased to lengthen a portfolio that is shorter than its duration target. Thus, by buying or selling futures contracts, the Trusts may attempt to manage the duration of positions so that changes in interest rates do not change the duration of the portfolio unexpectedly.

Forward Currency Contracts: The Trusts enter into forward currency contracts primarily to facilitate settlement of purchases and sales of foreign securities and to help manage the overall exposure to foreign currency. A forward contract is a commitment to purchase or sell a foreign currency at a future date (usually the security transaction settlement date) at a negotiated forward rate. In the event that a security fails to settle within the normal settlement period, the forward currency contract is renegotiated at a new rate. The gain or loss arising from the difference between the settlement value of the original and renegotiated forward contracts is isolated and is included in net realized gains (losses) from foreign currency transactions. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contract.

     Forward currency contracts, when used by the Trusts, help to manage the overall exposure to the foreign currency backing some of the investments held by the Trusts. Forward currency contracts are not meant to be used to eliminate all of the exposure to the foreign currency, rather they allow the Trusts to limit their exposure to foreign currency within a narrow band to the objectives of the Trusts.

Foreign Currency Translation: Foreign currency amounts are translated into United States dollars on the following basis:

  (i)      market value of investment securities, other assets and liabilities—at the London 4:00 PM rates of exchange.
 
  (ii)      purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.
 

     The Trusts isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Trusts isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the period.

     Net realized and unrealized foreign exchange gains and losses including realized foreign exchange gains and losses from sales and maturities of foreign portfolio securities, maturities of foreign reverse repurchase agreements, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of interest and discount recorded on the Trusts’ books and the U.S. dollar equivalent amounts actually received or paid and changes in unrealized foreign exchange gains and losses in the value of portfolio securities and other assets and liabilities arising as a result of changes in the exchange rate.

     Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. dollar.

Short Sales: The Trusts may make short sales of securities as a method of managing potential price declines in similar securities owned. When a Trust makes a short sale, it may borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the sale. The Trusts may have to pay a fee to borrow the particular securities and may be obligated to pay over any payments received on such borrowed securities. A gain, limited to the price at which a Trust sold the security short, or a loss, unlimited as to dollar amount, will be recognized upon the termination of a short sale if the market price is greater or less than the proceeds originally received.

Security Lending: The Trusts may lend their portfolio securities to qualified institutions. The loans are secured by collateral at least equal, at all times, to the market value of the securities loaned. The Trusts may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The Trusts receive compensation for lending their securities in the form of interest on the loan. The Trusts also continue to receive interest on the securities loaned, and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the accounts of the Trusts. The Trusts did not enter into any security lending transactions during the year ended December 31, 2004.

Segregation: In cases in which the Investment Company Act of 1940, as amended, and the interpretive positions of the Securities and Exchange Commission (the “Commission”) require that each Trust segregate assets in connection with certain investments (e.g., extended settlements, when-issued securities, reverse repurchase agreements or futures contracts), each Trust will, consistent with certain interpretive letters issued by the Commission, designate on its books and records cash or other liquid debt securities having a market value at least equal to the amount that would otherwise be required to be physically segregated.

Federal Income Taxes: It is each Trust’s intention to continue to be treated as a regulated investment company under the Internal Revenue Code and to distribute sufficient amounts of their taxable income to shareholders. Therefore, no Federal income tax provisions are required. As part of a tax planning strategy, Advantage may retain a portion of its taxable income and pay excise tax on the undistributed amounts.

Dividends and Distributions: Each Trust declares and pays dividends and distributions to common shareholders monthly from net investment income, net realized short-term capital gains and other sources, if necessary. Net long-term capital gains, if any, in excess of loss car-ryforwards may be distributed annually. Dividends and distributions are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America.

29


Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Trust’s Board, non-interested Trustees are required to defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of other BlackRock closed-end funds selected by the Trustees. This has the same economic effect for the Trustees as if the Trustees had invested the deferred amounts in such Trusts.

     The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of the Trust. Each Trust may, however, elect to invest in common shares of those Trusts selected by the Trustees in order to match its deferred compensation obligations.

Reclassification of CapitalAccounts: In order to present undistributed (distribution in excess of) net investment income (“UNII”), accumulated net realized gain (“Accumulated Gain”) and paid-in capital (“PIC”) more closely to its tax character, the following accounts for each Trust were increased (decreased):

    Accumulated    
Trust  UNII   Gain   PIC  



 

 

 
Advantage  $ (2,997,897 )  $ 13,761   $ 2,984,136  
Global  163,845   (148,845 )  (15,000 ) 
Preferred Opportunity  (390,838 )  388,338   2,500  

Note 2. Agreements

     Each Trust has an Investment Management Agreement with BlackRock Advisors, Inc. (the “Advisor”), a wholly owned subsidiary of BlackRock, Inc. BlackRock Financial Management, Inc., a wholly owned subsidiary of BlackRock, Inc., serves as sub-advisor to Global and Preferred Opportunity. BlackRock, Inc. is an indirect, majority owned subsidiary of The PNC Financial Services Group, Inc. The Investment Management Agreement for Global and Preferred Opportunity covers both investment advisory and administration services. Advantage has an Administration Agreement with the Advisor.

     Each Trust’s investment advisory fee paid to the Advisor is computed weekly and payable monthly based on an annual rate, 0.50% for Advantage, of the Trust’s average weekly net assets and 0.75% for Global and 0.65% for Preferred Opportunity of each Trust’s average weekly managed assets. The administration fee paid to the Advisor is computed weekly and payable monthly based on an annual rate of 0.08% for Advantage based on the Trust’s average weekly net assets.

     Pursuant to the agreements, the Advisor provides continuous supervision of the investment portfolio and pays the compensation of officers of each Trust who are affiliated persons of the Advisor, as well as occupancy and certain clerical and accounting costs for each Trust. Each Trust bears all other costs and expenses, which include reimbursements to the Advisor for costs of employees that provide pricing, secondary market support and compliance services to each Trust. For the period ended December 31, 2004, the Trusts reimbursed the Advisor the following amounts:

Trust 
Amount 



Advantage  $ 8,418 
Global  11,858 
Preferred Opportunity  17,550 

     Pursuant to the terms of their custody agreements, each Trust received earnings credits from its custodian for positive cash balances maintained, which are used to offset custody fees.

Note 3. Portfolio Investments 

     Purchases and sales of investment securities, other than short-term investments, dollar rolls and U.S.  government securities, for the period ended December 31, 2004, aggregated as follows: 

Trust 
Purchases 
Sales 
 



 

 
Advantage  $ 23,843,784    $ 31,203,646   
Global  749,888,742  52,351,077   
Preferred Opportunity  582,778,552  626,721,834   

     Purchases and sales of U.S. government securities for the period ended December 31, 2004, aggregated as follows:

Trust  Purchases    Sales   





 
Advantage  $ 1,096,813    $    
Preferred Opportunity  9,993,975      5,751,993   

     A Trust may from time to time purchase in the secondary market certain mortgage pass-through securities packaged or master serviced by affiliates or mortgage related securities containing loans or mortgages originated by PNC Bank or its affiliates, including Midland Loan Services, Inc., all of which are affiliates of the Advisor. It is possible under certain circumstances, that Midland Loan Services, Inc., or its affiliates, could have interests that are in conflict with the holders of these mortgage backed securities, and such holders could have rights against Midland Loan Services, Inc. or its affiliates.

30


     At December 31, 2004, the total cost of securities for Federal income tax purposes and the aggregate gross unrealized appreciation and depreciation for securities held by each Trust were as follows:

Trust  Cost    Appreciation    Depreciation    Net   









 
Advantage  $ 137,226,910    $ 3,165,548    $ 271,666    $ 2,893,882   
Global  730,551,946    9,079,421    713,945    8,365,476   
Preferred Opportunity  659,479,232    33,064,704    1,524,093    31,540,611   

For Federal income tax purposes, the following Trust had capital loss carryforwards at December 31, 2004:

  Capital Loss       
Trust  Carryforward Amount    Expires   




 
Advantage  $ 98,294    2005   
  161,872    2008   
  127,941    2009   
  274,645    2010   
  83,667    2011   
  5,589,003    2012   


  $ 6,335,422       



     Accordingly, no capital gain distributions are expected to be paid to shareholders of a Trust until that Trust has net realized capital gains in excess of its carryforward amounts.

     Details of open financial futures contracts at December 31, 2004, were as follows: 

  Number of       Expiration    Value at    Value at   Unrealized  
  Contracts     Type Date    Trade Date   December 31, 2004   Depreciation  


 




 

 

 
Short Position:                   
Preferred Opportunity  700     30 Yr. U.S. T-Bond March ’05    $ 77,569,959    $ 78,750,000   $ (1,180,041 ) 
  872     10 Yr. U.S. T-Note March ’05    96,955,225    97,609,500   (654,275 ) 


 
                  $ (1,834,316 ) 


 
     Details of open forward currency contracts in Global at December 31, 2004, were as follows: 

     
      Contract to Value at    Value at       
  Settlement     Purchase/ Settlement    December 31,    Unrealized    
Foreign Currency  Date     Receive Date    2004    Depreciation    











 
Sold:                   
Euro  01/25/05    
2,530,000  
$ 3,367,954    $ 3,425,437    $ (57,483 )   


 
   Details of open interest rate swaps at December 31, 2004, were as follows: 

         
  Notional               Unrealized    
Trust  Amount     Fixed Floating    Termination    Appreciation    
  (000)      Rate Rate    Date    (Depreciation)    

 









 
Preferred Opportunity    $          80,000     4.495 %  3-month LIBOR    10/19/2014    $ 347,503    
  35,000     5.19 %  3-month LIBOR    10/19/2034    (23,644 )   


 
                $ 323,859    


 

     Preferred Opportunity pays a fixed interest rate and receives a floating rate.

Note 4. Borrowings Reverse Repurchase Agreements:

     The Trusts may enter into reverse repurchase agreements with qualified third-party broker-dealers as determined by and under the direction of each Trust’s Board. Interest on the value of reverse repurchase agreements issued and outstanding is based upon competitive market rates at the time of issuance. At the time a Trust enters into a reverse repurchase agreement, it will establish and maintain a segregated account with the lender, containing liquid investment grade securities having a value not less than the repurchase price, including accrued interest of the reverse repurchase agreement. Details of open reverse repurchase agreements at December 31, 2004, were as follows (please see corresponding Underlying Collateral chart on page 32):

        Trade  Maturity    Net Closing     
Trust/Counter Party    Rate   Date  Date    Amount    Par 









Advantage                     
    Deutsche Bank Securities, Inc.    2.28 %    12/2/04    1/7/05    $ 20,757,160    $ 20,711,250 
    2.17     12/2/04    1/7/05    13,291,733    13,263,750 


                    33,975,000 


 
    Lehman Brothers, Inc.    2.35     12/31/04    1/7/05    296,010    295,875 
    2.35     12/31/04    1/7/05    2,727,746    2,726,500 
    2.35     12/1/04    1/6/05    2,954,043    2,947,500 


                    $ 5,969,875 



31

     Details of underlying collateral for open reverse repurchase agreements at December 31, 2004, were as follows:

            Maturity    Original   
Current 
Market 
Trust/Counter Party    Description    Rate   Date    Face   
Face 
Value 











Advantage                         
    Deutsche Bank Securities, Inc.    Resolution Funding Corp.    0.00 %    7/15/05    $ 21,000,000    $ 21,000,000    $ 22,658,224 
    U.S. Treasury Strips    0.00     8/15/05    13,500,000    13,500,000    13,286,646 


                        35,944,870 


 
    Lehman Brothers, Inc.    Resolution Funding Corp.    0.00     7/15/05    300,000    300,000    296,496 
    Financing Corp. (FICO) Strips    0.00     7/15/05    2,800,000    2,800,000    2,724,831 
    U.S. Treasury Strips    0.00     8/15/05    3,000,000    3,000,000    2,952,588 


                        $ 5,973,915 




     The average daily balance and weighted average interest rate of reverse repurchase agreements during the period ended December 31, 2004, were as follows:

 
Average Daily 
Weighted Average
Trust 
Balance 
Interest Rate





Advantage  $ 28,839,818    1.48 % 
Global  113,937    2.24  
Preferred Opportunity  781,845    1.50  

Dollar Rolls: The Trusts may enter into dollar rolls in which a Trust sells securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon and maturity) securities on a specified future date. During the roll period the Trusts forgo principal and interest paid on the securities. The Trusts will be compensated by the interest earned on the cash proceeds of the initial sale and/or by the lower repurchase price at the future date. The Trusts did not enter into any dollar roll transactions during the period ended December 31, 2004.

Note 5. Distributions to Shareholders

     The tax character of distributions paid during the period ended December 31, 2004, and December 31, 2003, were as follows:

  December 31, 2004 








  Ordinary    Long-term        Total 
Distributions Paid From:  Income    Gains    Liquidating    Distributions 









Advantage*  $
554,749 
  $      $ 8,917,875    $
9,472,624 
Global 
9,709,034 
       
 
 
9,709,034 
Preferred Opportunity 
39,597,946 
    1,646,231   
 
 
41,244,177 
 
                       December 31, 2003     








  Ordinary    Long-term        Total 
Distributions Paid From:  Income    Gains    Liquidating    Distributions 








Advantage*  $ 6,657,165    $      $
— 
  $ 6,657,165 
Preferred Opportunity  32,241,139      78,793   
— 
  32,319,932 

     As of December 31, 2004, the components of distributable earnings on a tax basis were as follows:

  Undistributed    Undistributed     
  Ordinary    Long-term    Unrealized Net 
Trust  Income    Gains    Appreciation 







Advantage* 
$
2,838,030    $     
$
11,719,004 
Global           
8,305,353 
Preferred Opportunity  1,125,172      7,752,383   
31,392,631 

* The Trust is currently under a plan of liquidation. Shareholders should consult their tax advisor as to the proper tax treatment of distribution from the Trust.

Note 6. Capital

     There are 200 million of $0.01 par value common shares authorized for Advantage. There are an unlimited number of $0.001 par value common shares authorized for Preferred Opportunity and Global. At December 31, 2004, the common shares outstanding and the shares owned by affiliates of the Advisor of each Trust were as follows:

    Common Shares      Common Shares   
Trust    Outstanding      Owned   


 

 
Advantage   
9,510,667 
         
Global   
23,481,021 
    6,021     
Preferred Opportunity   
18,305,777 
         

32


     Transactions in common shares of beneficial interest from August 30, 2004, (commencement of investment operations) through December 31, 2004, for Global, and February 28, 2003, (commencement of investment operations) through December 31, 2003, for Preferred Opportunity were as follows:

Shares from
   
   
    Initial    Underwriters’ Exercising    Reinvestment    Net Increase in 
Trust    Public Offering    the Over-allotment Option    of Dividends    Shares Outstanding 





Global    23,006,021   
475,000 
      23,481,021 
Preferred Opportunity    16,304,817   
2,000,000 
  960    18,305,777 

     During the period February 28, 2003, (commencement of investment operations) through December 31, 2003, Preferred Opportunity issued 960 common shares, under the terms of its Dividend Reinvestment Plan. During the period ended December 31, 2004, there were no additional shares issued under the terms of the Trusts’ Dividend Reinvestment Plans.

     Offering costs of $924,000 ($0.04 per common share) and $900,000 ($0.05 per common share) incurred in connection with Global’s and Preferred Opportunity’s offering of common shares, respectively, have been charged to paid-in capital in excess of par of the common shares.

     As of December 31, 2004, Global and Preferred Opportunity have the following series of preferred shares outstanding as listed in the table below. The preferred shares have a liquidation value of $25,000 per share plus any accumulated unpaid dividends.

Trust    Series    Shares    Trust    Series    Shares 



 


Global    T7    3,246      Preferred Opportunity    T7    2,944   
    W7    3,246          W7    2,944   
    R7    3,246          R7    2,944   

     Underwriting discounts of $2,434,500 ($0.10 per common share) and $2,208,000 ($0.12 per common share) and offering costs of $400,260 ($0.02 per common share) and $389,000 ($0.02 per common share) incurred in connection with the preferred share offering of Global and Preferred Opportunity, respectively, have been charged to paid-in capital in excess of par of the common shares.

     Dividends on seven-day preferred shares are cumulative at a rate which is reset every seven days based on the results of an auction. The dividend range on the preferred shares for Global and Preferred Opportunity for the period ended December 31, 2004, was 0.98% to 2.66%, and 1.90% to 2.67%, respectively.

     Global and Preferred Opportunity may not declare dividends or make other distributions on common shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding preferred shares and any other borrowings would be less than 200%. The preferred shares are redeemable at the option of Global and Preferred Opportunity, in whole or in part, on any dividend payment date at $25,000 per share plus any accumulated or unpaid dividends whether or not declared. The preferred shares are also subject to mandatory redemption at $25,000 per share plus any accumulated or unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of Global and Preferred Opportunity, as set forth in Global’s and Preferred Opportunity’s Declaration of Trust, are not satisfied. The holders of preferred shares have voting rights equal to the holders of common shares (one vote per share) and will vote together with holders of common shares as a single class. However, holders of preferred shares, voting as a separate class, are also entitled to elect two Trustees for Global and Preferred Opportunity. In addition, the Investment Company Act of 1940, as amended, requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding preferred shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the preferred shares, (b) change a Trust’s sub-classification as a closed-end investment company or change its fundamental investment restrictions and (c) change the nature of its business so as to cease to be an investment company.

Note 7. Dividends

     Subsequent to December 31, 2004, each Board declared dividends from undistributed earnings per common share payable January 31, 2005, to shareholders of record on January 15, 2005. The per share common dividends declared were as follows:

  Common Dividend   
Trust  Per Share   



 
Advantage  $ 0.058333   
Global  0.093300   
Preferred Opportunity  0.166667   

     The dividends declared on preferred shares for the period January 1, 2005, to January 31, 2005, for Global and Preferred Opportunity were as follows:

        Dividends            Dividends 
Trust    Series    Declared    Trust    Series    Declared 






Global    T7    $142,629      Preferred Opportunity    T7    $130,301   
    W7    142,499          W7    129,153   
    R7    138,052          R7    128,682   

33


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Directors/Trustees and Shareholders of:
     BlackRock Advantage Term Trust Inc.
     BlackRock Global Floating Rate Income Trust
     BlackRock Preferred Opportunity Trust

     We have audited the accompanying statements of assets and liabilities of BlackRock Advantage Term Trust Inc., BlackRock Global Floating Rate Income Trust and BlackRock Preferred Opportunity Trust (collectively, the “Trusts”), including the portfolios of investments, as of December 31, 2004, and the related statements of operations and cash flows for the periods then ended, the statements of changes in net assets for each of the periods then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2004, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Trusts as of December 31, 2004, the results of their operations and their cash flows for the periods then ended, and the changes in their net assets for each of the periods then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP


Boston, Massachusetts
February 28, 2005

34


DIRECTORS/TRUSTEES INFORMATION (Unaudited) 


                        Events or transactions by 
                Number of        reason of which the Trustee 
         Term of office        portfolios over-     Other Directorships    is an interested person as 
     Current positions    and length of time    Principal occupations    seen within the    held outside the    defined in Section 2(a) 
Name, address, age    held with the Trusts    served    during the past five years    fund complex1    fund complex1    (19) of the 1940 Act 

Interested Directors/Trustees2

Ralph L.    Chairman of the    3 years4 / since    Director since 1999 and President of    62    Member of the    Director and President of 
Schlosstein    Board3    inception    BlackRock, Inc. since its formation        Visiting Board of    the Advisor 
BlackRock, Inc.            in 1998 and of BlackRock, Inc.’s        Overseers of the John     
40 East 52nd Street            predecessor entities since 1988.        F. Kennedy School of     
New York, NY            Member of the Management        Government at     
10022            Committee and Investment Strategy        Harvard University, a     
Age: 53            Group of BlackRock, Inc. Formerly,        member of the board     
            Managing Director of Lehman        of the Financial     
            Brothers, Inc. and Co-head of its        Institutions Center of     
            Mortgage and Savings Institutions        The Wharton School     
            Group. Chairman and President of        of the University of     
            the BlackRock Liquidity Funds and        Pennsylvania, a     
            Director of several of BlackRock’s        trustee of the     
            alternative investment vehicles.        American Museum of     
                    Natural History, a     
                    trustee of Trinity     
                    School in New York     
                    City, a member of the     
                    Board of Advisors of     
                    Marujupu LLC, and a     
                    trustee of New     
                    Visions for Public     
                    Education and of The     
                    Public Theater in New     
                    York City. Formerly, a     
                    director of Pulte     
                    Corporation, the     
                    nation’s largest home-     
                    builder, a Trustee of     
                    Denison University     
                    and a member of     
                    Fannie Mae’s     
                    Advisory Council.     

Robert S. Kapito    President and    3 years4 / since    Vice Chairman of BlackRock, Inc.    52    Chairman of the    Director and Vice 
BlackRock, Inc.    Trustee    August 22,    Head of the Portfolio Management        Hope and Heroes    Chairman of the Advisor 
40 East 52nd Street        2002    Group. Also a member of the        Children’s Cancer     
New York, NY            Management Committee, the        Fund. President of     
10022            Investment Strategy Group, the Fixed        the Board of     
Age: 48            Income and Global Operating        Directors of the     
            Committees and the Equity        Periwinkle National     
            Investment Strategy Group.        Theatre for Young     
            Responsible for the portfolio man-        Audiences. Director     
            agement of the Fixed Income,        of icruise.com, Corp.     
            Domestic Equity and International             
            Equity, Liquidity, and Alternative             
            Investment Groups of BlackRock.             


35


 

DIRECTORS/TRUSTEES INFORMATION (Unaudited)  (Continued)

 


                Number of portfo-     
                lios overseen     
     Current positions held     Term of office and    Principal occupations    within the fund    Other Directorships held out- 
Name, address, age    with the Trusts    length of time served    during the past five years    complex1    side the fund complex 

Independent Trustees

Andrew F. Brimmer    Lead Trustee    3 years4 / since       President of Brimmer & Company, Inc., a    52    Director of CarrAmerica 
P.O. Box 4546    Audit Committee    inception       Washington, D.C.-based economic and        Realty Corporation and 
New York, NY    Chairman5           financial consulting firm, also Wilmer D.        Borg-Warner Automotive. 
10163-4546               Barrett Professor of Economics, University        Formerly Director of 
Age: 78               of Massachusetts – Amherst. Formerly        Airborne Express, 
               member of the Board of Governors of the        BankAmerica 
               Federal Reserve System. Former        Corporation (Bank of 
               Chairman, District of Columbia Financial        America), BellSouth 
               Control Board.        Corporation, College 
                    Retirement Equities Fund 
                    (Trustee), Commodity 
                    Exchange, Inc. (Public 
                    Governor), Connecticut 
                    Mutual Life Insurance 
                    Company, E.I. du Pont de 
                    Nemours & Company, 
                    Equitable Life Assurance 
                    Society of the United 
                    States, Gannett Company, 
                    Mercedes-Benz of North 
                    America, MNC Financial 
                    Corporation (American 
                    Security Bank), NCM 
                    Capital Management, 
                    Navistar International 
                    Corporation, PHH Corp. 
                    and UAL Corporation 
                    (United Airlines). 

Richard E. Cavanagh    Trustee    3 years4 / since     President and Chief Executive Officer of    52    Trustee: Aircraft Finance 
P.O. Box 4546    Audit Committee    inception6     The Conference Board, Inc., a leading        Trust (AFT) and 
New York, NY    Member         global business research organization, from        Educational Testing 
10163-4546             1995-present. Former Executive Dean of        Service (ETS). Director, 
Age: 58             the John F. Kennedy School of Government        Arch Chemicals, Fremont 
             at Harvard University from 1988-1995.        Group and The Guardian 
             Acting Director, Harvard Center for        Life Insurance Company 
             Business and Government (1991-1993).        of America. 
             Formerly Partner (principal) of McKinsey         
             & Company, Inc. (1980-1988). Former         
             Executive Director of Federal Cash         
             Management, White House Office of         
             Management and Budget (1977-1979). Co-         
             author, THE WINNING PERFORMANCE         
             (best selling management book published in         
              13 national editions).        

Kent Dixon    Trustee    3 years4 / since     Consultant/Investor. Former President and    52    Former Director of ISFA 
P.O. Box 4546    Audit Committee    inception     Chief Executive Officer of Empire Federal        (the owner of INVEST, a 
New York, NY    Member5         Savings Bank of America and Banc PLUS        national securities broker- 
10163-4546             Savings Association, former Chairman of        age service designed for 
Age:  67             the Board, President and Chief Executive        banks and thrift 
             Officer of Northeast Savings.        institutions). 

Frank J. Fabozzi    Trustee    3 years4 / since     Consultant. Editor of THE JOURNAL OF    52    Director, Guardian 
P.O. Box 4546    Audit Committee    inception     PORTFOLIO MANAGEMENT and        Mutual Funds Group (18 
New York, NY    Member7         Frederick Frank Adjunct Professor of        portfolios). 
10163-4546             Finance at the School of Management at         
Age: 56             Yale University. Author and editor of sev-         
             eral books on fixed income portfolio man-         
             agement. Visiting Professor of Finance and         
             Accounting at the Sloan School of         
             Management, Massachusetts Institute of         
             Technology from 1986 to August 1992.         


36


 

DIRECTORS/TRUSTEES INFORMATION (Unaudited)  (Continued)

 

                Number of     
                portfolios     
                overseen     
                within     
     Current positions held     Term of office and    Principal occupations    the fund    Other Directorships held outside 
Name, address, age      with the Trusts    length of time served    during the past five years    complex1    the fund complex 

Independent Trustees (continued)

Kathleen F. Feldstein    Trustee / Advisory    3 years4 / since    President of Economics Studies, Inc., a    199    Director of BellSouth Inc., 
P.O. Box 4546    Trustee8    January 19, 2005    Belmont, MA-based private economic        Ionics, Inc., and Knight 
New York, NY            consulting firm, since 1987; Chair, Board        Ridder, Inc.; Trustee of the 
10163-4546            of Trustees, McLean Hospital in Belmont,        Museum of Fine Arts, 
Age: 63            MA.        Boston, and of the 
                    Committee for Economic 
                    Development; Corporation 
                    Member, Partners HealthCare 
                    and Sherrill House; Member 
                    of the Visiting Committee of 
                    the Harvard University Art 
                    Museums and of the 
                    Advisory Board to the 
                    International School of 
                    Business at Brandeis 
                    University. 

R. Glenn Hubbard    Trustee    3 years4 / since    Dean of Columbia Business School since    52    Director of ADP, Dex Media, 
P.O. Box 4546        November 16, 2004    July 1, 2004. Columbia faculty member        KKR Financial Corporation, 
New York, NY            since 1988. Co-director of Columbia        and Ripplewood Holdings. 
10163-4546            Business School’s Entrepreneurship Program        Member of Board of 
Age:  46            1994-1997. Visiting professor at the John F.        Directors of Duke Realty. 
            Kennedy School of Government at Harvard        Formerly on the advisory 
            and the Harvard Business School, as well as        boards of the Congressional 
            the University of Chicago. Visiting scholar at        Budget Office, the Council 
            the American Enterprise Institute in        on Competitiveness, the 
            Washington and member of International        American Council on Capital 
            Advisory Board of the MBA Program of        Formation, the Tax 
            Ben-Gurion University. Deputy assistant sec-        Foundation and the Center 
            retary of the U.S. Treasury Department for        for Addiction and Substance 
            Tax Policy 1991-1993. Chairman of the U.S.        Abuse. Trustee of Fifth 
            Council of Economic Advisers under the        Avenue Presbyterian Church 
            President of the United States 2001–2003.        of New York. 

James Clayburn    Trustee    3 years4 / since    Dean Emeritus of the John E. Anderson    52    Director of Payden & Rygel 
La Force, Jr.        inception10    Graduate School of Management,        Investment Trust, Metzler- 
P.O. Box 4546            University of California since July 1, 1993.        Payden Investment Trust, 
New York, NY            Acting Dean of the School of Business,        Advisors Series Trust, Arena 
10163-4546            Hong Kong University of Science and        Pharmaceuticals, Inc. and 
Age:  76            Technology 1990-1993. From 1978 to        CancerVax Corporation. 
            September 1993, Dean of the John E.         
            Anderson Graduate School of         
            Management, University of California.         

Walter F. Mondale    Trustee    3 years4 / since    Senior Counsel, Dorsey & Whitney, LLP, a    52    Chairman of Panasonic 
P.O. Box 4546        inception11    law firm (January 2004-present); Partner,        Foundation’s Board of 
New York, NY            Dorsey & Whitney, LLP, (December 1996-        Directors and Director of 
10163-4546            December 2003, September 1987-August        United Health Foundation. 
Age:  77            1993). Formerly U.S. Ambassador to Japan        Member of the Hubert H. 
            (1993-1996). Formerly Vice President of        Humphrey Institute of Public 
            the United States, U.S. Senator and        Affairs Advisory Board, The 
            Attorney General of the State of        Mike and Maureen Mans- 
            Minnesota. 1984 Democratic Nominee for        field Foundation and the 
            President of the United States.        Dean’s Board of Visitors of 
                    the Medical School at the 
                    University of Minnesota. 



1      The Fund Complex means two or more registered investments companies that: (1) hold themselves out to investors as related companies for pur- poses of investment and investor services; or (2) have a common investment advisor or have an investment advisor that is an affiliated person of the investment advisor of any of the other registered investment companies.
2      Interested Director/Trustee as defined by Section 2(a)(19) of the Investment Company Act of 1940.
3      Director/Trustee since inception; appointed Chairman of the Board on August 22, 2002.
4      The Board is classified into three classes of which one class is elected annually. Each Director/Trustee serves a three-year term concurrent with the class from which they are elected.
5      The Board of each Trust has determined that each Trust has two Audit Committee financial experts serving on its Audit Committee, Dr. Brimmer and Mr. Dixon, both of whom are independent for the purpose of the definition of Audit Committee financial expert as applicable to the Trusts.
6      For Advantage appointed Director on August 11, 1994.
7      Appointed Audit Committee Member on May 25, 2004.
8      Trustee on Advantage and an Advisory Trustee on Preferred Opportunity and Global.
9      Director/Trustee on 19 of the closed-end Trusts and an Advisory Director/Trustee on the remaining 33 closed-end Trusts.
10      For Advantage appointed Director on June 19, 1992.
11      Except during the periods August 12, 1993 through April 15, 1997 and October 31, 2002 through November 11, 2002 for Advantage.

37


DIVIDEND REINVESTMENT PLANS


     Pursuant to each Trust’s respective Dividend Reinvestment Plan (the “Plan”), shareholders of Advantage and Global may elect, while shareholders of Preferred Opportunity are automatically enrolled, to have all distributions of dividends and capital gains reinvested by EquiServe Trust Company, N.A. (the “Plan Agent”) in the respective Trust’s shares pursuant to the Plan. Shareholders who do not participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, which serves as agent for the shareholders in administering the Plan.

     After Advantage and/or Global declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account, by the purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open market purchases”). These Trusts will not issue any new shares under the Plan.

     After Preferred Opportunity declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by open market purchases. If, on the dividend payment date, the NAV is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend payment date, the NAV is greater than the market value per share plus estimated brokerage commissions (such condition being referred to herein as “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases.

     Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.

     The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any Federal income tax that may be payable on such dividends or distributions.

     Each Trust reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, each Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants that request a sale of shares through the Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commisson. All correspondence concerning the Plan should be directed to the Plan Agent at 250 Royall Street, Canton, MA 02021 or (800) 699-1BFM.

ADDITIONAL INFORMATION


     On August 25, 2004, BlackRock, Inc., the parent of BlackRock Advisors, Inc., the Trusts’ investment advisor, entered into an agreement with MetLife, Inc.® to acquire SSRM Holdings, Inc., the parent of State Street Research & Management Company, the investment advisor to the State Street Research mutual funds. This acquisition was completed on January 31, 2005. Management believes there will be no impact to the Trusts as a result of this transaction.

     Each Trust listed for trading on the New York Stock Exchange (NYSE) has filed with the NYSE its chief executive officer certification regarding compliance with the NYSE’s listing standards and has filed with the Securities and Exchange Commission the certification of its chief executive officer and chief financial officer required by Section 302 of the Sarbanes-Oxley Act.

     There have been no material changes in the Trusts’ investment objectives or policies that have not been approved by the shareholders or to their charters or by-laws or in the principal risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolios.

     Quarterly performance and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com/indiv/products/closedendfunds/funds.html. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended, to incorporate BlackRock’s website into this report.

     Certain of the officers of the Trusts listed on the inside back cover of this Report to Shareholders are also officers of the Advisor or Sub-Advisor. They serve in the following capacities for the Advisor or Sub-Advisor; Robert S. Kapito—Director and Vice Chairman of the Advisor and the Sub-Advisor, Henry Gabbay, Anne Ackerley and Bartholomew Battista—Managing Directors of the Advisor and the Sub-Advisor, Richard M. Shea, James Kong and Vincent B. Tritto—Managing Directors of the Sub-Advisor, and Brian P. Kindelan—Managing Director of the Advisor.

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BlackRock Closed-End Funds

 

Directors/Trustees
   
Ralph L. Schlosstein, Chairman
    Andrew F. Brimmer
    Richard E. Cavanagh
    Kent Dixon
    Frank J. Fabozzi
    Kathleen F. Feldstein
1
    R. Glenn Hubbard
3
    Robert S. Kapito
    James Clayburn La Force, Jr.
    Walter F. Mondale

Officers
   
Robert S. Kapito,President
   
Henry Gabbay, Treasurer
   
Bartholomew Battista, Chief Compliance Officer
   
Anne Ackerley, Vice President
   
Richard M. Shea, Vice President/Tax
   
James Kong, Assistant Treasurer
   
Vincent B. Tritto, Secretary
   
Brian P. Kindelan, Assistant Secretary

Investment Advisor
   
BlackRock Advisors, Inc.
    100 Bellevue Parkway
    Wilmington, DE 19809
    (800) 227-7BFM

Sub-Advisor2
   
BlackRock Financial Management, Inc.
    40 East 52nd Street
    New York, NY 10022

Accounting Agent and Custodian
   
State Street Bank and Trust Company
    225 Franklin Street
    Boston, MA 02110

 

Transfer Agent
   
EquiServe Trust Company, N.A.
    250 Royall Street
    Canton, MA 02021
    (800) 699-1BFM

Auction Agent2
   
Bank of New York
    101 Barclay Street, 7 West
    New York, NY 10286

Independent Registered Public Accounting Firm
   
Deloitte & Touche LLP
    200 Berkeley Street
    Boston, MA 02116

Legal Counsel
   
Skadden, Arps, Slate, Meagher & Flom LLP
    Four Times Square
    New York, NY 10036

Legal Counsel – Independent Trustees
   
Debevoise & Plimpton LLP
    919 Third Avenue
    New York, NY 10022

     This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Trust shares. Statements and other information contained in this report are as dated and are subject to change.

BlackRock Closed-End Funds
c/o BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM


1 Trustee for Advantage only. Advisory Trustee for Global and Preferred Opportunity. Appointed on January 19, 2005 for each trust.

2 For Global and Preferred Opportunity.

3 Appointed on November 16, 2004.

The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Trusts at (800)669-1BFM.

The Trusts have delegated to the Advisor the voting of proxies relating to their voting securities pursuant to the Advisor’s proxy voting policies and procedures. You may obtain a copy of these proxy voting policies and procedures, without charge, by calling (800) 699-1BFM. These policies and procedures are also available on the website of the Securities and Exchange Commission (the “Commission”) at http://www.sec.gov.

Information on how proxies relating to the Trusts’ voting securities were voted (if any) by the Advisor during the most recent 12-month period ended December 31st is available, upon request, by calling (800) 699-1BFM or on the website of the Commission at http://www.sec.gov.

The Trusts file their complete schedule of portfolio holdings for the first and third quarters of their respective fiscal years with the Commission on Form N-Q. Each Trust’s Form N-Q will be available on the Commission’s website at http://www.sec.gov. Each Trust’s Form N-Q, when available, may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information regarding the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Form N-Q, when available, may also be obtained, upon request, by calling (800) 699-1BFM.


 

 

 

 

This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Trust shares. Statements and other information contained in this report are as dated and are subject to change.  
   
CEF-ANN-5

 


Item 2. Code of Ethics.
(a)      The Registrant has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

(b)      Not applicable.

(c)      The Registrant has not amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.

(d)      The Registrant has not granted a waiver or an implicit waiver from a provision of its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.

(e)      Not applicable.

(f)      The Registrant's Code of Ethics is attached as an Exhibit hereto.

Item 3. Audit Committee Financial Expert.
The Registrant's Board of Trustees has determined that it has two audit committee financial experts serving on its audit committee, each of whom is an "independent" Trustee: Dr. Andrew F. Brimmer and Mr. Kent Dixon. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services.
(a)       Audit Fees.      The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $84,300 for the fiscal year ended December 31, 2004 and $0 for the fiscal year ended December 31, 2003.

(b)       Audit-Related Fees.       The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not


reported above in Item 4(a) were $0 for the fiscal year ended December 31, 2004 and $0 for the fiscal year ended December 31, 2003. The nature of these services was attest services not required by statute or regulation, overhead and out-of-pocket expenses.

(c)       Tax Fees.      The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were $0 for the fiscal year ended December 31, 2004 and $0 for the fiscal year ended December 31, 2003. The nature of these services was federal, state and local income and excise tax return preparation and related advice and planning and miscellaneous tax advice.

(d)       All Other Fees.       There were no fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above in Items 4(a) through (c).

(e)       Audit Committee Pre-Approval Policies and Procedures.       
           (1) The Registrant has polices and procedures (the "Policy") for the pre-approval by the Registrant's Audit Committee of Audit, Audit-Related, Tax and Other Services (as each is defined in the Policy) provided by the Trust's independent auditor (the "Independent Auditor") to the Registrant and other "Covered Entities" (as defined below). The term of any such pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The amount of any such pre-approval is set forth in the appendices to the Policy (the "Service Pre-Approval Documents"). At its first meeting of each calendar year, the Audit Committee will review and re-approve the Policy and approve or re-approve the Service Pre-Approval Documents for that year, together with any changes deemed necessary or desirable by the Audit Committee. The Audit Committee may, from time to time, modify the nature of the services pre-approved, the aggregate level of fees pre-approved or both.

           For the purposes of the Policy, "Covered Services" means (A) all engagements for audit and non-audit services to be provided by the Independent Auditor to the Trust and (B) all engagements for non-audit services related directly to the operations and financial reporting or the Trust to be provided by the Independent Auditor to any Covered Entity, "Covered Entities" means (1) the Advisor or (2) any entity controlling, controlled by or under common control with the Advisor that provides ongoing services to the Trust.

           In the intervals between the scheduled meetings of the Audit Committee, the Audit Committee delegates pre-approval authority under this Policy to the Chairman of the Audit Committee (the "Chairman"). The Chairman shall report any pre-approval decisions under this Policy to the Audit Committee at its next scheduled meeting. At each scheduled meeting, the Audit Committee will review with the Independent Auditor the Covered Services pre-approved by the Chairman pursuant to delegated authority, if any, and the fees related thereto. Based on these reviews, the Audit Committee can modify, at its discretion, the pre-approval originally granted by the Chairman pursuant to delegated authority. This modification can be to the nature of services pre-approved, the aggregate level of fees approved, or both. Pre-approval of Covered Services by the Chairman pursuant to delegated authority is expected to be the exception rather than the rule and the

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Audit Committee may modify or withdraw this delegated authority at any time the Audit Committee determines that it is appropriate to do so.

           Fee levels for all Covered Services to be provided by the Independent Auditor and pre-approved under this Policy will be established annually by the Audit Committee and set forth in the Service Pre-Approval Documents. Any increase in pre-approved fee levels will require specific pre-approval by the Audit Committee (or the Chairman pursuant to delegated authority).

     The terms and fees of the annual Audit services engagement for the Trust are subject to the specific pre-approval of the Audit Committee. The Audit Committee (or the Chairman pursuant to delegated authority) will approve, if necessary, any changes in terms, conditions or fees resulting from changes in audit scope, Trust structure or other matters.

           In addition to the annual Audit services engagement specifically approved by the Audit Committee, any other Audit services for the Trust not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the Audit Committee (or the Chairman pursuant to delegated authority).

           Audit-Related services are assurance and related services that are not required for the audit, but are reasonably related to the performance of the audit or review of the financial statements of the Registrant and, to the extent they are Covered Services, the other Covered Entities (as defined