UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

 

Investment Company Act file number 811-21566

 

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

 

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

 

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

 

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

 

Date of fiscal year end: 10/31/2012

 

Date of reporting period: 04/30/2012

 

Item 1 – Report to Stockholders

 

 
 

April 30, 2012


Semi-Annual Report (Unaudited)

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

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

4BlackRock Credit Allocation Income Trust III (BPP)

4BlackRock Credit Allocation Income Trust IV (BTZ)

4BlackRock Floating Rate Income Trust (BGT)

Not FDIC Insured • No Bank Guarantee • May Lose Value

 
 

Table of Contents

  Page
Dear Shareholder 3
Semi-Annual Report:  
Fund Summaries 4
The Benefits and Risks of Leveraging 14
Derivative Financial Instruments 15
Financial Statements:  
Schedules of Investments 16
Statements of Assets and Liabilities 55
Statements of Operations 56
Statements of Changes in Net Assets 57
Statements of Cash Flows 60
Financial Highlights 61
Notes to Financial Statements 66
Officers and Directors 78
Additional Information 79

2SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Dear Shareholder

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

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

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

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

Sincerely,

Rob Kapito

President, BlackRock Advisors, LLC


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

Rob Kapito

President, BlackRock Advisors, LLC

Total Returns as of April 30, 2012

  6-month 12-month
 
US large cap equities 12.77 % 4.76 %
(S&P 500® Index)        
 
US small cap equities 11.02   (4.25 )
(Russell 2000® Index)        
 
International equities 2.44   (12.82 )
(MSCI Europe, Australasia,        
Far East Index)        
 
Emerging market 3.93   (12.61 )
equities (MSCI Emerging        
Markets Index)        
 
3-month Treasury 0.01   0.05  
bill (BofA Merrill Lynch        
3-Month Treasury        
Bill Index)        
 
US Treasury securities 3.83   16.41  
(BofA Merrill Lynch 10-        
Year US Treasury Index)        
 
US investment grade 2.44   7.54  
bonds (Barclays US        
Aggregate Bond Index)        
 
Tax-exempt municipal 5.71   11.90  
bonds (S&P Municipal        
Bond Index)        
 
US high yield bonds 6.91   5.89  
(Barclays US Corporate        
High Yield 2% Issuer        
Capped Index)        

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


 THIS PAGE NOT PART OF YOUR FUND REPORT3
 

Fund Summary as of April 30, 2012 BlackRock Credit Allocation Income Trust I, Inc.

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

For the six months ended April 30, 2012, the Fund returned 13.41% based on market price and 7.14% based on net asset value (“NAV”). For the same period, the closed-end Lipper Corporate Debt Funds (BBB-Rated) category posted an average return of 8.46% based on market price and 5.24% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

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

Describe recent portfolio activity.

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

Describe portfolio positioning at period end.

European sovereign debt fears have once again resurfaced and macro risks remain a key driver of market volatility. As of period end, the Fund seeks to maintain a near-term short duration bias and remains cautiously optimistic on corporate credit.
The Fund maintained diversified exposure across investment grade and high yield corporate credits. Portfolio holdings at period end reflected a bias toward higher-quality issues and a preference for more stable industries and companies that offer good cash flows, earnings and revenue visibility and attractive downside protection. The Fund’s corporate credit holdings reflect a bias toward utilities over financials and industrials. The Fund favors media cable and media non-cable names as well as insurance companies.

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

4SEMI-ANNUAL REPORTAPRIL 30, 2012
 

BlackRock Credit Allocation Income Trust I, Inc.

Fund Information  
Symbol on New York Stock Exchange (“NYSE”) PSW
Initial Offering Date August 1, 2003
Yield on Closing Market Price as of April 30, 2012 ($10.08)1 7.08%
Current Monthly Distribution per Common Share2 $0.0595
Current Annualized Distribution per Common Share2 $0.7140
Economic Leverage as of April 30, 20123 28%

1Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2The distribution rate is not constant and is subject to change.
3Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14.

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

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

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

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

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

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

Fund Summary as of April 30, 2012 BlackRock Credit Allocation Income Trust II, Inc.

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

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

What factors influenced performance?

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

Describe recent portfolio activity.

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

Describe portfolio positioning at period end.

European sovereign debt fears have once again resurfaced and macro risks remain a key driver of market volatility. As of period end, the Fund seeks to maintain a near-term short duration bias and remains cautiously optimistic on corporate credit.
The Fund maintained diversified exposure across investment grade and high yield corporate credits. Portfolio holdings at period end reflected a bias toward higher-quality issues and a preference for more stable industries and companies that offer good cash flows, earnings and revenue visibility and attractive downside protection. The Fund’s corporate credit holdings reflect a bias toward utilities over financials and industrials. The Fund favors media cable and media non-cable names as well as insurance companies.

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

6SEMI-ANNUAL REPORTAPRIL 30, 2012
 

BlackRock Credit Allocation Income Trust II, Inc.

Fund Information  
Symbol on NYSE PSY
Initial Offering Date March 28, 2003
Yield on Closing Market Price as of April 30, 2012 ($10.79)1 6.78%
Current Monthly Distribution per Common Share2 $0.061
Current Annualized Distribution per Common Share2 $0.732
Economic Leverage as of April 30, 20123 27%

1Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2The distribution rate is not constant and is subject to change.
3Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14.

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

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

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

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

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

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

Fund Summary as of April 30, 2012 BlackRock Credit Allocation Income Trust III

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

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

What factors influenced performance?

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

Describe recent portfolio activity.

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

Describe portfolio positioning at period end.

European sovereign debt fears have once again resurfaced and macro risks remain a key driver of market volatility. As of period end, the Fund seeks to maintain a near-term short duration bias and remains cautiously optimistic on corporate credit.
The Fund maintained diversified exposure across investment grade and high yield corporate credits. Portfolio holdings at period end reflected a bias toward higher-quality issues and a preference for more stable industries and companies that offer good cash flows, earnings and revenue visibility and attractive downside protection. The Fund’s corporate credit holdings reflect a bias toward utilities over financials and industrials. The Fund favors media cable and media non-cable names as well as insurance companies.

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

8SEMI-ANNUAL REPORTAPRIL 30, 2012
 

BlackRock Credit Allocation Income Trust III

Fund Information  
Symbol on NYSE BPP
Initial Offering Date February 28, 2003
Yield on Closing Market Price as of April 30, 2012 ($11.43)1 6.67%
Current Monthly Distribution per Common Share2 $0.0635
Current Annualized Distribution per Common Share2 $0.7620
Economic Leverage as of April 30, 20123 24%

1Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2The distribution rate is not constant and is subject to change.
3Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14.

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

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

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

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

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

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

Fund Summary as of April 30, 2012 BlackRock Credit Allocation Income Trust IV

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

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

What factors influenced performance?

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

Describe recent portfolio activity.

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

Describe portfolio positioning at period end.

European sovereign debt fears have once again resurfaced and macro risks remain a key driver of market volatility. As of period end, the Fund seeks to maintain a near-term short duration bias and remains cautiously optimistic on corporate credit.
The Fund maintained diversified exposure across investment grade and high yield corporate credits. Portfolio holdings at period end reflected a bias toward higher-quality issues and a preference for more stable industries and companies that offer good cash flows, earnings and revenue visibility and attractive downside protection. The Fund’s corporate credit holdings reflect a bias toward utilities over financials and industrials. The Fund favors media cable and media non-cable names as well as insurance companies.

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

10SEMI-ANNUAL REPORTAPRIL 30, 2012
 

BlackRock Credit Allocation Income Trust IV

Fund Information  
Symbol on NYSE BTZ
Initial Offering Date December 27, 2006
Yield on Closing Market Price as of April 30, 2012 ($13.26)1 7.10%
Current Monthly Distribution per Common Share2 $0.0785
Current Annualized Distribution per Common Share2 $0.9420
Economic Leverage as of April 30, 20123 27%

1Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2The distribution rate is not constant and is subject to change.
3Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14.

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

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

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

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

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

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

Fund Summary as of April 30, 2012 BlackRock Floating Rate Income Trust

Fund Overview

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

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

Portfolio Management Commentary

How did the Fund perform?

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

What factors influenced performance?

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

Describe recent portfolio activity.

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

Describe portfolio positioning at period end.

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

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

12SEMI-ANNUAL REPORTAPRIL 30, 2012
 

BlackRock Floating Rate Income Trust

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

1Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2The distribution rate is not constant and is subject to change.
3Represents the loan outstanding as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 14.

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

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

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

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

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

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

SEMI-ANNUAL REPORTAPRIL 30, 201213
 

The Benefits and Risks of Leveraging

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

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

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

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

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

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

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

Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Funds are permitted to issue senior securities representing indebtedness up to 331/3% of their total managed assets (each Fund’s net assets plus the proceeds of any outstanding borrowings used for leverage). If the Funds segregate liquid assets having a value not less than the repurchase price (including accrued interest), a reverse repurchase agreement will not be considered a senior security and therefore will not be subject to this limitation. Each Fund, however, voluntarily limits its aggregate economic leverage to 50% of its managed assets. As of April 30, 2012, the Funds had aggregate economic leverage from reverse repurchase agreements and/or borrowings through a credit facility as a percentage of their total managed assets as follows:

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

14SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Derivative Financial Instruments

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

SEMI-ANNUAL REPORTAPRIL 30, 201215
 

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

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

Portfolio Abbreviations

To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list: CAD Canadian Dollar GBP British Pound
CHF Swiss Franc LIBOR London InterBank Offered Rate
EUR Euro RB Revenue Bonds
FKA Formerly Known As USD US Dollar

See Notes to Financial Statements.

16SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

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

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

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201217
 

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

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

See Notes to Financial Statements.

18SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

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

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201219
 

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

Capital Trusts   Par
(000)
  Value
Insurance (concluded)        
Northwestern Mutual Life Insurance,        
6.06%, 3/30/40 (a)(c) USD 900   $ 1,072,333
Reinsurance Group of America, 6.75%, 12/15/65 (b)   700   647,712
Swiss Re Capital I LP, 6.85% (a)(b)(f)   450   413,844
ZFS Finance (USA) (a)(b):        
Trust II, 6.45%, 12/15/65   1,800   1,764,000
Trust IV, 5.88%, 5/09/62   146   146,182
        9,799,891
Multi-Utilities — 0.9%        
Dominion Resources Capital Trust I, 7.83%, 12/01/27   500   513,032
Dominion Resources, Inc., 7.50%, 6/30/66 (b)   500   532,500
        1,045,532
Oil, Gas & Consumable Fuels — 1.3%        
Enterprise Products Operating LLC, 8.38%, 8/01/66 (b)   825   895,125
TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b)   500   521,946
        1,417,071
Total Capital Trusts — 20.2%       22,602,601
 
Preferred Stocks   Shares    
Auto Components — 0.1%        
Dana Holding Corp., 4.00% (a)   1,000   125,375
Diversified Financial Services — 0.4%        
Ally Financial, Inc., 7.00% (a)   510   432,863
Thrifts & Mortgage Finance — 0.0%        
Fannie Mae, Series S, 8.25% (b)(g)   3,000   3,690
Freddie Mac, Series Z, 8.38% (b)(g)   3,000   3,750
        7,440
Wireless Telecommunication Services — 2.9%        
Centaur Funding Corp., 9.08% (a)   2,720   3,223,200
Total Preferred Stocks — 3.4%       3,788,878
 
Trust Preferreds — 0.3%
Diversified Financial Services — 0.3%        
GMAC Capital Trust I, Series 2, 8.13% (b)   13,680   321,770
Total Preferred Securities — 23.9%       26,713,249
       
Taxable Municipal Bonds — 0.9%   Par
(000)
   
Metropolitan Transportation Authority, RB,        
6.55%, 11/15/31 USD 800   981,208
 
US Government Sponsored
Agency Securities — 0.3%        
Agency Obligations — 0.3%        
Fannie Mae, 4.23%, 10/09/19 (c)(h)   390   314,003
         
US Treasury Obligations   Par
(000)
  Value
US Treasury Bonds (c):        
3.75%, 8/15/41 USD 236   $ 266,459
3.13%, 11/15/41   740   742,312
US Treasury Notes, 0.88%, 12/31/16 (c)   901   906,350
Total US Treasury Obligations — 1.7%       1,915,121
Total Long-Term Investments        
(Cost — $143,090,707) — 136.0%       151,909,873
 
Short-Term Securities   Shares    
BlackRock Liquidity Funds, TempFund,        
Institutional Class, 0.15% (i)(j)   621,268   621,268
Total Short-Term Securities        
(Cost — $621,268) — 0.6%       621,268
 
Options Purchased   Contracts    
Exchange-Traded Put Options — 0.0%        
S&P 500 Index, Strike Price USD 1,200.00,        
Expires 6/16/12   67   17,420
    Notional
Amount
(000)
   
Over-the-Counter Interest Rate Call Swaptions — 0.0%        
Receive a fixed rate of 2.40% and pay a floating rate        
based on 3-month LIBOR, expires 5/11/12,        
Broker Citibank NA USD 1,300   46
Receive a fixed rate of 2.61% and pay a floating rate        
based on 3-month LIBOR, expires 4/05/13,        
Broker Citibank NA   800   37,051
        37,097
Over-the-Counter Interest Rate Put Swaptions — 0.1%        
Receive a fixed rate of 2.61% and pay a floating rate        
based on 3-month LIBOR, expires 4/05/13,        
Broker Citibank NA   800   16,824
Pay a fixed rate of 4.50% and receive a floating rate        
based on 3-month LIBOR, Expires 9/16/13,        
Broker Credit Suisse Securities (USA) LLC EUR 1,300   6,516
Pay a fixed rate of 4.50% and receive a floating rate        
based on 3-month LIBOR, Expires 10/21/13,        
Broker Deutsche Bank AG   1,300   7,984
Pay a fixed rate of 4.50% and receive a floating rate        
based on 3-month LIBOR, Expires 12/12/13,        
Broker Credit Suisse Securities (USA) LLC   900   7,148
Pay a fixed rate of 4.50% and receive a floating rate        
based on 3-month LIBOR, Expires 2/02/17,        
Broker Deutsche Bank AG USD 1,200   40,277
        78,749
Total Options Purchased        
(Cost — $429,102) — 0.1%       133,266
Total Investments Before Options Written        
(Cost — $144,141,077) — 136.7%       152,664,407

See Notes to Financial Statements.

20SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

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

(a)Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.
(b)Variable rate security. Rate shown is as of report date.
(c)All or a portion of security has been pledged as collateral in connection with open reverse repurchase agreements.
(d)Represents a step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown is as of report date.
(e)Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(f)Security is perpetual in nature and has no stated maturity date.
(g)Non-income producing security.
(h)Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(i)Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate Shares
Held at
October 31,
2011
Net
Activity
Shares
Held at
April 30,
2012
Income
BlackRock Liquidity        
Funds, TempFund,        
Institutional Class 1,362,932 (741,664) 621,268 $ 926

(j)Represents the current yield as of report date.
For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Reverse repurchase agreements outstanding as of April 30, 2012 were as follows:
Counterparty Interest
Rate
Trade
Date
Maturity
Date
Net Closing
Amount
Face
Amount
Deutsche Bank AG (0.50)% 1/17/12 Open $ 107,168 $ 107,325
UBS Securities LLC (1.25)% 2/02/12 Open 122,508 122,887
Credit Suisse          
Securities          
(USA) LLC 0.35% 2/15/12 Open 950,524 949,823
Credit Suisse          
Securities          
(USA) LLC 0.35% 2/22/12 Open 1,052,581 1,051,875
UBS Securities LLC 0.35% 2/28/12 Open 2,509,536 2,508,000
UBS Securities LLC 0.38% 2/28/12 Open 2,609,046 2,607,312
Credit Suisse          
Securities          
(USA) LLC (0.25)% 3/07/12 Open 295,987 296,100
BNP Paribas          
Securities Corp. 0.35% 3/12/12 Open 1,354,083 1,353,425
UBS Securities LLC 0.32% 3/13/12 Open 544,737 544,500
UBS Securities LLC 0.38% 3/13/12 Open 602,937 602,625
Deutsche Bank AG 0.17% 3/14/12 Open 721,664 721,500
Credit Suisse          
Securities          
(USA) LLC 0.30% 3/21/12 Open 1,388,224 1,387,750
Credit Suisse          
Securities          
(USA) LLC 0.35% 3/21/12 Open 707,282 707,000
Credit Suisse          
Securities          
(USA) LLC 0.38% 3/21/12 Open 6,194,048 6,191,369
Barclays          
Capital, Inc. 0.35% 3/22/12 Open 662,870 662,613
UBS Securities LLC 0.35% 3/23/12 Open 92,415 92,380
Credit Suisse          
Securities          
(USA) LLC 0.35% 3/27/12 Open 332,607 332,494
Barclays          
Capital, Inc. (1.00)% 4/03/12 Open 147,195 147,309
UBS Securities LLC 0.10% 4/16/12 Open 174,007 174,000
Barclays          
Capital, Inc. 0.35% 4/18/12 Open 3,329,295 3,328,875
UBS Securities LLC 0.34% 4/23/12 Open 3,877,368 3,877,075
UBS Securities LLC 0.35% 4/23/12 Open 374,442 374,412
Credit Suisse          
Securities          
(USA) LLC 0.35% 4/23/12 Open 602,297 602,250
Deutsche Bank AG 0.00% 4/24/12 Open 53,400 53,400
Deutsche Bank AG 0.12% 4/24/12 Open 907,779 907,758
UBS Securities LLC 0.34% 4/24/12 Open 332,522 332,500
Barclays          
Capital, Inc. 0.35% 4/25/12 Open 1,351,579 1,351,500
BNP Paribas          
Securities Corp. 0.19% 4/25/12 Open 265,803 265,795
BNP Paribas          
Securities Corp. 0.23% 4/25/12 Open 311,037 311,025
BNP Paribas          
Securities Corp. 0.37% 4/25/12 Open 2,044,126 2,044,000
BNP Paribas          
Securities Corp. 0.35% 4/25/12 Open 250,015 250,000
UBS Securities LLC 0.25% 4/26/12 Open 246,008 246,000
UBS Securities LLC 0.35% 4/26/12 Open 1,263,936 1,263,875
UBS Securities LLC 0.38% 4/26/12 Open 6,808,960 6,808,600
Deutsche Bank AG 0.25% 4/26/12 Open 324,011 324,000
Total       $ 42,911,997 $ 42,901,352

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201221
 

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

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

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

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

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

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

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

1Using S&P’s rating.
2The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement.
Credit default swaps on traded indexes - sold protection outstanding as of April 30, 2012 were as follows:
Index Receive
Fixed

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

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

5Fund pays a fixed interest rate and receives floating rate.
6Fund pays a floating interest rate and receives fixed rate.
Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:
Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities
Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)
Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

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

See Notes to Financial Statements.

22SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

The following tables summarize the inputs used as of April 30, 2012 in determining the fair valuation of the Fund’s investments and derivative financial instruments:

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

1Derivative financial instruments are swaps, financial futures contracts, foreign currency exchange contracts and options. Swaps, financial futures contracts and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

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

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

2Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on investments still held at April 30, 2012 was $886,618.
3The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the period of the event or the change in circumstances that caused the transfer.

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

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

4Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on derivative financial instruments still held at April 30, 2012 was $(1,184).
5Issuances represent upfront cash received on certain derivative financial instruments.
6Settlements represent periodic contractual cash flows and/or cash flows to terminate certain derivative financial instruments.

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

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201223
 

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

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

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

See Notes to Financial Statements.

24SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

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

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

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201225
 

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

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

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

See Notes to Financial Statements.

26SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

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

Corporate Bonds   Par
(000)
  Value
Wireless Telecommunication Services (concluded)        
Cricket Communications, Inc., 7.75%, 5/15/16 USD 670   $ 705,175
Crown Castle International Corp., 9.00%, 1/15/15   890   983,450
Crown Castle Towers LLC (a):        
5.50%, 1/15/37   1,175   1,297,335
6.11%, 1/15/40   1,300   1,484,564
Nextel Communications, Inc., Series E, 6.88%, 10/31/13 840   840,000
SBA Tower Trust, 5.10%, 4/15/42 (a)   4,225   4,597,675
Sprint Capital Corp., 6.88%, 11/15/28   1,000   747,500
Sprint Nextel Corp. (a):        
9.00%, 11/15/18   1,860   2,048,325
7.00%, 3/01/20   2,670   2,723,400
        21,645,639
Total Corporate Bonds — 105.4%       502,236,345
 
Preferred Securities
Capital Trusts        
Capital Markets — 4.0%        
Ameriprise Financial, Inc., 7.52%, 6/01/66 (b)   2,500   2,650,000
State Street Capital Trust III, 5.46% (b)(f)   2,920   2,931,446
State Street Capital Trust IV, 1.47%, 6/01/37 (b)   18,235   13,569,995
        19,151,441
Commercial Banks — 5.5%        
Barclays Bank Plc, 7.43% (a)(b)(c)(f)   650   650,000
BNP Paribas, 7.20% (a)(b)(c)(f)   1,500   1,290,000
Credit Agricole SA, 8.38% (a)(b)(c)(f)   1,475   1,298,000
Dresdner Funding Trust I, 8.15%, 6/30/31 (a)   2,240   1,803,200
HSBC Capital Funding LP/Jersey Channel Islands,        
10.18% (a)(b)(c)(f)   4,835   6,285,500
M&T Capital Trust II, 8.28%, 6/01/27   3,630   3,702,600
National City Preferred Capital Trust I, 12.00% (b)(f)   1,100   1,170,840
NationsBank Capital Trust III, 1.02%, 1/15/27 (b)   13,470   10,111,848
        26,311,988
Diversified Financial Services — 1.4%        
JPMorgan Chase Capital XXIII, 1.50%, 5/15/47 (b)(c) 8,775   6,493,684
Electric Utilities — 0.6%        
PPL Capital Funding, 6.70%, 3/30/67 (b)   3,000   2,970,000
Insurance — 9.9%        
Ace Capital Trust II, 9.70%, 4/01/30   2,500   3,416,980
The Allstate Corp., 6.50%, 5/15/67 (b)   5,000   4,887,500
American General Capital II, 8.50%, 7/01/30   100   109,301
American International Group, Inc., 8.18%, 5/15/68 (b) 900   961,875
Aon Corp., 8.21%, 1/01/27   2,500   2,920,820
AXA SA, 6.38% (a)(b)(f)   3,000   2,385,000
Bank One Capital III, 8.75%, 9/01/30   2,000   2,790,000
Chubb Corp., 6.38%, 3/29/67 (b)   2,000   2,047,500
Farmers Exchange Capital, 7.05%, 7/15/28 (a)   2,500   2,767,230
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(b)   2,925   3,978,000
Lincoln National Corp., 7.00%, 5/17/66 (b)   3,350   3,249,500
MetLife, Inc., 6.40%, 12/15/66   3,325   3,252,561
Mitsui Sumitomo Insurance Co., Ltd.,        
7.00%, 3/15/72 (a)(b)   1,420   1,458,950
Northwestern Mutual Life Insurance,        
6.06%, 3/30/40 (a)(c)   3,800   4,527,628
Principal Life Insurance Co., 8.00%, 3/01/44 (a)   2,500   2,852,520
Reinsurance Group of America, 6.75%, 12/15/65 (b) 3,000   2,775,909
Swiss Re Solutions Holding Corp., 7.75%, 6/15/30 (c) 2,000   2,482,990
ZFS Finance (USA), Trust IV, 5.88%, 5/09/62 (a)(b)   379   379,474
        47,243,738
Multi-Utilities — 1.4%        
Dominion Resources Capital Trust I, 7.83%, 12/01/27 2,500   2,565,160
Dominion Resources, Inc., 7.50%, 6/30/66 (b)   3,900   4,153,500
        6,718,660

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201227
 

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

Capital Trusts   Par
(000)
  Value  
Oil, Gas & Consumable Fuels — 1.4%          
Enterprise Products Operating LLC, 8.38%, 8/01/66 (b) USD 2,000   $ 2,170,000  
TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b)   4,000   4,175,568  
        6,345,568  
Road & Rail — 0.8%          
BNSF Funding Trust I, 6.61%, 12/15/55 (b)   3,750   3,904,688  
Total Capital Trusts — 25.0%       119,139,767  
           
Preferred Stocks Shares
Auto Components — 0.1%          
Dana Holding Corp., 4.00% (a)   4,000   501,500  
Diversified Financial Services — 0.4%          
Ally Financial, Inc., 7.00% (a)   2,190   1,858,762  
Thrifts & Mortgage Finance — 0.0%          
Fannie Mae, Series S, 8.25% (b)(g)   14,000   17,220  
Freddie Mac, Series Z, 8.38% (b)(g)   14,000   17,500  
        34,720  
Wireless Telecommunication Services — 0.6%          
Centaur Funding Corp., 9.05% (a)   2,423   2,871,255  
Total Preferred Stocks — 1.1%       5,266,237  
           
Trust Preferreds — 0.3%
Diversified Financial Services — 0.3%          
GMAC Capital Trust I, Series 2, 8.13% (b)   57,110   1,343,295  
Total Preferred Securities — 26.4%       125,749,299  
           
Taxable Municipal Bonds — 0.9%   Par
(000)
     
Metropolitan Transportation Authority, RB, Build America          
Bonds, 6.55%, 11/15/31 USD 3,450   4,231,460  
 
US Government Sponsored Agency Securities — 0.3%
Agency Obligations — 0.3%          
Fannie Mae, 4.23%, 10/09/19 (c)(h)   1,670   1,344,575  
 
US Treasury Obligations
US Treasury Bonds (c):          
3.75%, 8/15/41   1,470   1,659,721  
3.13%, 11/15/41   2,465   2,472,703  
US Treasury Notes:          
0.88%, 12/31/16 (c)   3,847   3,869,843  
2.00%, 2/15/22   145   146,088  
Total US Treasury Obligations — 1.7%       8,148,355  
Total Long-Term Investments          
(Cost — $613,809,974) — 135.8%       646,900,945  

Short-Term Securities   Shares   Value  
BlackRock Liquidity Funds, TempFund,          
Institutional Class, 0.15% (i)(j)   1,908,035   $ 1,908,035  
Total Short-Term Securities          
(Cost — $1,908,035) — 0.4%       1,908,035  
 
Options Purchased   Contracts      
Exchange-Traded Put Options — 0.0%          
S&P 500 Index, Strike Price USD 1,200.00,          
Expires 6/16/12   285   74,100  
    Notional
Amount
(000)
     
Over-the-Counter Interest Rate Call Swaptions — 0.0%          
Receive a fixed rate of 2.40% and pay a floating rate          
based on 3-month LIBOR, expires 5/11/12,          
Broker Citibank NA USD 5,500   196  
Receive a fixed rate of 2.61% and pay a floating rate          
based on 3-month LIBOR, expires 4/05/13,          
Broker Citibank NA   3,400   157,467  
        157,663  
Over-the-Counter Interest Rate Put Swaptions — 0.1%          
Receive a fixed rate of 2.61% and pay a floating rate          
based on 3-month LIBOR, expires 4/05/13,          
Broker Citibank NA   3,400   71,501  
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 9/16/13,          
Broker Credit Suisse Securities (USA) LLC EUR 5,300   26,564  
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 10/21/13,          
Broker Citibank NA   5,000   30,708  
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 12/12/13,          
Broker Credit Suisse Securities (USA) LLC   4,000   31,771  
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 2/02/17,          
Broker Deutsche Bank AG USD 4,800   161,107  
        321,651  
Total Options Purchased          
(Cost — $1,797,967) — 0.1%       553,414  
Total Investments Before Options Written          
(Cost — $617,515,976) — 136.3%       649,362,394  
 
Options Written   Contracts      
Over-the-Counter Call Options — (0.0)%          
S&P 500 Index, Strike Price USD 1,450.00,          
Expires 6/15/12, Broker Deutsche Bank AG   7,100   (51,763 )
    Notional
Amount
(000)
     
Over-the-Counter Interest Rate Put Swaptions — (0.1)%          
Receive a fixed rate of 6.00% and pay a floating rate          
based on 3-month LIBOR, Expires 2/02/17,          
Broker Deutsche Bank AG USD 9,600   (142,531 )
Total Options Written          
(Premiums Received — $267,430) — (0.1)%       (194,294 )
Total Investments, Net of Options Written — 136.2%       649,168,100  
Liabilities in Excess of Other Assets — (36.2)%       (172,641,066 )
Net Assets — 100.0%       $ 476,527,034  

See Notes to Financial Statements.

28SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

(a)Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.
(b)Variable rate security. Rate shown is as of report date.
(c)All or a portion of security has been pledged as collateral in connection with open reverse repurchase agreements.
(d)Represents a step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown is as of report date.
(e)Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(f)Security is perpetual in nature and has no stated maturity date.
(g)Non-income producing security.
(h)Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(i)Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate Shares
Held at
October 31,
2011
Net
Activity
Shares
Held at
April 30,
2012
Income
BlackRock Liquidity        
Funds, TempFund,        
Institutional Class 405,708 1,502,327 1,908,035 $ 2,499

(j)Represents the current yield as of report date.
For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Reverse repurchase agreements outstanding as of April 30, 2012 were as follows:
Counterparty Interest
Rate
Trade
Date

Maturity
Date
Net Closing
Amount
  Face
Amount
UBS Securities LLC 0.35% 1/11/12 Open $ 3,803,600      $ 3,799,500
UBS Securities LLC 0.38% 1/12/12 Open 3,174,306   3,170,625
Deutsche Bank AG (0.50)% 1/17/12 Open 452,489   453,150
UBS Securities LLC 0.38% 1/25/12 Open 9,941,548   9,931,750
UBS Securities LLC 0.35% 2/02/12 Open 586,307   585,800
UBS Securities LLC (1.25)% 2/02/12 Open 523,826   525,450
UBS Securities LLC 0.38% 2/14/12 Open 1,125,977   1,125,062
Credit Suisse Securities            
(USA) LLC 0.35% 2/15/12 Open 4,179,526   4,176,440
Credit Suisse Securities            
(USA) LLC 0.35% 2/22/12 Open 4,444,229   4,441,250
UBS Securities LLC 0.38% 2/28/12 Open 10,955,668   10,948,387
Credit Suisse Securities            
(USA) LLC (0.25)% 3/07/12 Open 1,691,354   1,692,000
BNP Paribas            
Securities Corp. 0.35% 3/12/12 Open 1,102,161   1,101,625
UBS Securities LLC 0.35% 3/13/12 Open 5,027,394   5,025,000
UBS Securities LLC 0.37% 3/13/12 Open 5,482,884   5,480,125
UBS Securities LLC 0.38% 3/13/12 Open 13,483,034   13,476,062
UBS Securities LLC 0.32% 3/13/12 Open 2,327,513   2,326,500
Deutsche Bank AG 0.17% 3/14/12 Open 2,403,920   2,403,375
Credit Suisse Securities            
(USA) LLC 0.38% 3/21/12 Open 21,023,614   21,014,519
Credit Suisse Securities            
(USA) LLC 0.35% 3/21/12 Open 9,305,389   9,301,681
Barclays Capital, Inc. 0.35% 3/22/12 Open 2,814,482   2,813,388
Credit Suisse Securities            
(USA) LLC 0.35% 3/22/12 Open 1,406,797   1,406,250
UBS Securities LLC 0.35% 3/23/12 Open 438,971   438,805
BNP Paribas            
Securities Corp. 0.35% 3/27/12 Open 6,279,136   6,277,000
Credit Suisse Securities            
(USA) LLC 0.35% 3/27/12 Open 1,562,451   1,561,920
UBS Securities LLC 0.38% 3/27/12 Open 3,766,891   3,765,500
Barclays Capital, Inc. (1.00)% 4/03/12 Open 637,844   638,341
UBS Securities LLC 0.10% 4/16/12 Open 783,033   783,000
Barclays Capital, Inc. 0.35% 4/18/12 Open 30,370,748   30,366,910
Credit Suisse Securities            
(USA) LLC 0.35% 4/23/12 Open 2,690,260   2,690,050
Barclays Capital, Inc. 0.35% 4/24/12 Open 1,740,712   1,740,594
Deutsche Bank AG 0.12% 4/24/12 Open 3,875,943   3,875,853
Deutsche Bank AG 0.00% 4/24/12 Open 235,850   235,850
UBS Securities LLC 0.34% 4/24/12 Open 1,325,338   1,325,250
BNP Paribas            
Securities Corp. 0.23% 4/25/12 Open 1,329,788   1,329,737
BNP Paribas            
Securities Corp. 0.19% 4/25/12 Open 1,655,640   1,655,587
UBS Securities LLC 0.34% 4/25/12 Open 6,396,737   6,396,376
BNP Paribas            
Securities Corp. 0.35% 4/26/12 Open 3,984,194   3,984,000
BNP Paribas            
Securities Corp. 0.37% 4/26/12 Open 4,364,224   4,364,000
Deutsche Bank AG 0.25% 4/26/12 Open 2,911,601   2,911,500
Total       $ 179,605,379   $ 179,538,212

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201229
 

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

Financial futures contracts purchased as of April 30, 2012 were as follows:
Contracts Issue Exchange Expiration Notional
Value
Unrealized
Appreciation
138 5-Year US Chicago Board    
  Treasury Note of Trade June 2012 USD 17,083,969 $ 73,074

Financial futures contracts sold as of April 30, 2012 were as follows:
Contracts Issue Exchange Expiration Notional
Value
Unrealized
Depreciation
    1 Euro-Bund Eurex June 2012 EUR 186,761 $ (3,312)
381 10-Year US Chicago Board        
  Treasury Note of Trade June 2012 USD 50,399,156   (481,062)
  45 30-Year US Chicago Board        
  Treasury Bond of Trade June 2012 USD 6,429,375   (51,193)
131 Ultra Long Term Chicago Board        
  US Treasury Bond of Trade June 2012 USD 20,673,438   (434,979)
Total           $ (970,546)

Foreign currency exchange contracts as of April 30, 2012 were as follows:
Currency
Purchased
Currency
Sold
Counterparty Settlement
Date
Unrealized
Depreciation
USD  725,340 EUR   549,500 Citibank NA 7/25/12 $ (2,375)

Credit default swaps on single-name issues — buy protection outstanding as of April 30, 2012 were as follows:
Issuer Pay
Fixed
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Depreciation
STMicroelectron-   Deutsche        
ics NV 1.00% Bank AG 12/20/16 EUR 1,215 $ (19,433)
Southwest   Goldman        
Airlines Co. 1.00% Sachs & Co. 12/20/16 USD 1,185 (29,721)
Southwest   Royal Bank        
Airlines Co. 1.00% of Scotland Plc 12/20/16 USD 1,185 (34,328)
Time   Credit Suisse        
Warner Inc.   Securities        
  1.00% (USA) LLC 3/20/17 USD 7,500 (6,735)
Emerson   Morgan Stanley        
Electric Co. 1.00% & Co., Inc. 3/20/17 USD 2,330 (18,508)
Total           $ (108,725)

Credit default swaps on single-name issues — sold protection outstanding as of April 30, 2012 were as follows:
Issuer Receive
Fixed

Rate
Counterparty/
Exchange
Expiration
Date
Issuer
Credit
Rating1
Notional
Amount
(000)2
Unrealized
Appreciation
(Depreciation)
Aviva USA   Deutsche          
Corp. 1.00% Bank AG 5/25/12 A USD 2,775 $ (36)
DIRECTV   Credit Suisse          
Holdings   Securities          
LLC 1.00% (USA) LLC 3/20/17 BBB USD 7,500 126,530
MetLife, Inc. 1.00% Deutsche          
    Bank AG 3/20/18 A- USD    900 (18,790)
Total             $ 107,704

1Using S&P’s rating.
2The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement.
Credit default swaps on traded indexes — sold protection outstanding as of April 30, 2012 were as follows:
Index Receive
Fixed
Rate
Counter-
party
Expiration
Date
Credit
Rating3
Notional
Amount
(000)4
Unrealized
Appreciation
Dow Jones            
CDX North            
America High            
Yield Index   Credit Suisse        
Series 18,   Securities        
Version 1 5.00% (USA) LLC 6/20/17 B+ USD 1,860 $ 28,155

3Using S&P’s rating of the underlying securities.
4The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement.
Interest rate swaps outstanding as of April 30, 2012 were as follows:
Fixed
Rate
Floating
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Appreciation
(Depreciation)
1.17%5 3-month Credit Suisse        
  LIBOR Securities        
    (USA) LLC 4/11/17 USD 7,500 $ (31,603)
1.18%5 3-month Deutsche        
  LIBOR Bank AG 4/11/17 USD 20,700 (97,238)
2.35%5 3-month Deutsche        
  LIBOR Bank AG 3/19/22 USD 14,100 (414,954)
4.03%5 3-month          
  LIBOR UBS AG 4/18/22 USD 5,900 (875,107)
2.05%6 3-month Credit Suisse        
  LIBOR Securities        
    (USA) LLC 5/02/22 USD 5,900
2.05%6 3-month Credit Suisse        
  LIBOR Securities        
    (USA) LLC 5/02/22 USD 3,900 1,987
Total           $ (1,416,915)

5Fund pays a fixed interest rate and receives floating rate.
6Fund pays a floating interest rate and receives fixed rate.
Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:
Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities
Level 2 —other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)
Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

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

See Notes to Financial Statements.

30SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

The following tables summarize the inputs used as of April 30, 2012 in determining the fair valuation of the Fund’s investments and derivative financial instruments:

Valuation Inputs  Level 1  Level 2  Level 3  Total
Assets:                    
Investments:                    
Long-Term                    
Investments:                    
Asset-Backed Securities      $2,951,661   $2,239,250   $5,190,911 
Corporate Bonds       498,725,845    3,510,500    502,236,345 
Preferred Securities  $1,378,015    124,371,284        125,749,299 
Taxable Municipal Bonds       4,231,460        4,231,460 
US Government Sponsored                    
Agency Securities       1,344,575        1,344,575 
US Treasury Obligations       8,148,355        8,148,355 
Short-Term Securities   1,908,035            1,908,035 
Total  $3,286,050   $639,773,180   $5,749,750   $648,808,980 

Valuation Inputs  Level 1  Level 2  Level 3  Total
Derivative Financial Instruments1                    
Assets:                    
Equity contracts  $74,100           $74,100 
Interest rate contracts   73,074   $481,301        554,375 
Credit contracts       154,685        154,685 
Liabilities:                    
Equity contracts       (51,763)       (51,763)
Interest rate contracts   (970,546)   (1,561,433)       (2,531,979)
Foreign currency                    
exchange contracts       (2,375)       (2,375)
Credit contracts       (127,515)  $(36)   (127,551)
Total  $(823,372)  $(1,107,100)  $(36)  $(1,930,508)

1Derivative financial instruments are swaps, financial futures contracts, foreign currency exchange contracts and options. Swaps, financial futures contracts and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

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

   Asset-Backed
Securities
  Corporate
Bonds
  Total
Assets:               
Balance, as of October 31, 2011  $2,053,750   $3,536,000   $5,589,750 
Accrued discounts/premiums   18,738        18,738 
Net realized gain (loss)            
Net change in unrealized appreciation/depreciation2   166,762    (25,500)   141,262 
Purchases            
Sales            
Transfers in3            
Transfers out3            
Balance, as of April 30, 2012  $2,239,250   $3,510,500   $5,749,750 

2Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on investments still held at April 30, 2012 was $3,677,262.
3The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the period of the event or the change in circumstances that caused the transfer.

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

   Credit
Contracts
Assets/Liabilities:     
Balance, as of October 31, 2011  $5,018 
Accrued discounts/premiums   8,988 
Net realized gain (loss)    
Net change in unrealized appreciation/depreciation4   (5,054)
Purchases    
Issuances5    
Sales    
Settlements6   (8,988)
Transfers in3    
Transfers out3    
Balance, as of April 30, 2012  $(36)

4Included in the related net change in unrealized appreciation/depreciation in the Statements of operations. The change in unrealized appreciation/depreciation on derivative financial instruments still held at April 30, 2012 was $(5,054).
5Issuances represent upfront cash received on certain derivative financial instruments.
6Settlements represent periodic contractual cash flows and/or cash flows to terminate certain derivative financial instruments.

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

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201231
 

Schedule of Investments April 30, 2012 (Unaudited) BlackRock Credit Allocation Income Trust III (BPP)
  (Percentages shown are based on Net Assets)

Asset-Backed Securities — 0.5%   Par
(000)
  Value
Atrium CDO Corp., Series 5A, Class A4,        
0.88%, 7/20/20 (a)(b) USD  1,300   $ 1,098,500
 
Corporate Bonds        
Aerospace & Defense — 1.1%        
BE Aerospace, Inc., 8.50%, 7/01/18   1,215   1,345,612
Huntington Ingalls Industries, Inc.:        
6.88%, 3/15/18   290   306,675
7.13%, 3/15/21   300   317,625
Kratos Defense & Security Solutions, Inc.,        
10.00%, 6/01/17   460   494,500
        2,464,412
Airlines — 0.7%        
American Airlines Pass-Through Trust, Series 2011-2,        
Class A, 8.63%, 4/15/23   257   271,321
Continental Airlines Pass-Through Certificates,        
Series 2009-2, Class B, 9.25%, 5/10/17   650   709,715
Delta Air Lines, Inc., Series 02G1, 6.72%, 7/02/24   520   547,143
        1,528,179
Auto Components — 0.8%        
Delphi Corp., 6.13%, 5/15/21 (a)   280   298,200
Icahn Enterprises LP:        
8.00%, 1/15/18   1,130   1,207,688
7.75%, 1/15/16   290   305,225
        1,811,113
Beverages — 0.5%        
Constellation Brands, Inc., 7.25%, 5/15/17   955   1,079,150
Building Products — 0.3%        
Building Materials Corp. of America (a):        
7.00%, 2/15/20   180   192,150
6.75%, 5/01/21   460   478,975
        671,125
Capital Markets — 3.6%        
Ameriprise Financial, Inc., 5.30%, 3/15/20 (c)   1,500   1,677,095
E*Trade Financial Corp., 12.50%, 11/30/17   900   1,048,500
The Goldman Sachs Group, Inc. (c):        
5.75%, 1/24/22   800   835,355
6.25%, 2/01/41   2,150   2,184,707
Morgan Stanley, 5.50%, 7/28/21 (c)   1,600   1,564,216
Murray Street Investment Trust I, 4.65%, 3/09/17 (d)   300   301,801
UBS AG, 2.25%, 1/28/14 (c)   775   779,022
        8,390,696
Chemicals — 1.4%        
Ashland, Inc., 9.13%, 6/01/17   20   22,200
Celanese US Holdings LLC, 5.88%, 6/15/21   760   815,100
Hexion US Finance Corp., 6.63%, 4/15/20 (a)   425   444,125
Ineos Finance Plc (a):        
8.38%, 2/15/19   155   166,238
7.50%, 5/01/20   355   364,763
LyondellBasell Industries NV, 5.75%, 4/15/24 (a)   915   944,737
Solutia, Inc., 7.88%, 3/15/20   415   484,512
        3,241,675
Commercial Banks — 4.4%        
Amsouth Bank, Series AI, 4.85%, 4/01/13   525   532,875
Asciano Finance Ltd., 5.00%, 4/07/18 (a)   425   442,416
Associated Banc-Corp, 5.13%, 3/28/16   1,070   1,132,791
Branch Banking & Trust Co. (b):        
0.79%, 9/13/16   550   518,399
0.79%, 5/23/17   325   303,104

Corporate Bonds   Par
(000)
  Value
Commercial Banks (concluded)        
CIT Group, Inc.:        
7.00%, 5/02/16 (a) USD 720   $ 721,800
7.00%, 5/02/17 (a)   550   551,375
5.25%, 3/15/18   580   597,400
5.50%, 2/15/19 (a)   500   513,750
Discover Bank, 8.70%, 11/18/19   550   693,718
HSBC Finance Corp., 6.68%, 1/15/21   750   809,989
Regions Financial Corp.:        
4.88%, 4/26/13   1,225   1,261,750
5.75%, 6/15/15   850   896,750
RESPARCS Funding LP I, 8.00% (e)   4,000   1,272,000
        10,248,117
Commercial Services & Supplies — 3.9%        
Aviation Capital Group Corp. (a):        
7.13%, 10/15/20 (c)   4,500   4,602,597
6.75%, 4/06/21   1,125   1,113,075
Casella Waste Systems, Inc., 7.75%, 2/15/19   336   330,960
Clean Harbors, Inc., 7.63%, 8/15/16   630   661,500
Corrections Corp. of America, 7.75%, 6/01/17   1,600   1,736,000
Covanta Holding Corp., 6.38%, 10/01/22   320   329,156
Iron Mountain, Inc., 7.75%, 10/01/19   190   207,100
Mobile Mini, Inc., 7.88%, 12/01/20   135   144,450
        9,124,838
Communications Equipment — 1.0%        
Avaya, Inc., 9.75%, 11/01/15 (c)   400   396,500
Brocade Communications Systems, Inc.,        
6.88%, 1/15/20 (c)   1,450   1,584,125
Hughes Satellite Systems Corp., 6.50%, 6/15/19   210   224,700
        2,205,325
Construction Materials — 0.2%        
HD Supply, Inc., 8.13%, 4/15/19 (a)   430   461,713
Consumer Finance — 5.3%        
American Express Credit Corp., 2.75%, 9/15/15 (c)   2,900   3,009,046
Capital One Bank USA NA, 8.80%, 7/15/19   1,625   2,052,214
Daimler Finance North America LLC, 2.63%, 9/15/16 (a) 1,650   1,706,126
Ford Motor Credit Co. LLC:        
7.00%, 4/15/15   1,420   1,583,300
5.88%, 8/02/21   200   226,018
Inmarsat Finance Plc, 7.38%, 12/01/17 (a)   870   935,250
SLM Corp., 6.25%, 1/25/16   2,365   2,435,950
Toll Brothers Finance Corp., 5.88%, 2/15/22   200   206,983
        12,154,887
Containers & Packaging — 1.2%        
Ardagh Packaging Finance Plc, 9.13%, 10/15/20 (a)   205   221,912
Ball Corp.:        
7.13%, 9/01/16   850   930,750
6.75%, 9/15/20   1,070   1,182,350
Crown Americas LLC, 6.25%, 2/01/21   400   435,000
Sealed Air Corp., 8.38%, 9/15/21 (a)   65   73,775
        2,843,787
Diversified Financial Services — 7.8%        
Ally Financial, Inc.:        
4.50%, 2/11/14   400   404,000
8.30%, 2/12/15   780   856,050
8.00%, 11/01/31   620   709,900
Bank of America Corp. (c):        
5.30%, 3/15/17   2,440   2,544,791
5.00%, 5/13/21   3,625   3,608,035
Citigroup, Inc. (c):        
6.38%, 8/12/14   625   673,997
4.59%, 12/15/15   475   497,515
8.50%, 5/22/19   550   683,363

See Notes to Financial Statements.

32SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust III (BPP)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Diversified Financial Services (concluded)        
Countrywide Financial Corp., 6.25%, 5/15/16 (c) USD 1,569   $ 1,627,001
DPL, Inc., 7.25%, 10/15/21 (a)   520   577,200
General Motors Financial Co., Inc., 6.75%, 6/01/18   250   266,258
ING Bank NV, 5.00%, 6/09/21 (a)(c)   1,150   1,171,414
Intesa Sanpaolo SpA:        
2.38%, 12/21/12   1,700   1,675,942
6.50%, 2/24/21 (a)   200   181,712
Moody’s Corp., 6.06%, 9/07/17   1,500   1,577,449
Reynolds Group Issuer, Inc. (a):        
7.13%, 4/15/19   115   120,175
7.88%, 8/15/19   420   453,600
9.88%, 8/15/19   145   151,163
6.88%, 2/15/21   105   108,150
WMG Acquisition Corp., 9.50%, 6/15/16 (a)   100   109,250
        17,996,965
Diversified Telecommunication Services — 4.1%        
AT&T, Inc., 6.30%, 1/15/38 (c)   2,000   2,396,956
Level 3 Financing, Inc. (a):        
8.13%, 7/01/19   1,577   1,620,368
8.63%, 7/15/20   370   387,575
Telecom Italia Capital SA, 6.18%, 6/18/14   500   516,150
Telefonica Emisiones SAU, 5.46%, 2/16/21   660   620,291
Verizon Communications, Inc. (c):        
1.95%, 3/28/14   1,775   1,816,453
7.35%, 4/01/39   1,150   1,577,515
Windstream Corp., 7.88%, 11/01/17   400   442,000
        9,377,308
Electric Utilities — 2.3%        
CMS Energy Corp., 5.05%, 3/15/22   550   559,846
Duke Energy Corp., 3.55%, 9/15/21   825   860,763
Great Plains Energy, Inc., 5.29%, 6/15/22 (d)   800   874,523
Progress Energy, Inc., 7.00%, 10/30/31 (c)   2,000   2,610,674
Southern Co., 1.95%, 9/01/16   475   486,111
        5,391,917
Electronic Equipment, Instruments & Components — 0.3%      
Jabil Circuit, Inc., 8.25%, 3/15/18   400   466,000
NXP BV, 3.22%, 10/15/13 (b)   198   198,000
        664,000
Energy Equipment & Services — 2.9%        
Atwood Oceanics, Inc., 6.50%, 2/01/20   55   57,888
Energy Transfer Partners LP, 5.20%, 2/01/22   1,500   1,598,842
Ensco Plc, 4.70%, 3/15/21   960   1,047,510
Frac Tech Services LLC, 7.13%, 11/15/18 (a)   525   542,062
Hornbeck Offshore Services, Inc., 5.88%, 4/01/20 (a) 135   134,663
Key Energy Services, Inc., 6.75%, 3/01/21   360   370,800
MEG Energy Corp., 6.50%, 3/15/21 (a)   465   489,412
Oil States International, Inc., 6.50%, 6/01/19   245   259,088
Peabody Energy Corp., 6.25%, 11/15/21 (a)   755   764,437
Transocean, Inc.:        
6.50%, 11/15/20   545   625,892
6.38%, 12/15/21   660   772,855
        6,663,449
Food & Staples Retailing — 0.9%        
Wal-Mart Stores, Inc., 5.25%, 9/01/35 (c)   1,850   2,125,269
Food Products — 0.9%        
Kraft Foods, Inc.:        
6.50%, 8/11/17   800   970,724
6.13%, 8/23/18   800   967,601
Smithfield Foods, Inc., 10.00%, 7/15/14   187   218,790
        2,157,115
Gas Utilities — 0.2%        
El Paso Natural Gas Co., 8.63%, 1/15/22   335   423,995

Corporate Bonds   Par
(000)
  Value
Health Care Equipment & Supplies — 0.6%        
Fresenius US Finance II, Inc., 9.00%, 7/15/15 (a) USD 1,000   $ 1,146,250
Teleflex, Inc., 6.88%, 6/01/19   240   256,800
        1,403,050
Health Care Providers & Services — 3.8%        
Aetna, Inc., 6.75%, 12/15/37 (c)   850   1,103,493
Aviv Healthcare Properties LP, 7.75%, 2/15/19   220   228,800
HCA, Inc.:        
8.50%, 4/15/19   105   117,797
6.50%, 2/15/20   1,145   1,225,150
7.25%, 9/15/20   1,645   1,821,837
INC Research LLC, 11.50%, 7/15/19 (a)   340   334,050
inVentiv Health, Inc., 10.00%, 8/15/18 (a)   135   121,038
Tenet Healthcare Corp.:        
10.00%, 5/01/18   745   860,475
8.88%, 7/01/19   550   616,688
UnitedHealth Group, Inc., 6.88%, 2/15/38 (c)   1,725   2,310,984
        8,740,312
Health Care Technology — 0.9%        
Amgen, Inc.:        
5.15%, 11/15/41 (c)   2,015   2,099,926
5.65%, 6/15/42   20   22,249
        2,122,175
Household Durables — 0.2%        
Standard Pacific Corp., 8.38%, 1/15/21   435   458,925
Independent Power Producers & Energy Traders — 1.1%      
AES Corp.:        
9.75%, 4/15/16   480   566,400
7.38%, 7/01/21 (a)   70   77,875
Calpine Corp., 7.25%, 10/15/17 (a)   220   234,850
Energy Future Intermediate Holding Co. LLC,        
10.00%, 12/01/20   915   1,009,931
Laredo Petroleum, Inc.:        
9.50%, 2/15/19   140   156,450
7.38%, 5/01/22 (a)   130   134,550
QEP Resources, Inc., 5.38%, 10/01/22   280   280,000
        2,460,056
Insurance — 5.4%        
American International Group, Inc.:        
3.80%, 3/22/17 (c)   725   748,793
8.25%, 8/15/18   300   363,489
6.40%, 12/15/20 (c)   1,235   1,418,594
Aon Corp., 5.00%, 9/30/20 (c)   1,500   1,666,660
Fairfax Financial Holdings Ltd., 5.80%, 5/15/21 (a)   1,500   1,457,420
Forethought Financial Group, Inc., 8.63%, 4/15/21 (a) 525   536,924
Genworth Financial, Inc., 7.63%, 9/24/21   480   473,951
Manulife Financial Corp., 4.90%, 9/17/20   1,075   1,123,357
MPL 2 Acquisition Canco, Inc., 9.88%, 8/15/18 (a)   210   181,125
Principal Financial Group, Inc., 8.88%, 5/15/19   475   615,226
Prudential Financial, Inc., 6.63%, 12/01/37 (c)   1,725   2,000,427
XL Group Ltd., 5.75%, 10/01/21   1,740   1,924,289
        12,510,255
IT Services — 0.7%        
Epicor Software Corp., 8.63%, 5/01/19   340   351,900
Fidelity National Information Services, Inc.,        
5.00%, 3/15/22 (a)   160   160,000
First Data Corp.:        
7.38%, 6/15/19 (a)(c)   455   465,238
8.25%, 1/15/21 (a)   40   39,400
12.63%, 1/15/21   340   340,850
SunGard Data Systems, Inc., 7.38%, 11/15/18   350   373,625
        1,731,013

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201233
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust III (BPP)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Life Sciences Tools & Services — 1.9%        
Bio-Rad Laboratories, Inc., 8.00%, 9/15/16 USD 1,830   $ 2,022,150
Life Technologies Corp., 6.00%, 3/01/20   2,000   2,325,530
        4,347,680
Machinery — 1.2%        
Ingersoll-Rand Global Holding Co., Ltd., 9.50%, 4/15/14 1,725   1,982,617
UR Financing Escrow Corp. (a):        
5.75%, 7/15/18   114   117,705
7.38%, 5/15/20   290   304,500
7.63%, 4/15/22   267   282,352
        2,687,174
Media — 9.6%        
AMC Networks, Inc., 7.75%, 7/15/21 (a)   190   212,325
CCH II LLC, 13.50%, 11/30/16   1,128   1,274,640
Comcast Corp., 6.30%, 11/15/17 (c)   1,725   2,092,454
Cox Communications, Inc., 8.38%, 3/01/39 (a)   1,725   2,476,729
CSC Holdings LLC:        
8.50%, 4/15/14   330   363,825
8.63%, 2/15/19   580   658,300
DIRECTV Holdings LLC, 5.00%, 3/01/21   1,250   1,366,934
DISH DBS Corp., 7.00%, 10/01/13   850   910,562
Intelsat Jackson Holdings SA, 7.25%, 4/01/19   150   156,375
Intelsat Luxemburg SA:        
11.25%, 2/04/17   300   311,250
11.50%, 2/04/17 (f)   190   198,075
The Interpublic Group of Cos., Inc., 10.00%, 7/15/17 575   654,781
Kabel BW Erste Beteiligungs GmbH, 7.50%, 3/15/19 (a) 500   533,750
The New York Times Co., 6.63%, 12/15/16   1,725   1,800,469
News America, Inc., 6.15%, 3/01/37 (c)   2,000   2,221,498
Time Warner Cable, Inc., 6.75%, 6/15/39   1,950   2,351,300
Time Warner, Inc., 7.70%, 5/01/32   2,000   2,620,306
Unitymedia Hessen GmbH & Co. KG (FKA UPC        
Germany GmbH), 8.13%, 12/01/17 (a)   505   541,613
Virgin Media Secured Finance Plc, 6.50%, 1/15/18   1,300   1,417,000
        22,162,186
Metals & Mining — 2.1%        
Alcoa, Inc., 5.40%, 4/15/21   290   304,793
Barrick Gold Corp., 2.90%, 5/30/16   550   576,739
Barrick North America Finance LLC, 5.70%, 5/30/41 (c) 650   716,234
Freeport-McMoRan Copper & Gold, Inc., 3.55%, 3/01/22 675   666,956
Freeport-McMoRan Corp., 7.13%, 11/01/27   1,400   1,727,642
New Gold, Inc., 7.00%, 4/15/20 (a)   65   66,462
Novelis, Inc., 8.75%, 12/15/20   470   518,175
Teck Resources Ltd., 10.75%, 5/15/19   190   235,125
        4,812,126
Multi-Utilities — 1.6%        
CenterPoint Energy, Inc.:        
5.95%, 2/01/17   1,500   1,714,863
6.50%, 5/01/18   1,600   1,904,085
        3,618,948
Multiline Retail — 0.3%        
JC Penney Co., Inc., 5.65%, 6/01/20 (c)   720   698,400
Oil, Gas & Consumable Fuels — 13.5%        
Anadarko Petroleum Corp.:        
5.95%, 9/15/16   497   574,604
6.38%, 9/15/17   12   14,261
Berry Petroleum Co., 6.38%, 9/15/22   205   213,200
BP Capital Markets Plc:        
3.88%, 3/10/15   700   749,740
3.20%, 3/11/16   925   985,439
Buckeye Partners LP, 4.88%, 2/01/21   475   490,677
Chesapeake Midstream Partners LP:        
5.88%, 4/15/21   285   270,750
6.13%, 7/15/22   230   221,375
Chesapeake Oilfield Operating LLC, 6.63%, 11/15/19 (a) 20   18,800

Corporate Bonds   Par
(000)
  Value
Oil, Gas & Consumable Fuels (concluded)        
Concho Resources, Inc., 5.50%, 10/01/22 USD 205   $ 205,000
CONSOL Energy, Inc., 6.38%, 3/01/21   220   206,800
Copano Energy LLC, 7.13%, 4/01/21   270   284,850
DCP Midstream LLC, 4.75%, 9/30/21 (a)   625   674,917
El Paso Pipeline Partners Operating Co. LLC:        
6.50%, 4/01/20   680   781,113
5.00%, 10/01/21   300   316,934
Enbridge Energy Partners LP, 9.88%, 3/01/19   1,000   1,348,961
Energy XXI Gulf Coast, Inc., 7.75%, 6/15/19   500   516,250
Enterprise Products Operating LLC, 6.65%, 4/15/18   2,000   2,421,606
Everest Acquisition LLC/Everest Acquisition        
Finance, Inc., 6.88%, 5/01/19 (a)   165   173,250
Forest Oil Corp., 8.50%, 2/15/14   600   645,000
Kinder Morgan Energy Partners LP, 6.85%, 2/15/20 (c)   2,000   2,418,780
Kodiak Oil & Gas Corp., 8.13%, 12/01/19 (a)   110   116,600
Linn Energy LLC:        
6.25%, 11/01/19 (a)   545   536,825
7.75%, 2/01/21   220   232,100
Marathon Petroleum Corp., 3.50%, 3/01/16   650   681,796
MarkWest Energy Partners LP, 6.25%, 6/15/22   255   268,388
Newfield Exploration Co., 6.88%, 2/01/20   275   292,188
Nexen, Inc., 6.40%, 5/15/37   670   743,711
Oasis Petroleum, Inc.:        
7.25%, 2/01/19   165   174,900
6.50%, 11/01/21   145   147,900
OGX Petroleo e Gas Participacoes SA,        
8.50%, 6/01/18 (a)(c)   575   596,563
ONEOK Partners LP, 8.63%, 3/01/19   1,725   2,255,815
Petrobras International Finance Co.:        
3.88%, 1/27/16   1,800   1,884,301
5.38%, 1/27/21   1,075   1,177,587
Petrohawk Energy Corp., 10.50%, 8/01/14   300   333,000
Petroleum Geo-Services ASA, 7.38%, 12/15/18 (a)   310   320,850
Phillips 66, 2.95%, 5/01/17 (a)   515   528,453
Pioneer Natural Resources Co.:        
6.65%, 3/15/17   320   363,029
6.88%, 5/01/18   240   282,536
Plains Exploration & Production Co.:        
10.00%, 3/01/16   200   220,000
6.75%, 2/01/22   30   31,200
Precision Drilling Corp., 6.50%, 12/15/21   210   218,400
Premier Oil Plc, 5.00%, 6/09/18   1,625   1,677,812
Range Resources Corp., 6.75%, 8/01/20   415   450,275
Ruby Pipeline LLC, 6.00%, 4/01/22 (a)   1,425   1,459,100
Samson Investment Co., 9.75%, 2/15/20 (a)   295   307,906
SandRidge Energy, Inc.:        
7.50%, 3/15/21   95   95,950
8.13%, 10/15/22 (a)   105   108,938
SM Energy Co.:        
6.63%, 2/15/19   110   116,050
6.50%, 11/15/21   165   174,075
Targa Resources Partners LP, 6.88%, 2/01/21   240   250,800
Tennessee Gas Pipeline Co., 8.00%, 2/01/16   400   466,278
Western Gas Partners LP, 5.38%, 6/01/21   725   791,011
The Williams Cos., Inc., 8.75%, 3/15/32   247   333,728
        31,170,372
Paper & Forest Products — 3.1%        
Boise Paper Holdings LLC:        
9.00%, 11/01/17   140   155,750
8.00%, 4/01/20   310   341,775
Georgia-Pacific LLC, 8.25%, 5/01/16 (a)   980   1,082,900
International Paper Co.:        
7.50%, 8/15/21   1,625   2,063,020
8.70%, 6/15/38   900   1,226,057
7.30%, 11/15/39   1,725   2,134,436
Longview Fibre Paper & Packaging, Inc.,        
8.00%, 6/01/16 (a)   160   161,600
        7,165,538

See Notes to Financial Statements.

34SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust III (BPP)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Pharmaceuticals — 2.2%        
Merck & Co., Inc., 6.50%, 12/01/33 USD 990   $ 1,365,119
Pfizer, Inc., 7.20%, 3/15/39 (c)   1,635   2,417,304
Roche Holdings, Inc., 7.00%, 3/01/39 (a)   865   1,227,709
Valeant Pharmaceuticals International,        
6.50%, 7/15/16 (a)   125   129,531
        5,139,663
Professional Services — 0.0%        
FTI Consulting, Inc., 7.75%, 10/01/16   100   104,000
Real Estate Investment Trusts (REITs) — 2.9%        
AvalonBay Communities, Inc., 6.10%, 3/15/20 (c)   1,725   2,053,875
Developers Diversified Realty Corp.:        
4.75%, 4/15/18   315   326,363
7.88%, 9/01/20   375   450,357
ERP Operating LP, 5.75%, 6/15/17   1,715   1,973,905
HCP, Inc., 5.38%, 2/01/21   500   550,860
UDR, Inc., 4.25%, 6/01/18   725   770,394
Ventas Realty LP/Ventas Capital Corp., 4.75%, 6/01/21 550   567,031
        6,692,785
Real Estate Management & Development — 0.2%        
Realogy Corp., 7.63%, 1/15/20 (a)(c)   295   306,063
Shea Homes LP, 8.63%, 5/15/19 (a)   230   239,775
        545,838
Road & Rail — 1.4%        
Avis Budget Car Rental LLC, 8.25%, 1/15/19   54   56,565
Florida East Coast Railway Corp., 8.13%, 2/01/17   80   82,200
The Hertz Corp., 6.75%, 4/15/19   188   196,225
Norfolk Southern Corp., 6.00%, 3/15/2105 (c)   2,500   2,898,215
        3,233,205
Semiconductors & Semiconductor Equipment — 0.7%      
Advanced Micro Devices, Inc., 7.75%, 8/01/20   400   441,000
KLA-Tencor Corp., 6.90%, 5/01/18   918   1,110,790
        1,551,790
Software — 0.1%        
Lawson Software, Inc., 9.38%, 4/01/19 (a)   220   229,900
Specialty Retail — 1.2%        
AutoNation, Inc., 6.75%, 4/15/18   940   1,019,900
Limited Brands, Inc., 7.00%, 5/01/20   470   521,700
QVC, Inc., 7.38%, 10/15/20 (a)   50   54,750
Sally Holdings LLC, 6.88%, 11/15/19 (a)   290   308,850
VF Corp., 5.95%, 11/01/17   725   865,353
        2,770,553
Tobacco — 2.4%        
Altria Group, Inc., 10.20%, 2/06/39 (c)   1,919   3,074,574
Lorillard Tobacco Co., 3.50%, 8/04/16   1,175   1,231,249
Philip Morris International, Inc., 2.50%, 5/16/16 (c)   1,225   1,288,003
        5,593,826
Wireless Telecommunication Services — 5.3%        
America Movil SAB de CV, 2.38%, 9/08/16   1,780   1,816,518
American Tower Corp.:        
4.50%, 1/15/18   925   976,740
5.05%, 9/01/20   500   529,038
Cricket Communications, Inc., 7.75%, 5/15/16   325   342,063
Crown Castle International Corp., 9.00%, 1/15/15   430   475,150
Crown Castle Towers LLC (a):        
5.50%, 1/15/37   575   634,866
4.17%, 8/15/37   1,000   1,046,738
6.11%, 1/15/40   625   713,732
Nextel Communications, Inc., Series E,        
6.88%, 10/31/13   395   395,000
SBA Tower Trust, 5.10%, 4/15/42 (a)   2,500   2,720,517
Sprint Capital Corp., 6.88%, 11/15/28   480   358,800

Corporate Bonds   Par
(000)
  Value
Wireless Telecommunication Services (concluded)        
Sprint Nextel Corp. (a):        
9.00%, 11/15/18 USD 760   $ 836,950
7.00%, 3/01/20   1,290   1,315,800
        12,161,912
Total Corporate Bonds — 106.2%       245,136,717
 
Preferred Securities
Capital Trusts        
Capital Markets — 3.7%        
State Street Capital Trust III, 5.46% (b)(e)   1,385   1,390,429
State Street Capital Trust IV, 1.47%, 6/01/37 (b)   9,675   7,199,874
        8,590,303
Commercial Banks — 3.1%        
Barclays Bank Plc (a)(b)(e):        
5.93%,   1,700   1,547,000
7.43%,   325   325,000
BNP Paribas, 7.20% (a)(b)(c)(e)   700   602,000
Credit Agricole SA, 8.38% (a)(b)(c)(e)   725   638,000
Dresdner Funding Trust I, 8.15%, 6/30/31 (a)   1,095   881,475
FCB/NC Capital Trust I, 8.05%, 3/01/28   1,100   1,105,265
National City Preferred Capital Trust I, 12.00% (b)(e)   600   638,640
NBP Capital Trust III, 7.38% (e)   2,000   1,380,000
        7,117,380
Consumer Finance — 0.3%        
Capital One Capital V, 10.25%, 8/15/39   750   781,875
Diversified Financial Services — 4.3%        
JPMorgan Chase Capital XXI, Series U,        
1.49%, 2/02/37 (b)   7,125   5,276,191
JPMorgan Chase Capital XXIII, 1.50%, 5/15/47 (b)   6,190   4,580,730
        9,856,921
Electric Utilities — 0.4%        
PPL Capital Funding, 6.70%, 3/30/67 (b)   900   891,000
Insurance — 7.8%        
The Allstate Corp., 6.50%, 5/15/67 (b)   900   879,750
American General Capital II, 8.50%, 7/01/30   100   109,301
American International Group, Inc., 8.18%, 5/15/68 (b)   400   427,500
AXA SA, 6.38% (a)(b)(e)   900   715,500
Chubb Corp., 6.38%, 3/29/67 (b)   900   921,375
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(b)   900   1,224,000
Lincoln National Corp., 7.00%, 5/17/66 (b)   900   873,000
MetLife, Inc., 6.40%, 12/15/66   900   880,392
Mitsui Sumitomo Insurance Co., Ltd.,        
7.00%, 3/15/72 (a)(b)   700   719,201
Northwestern Mutual Life Insurance,        
6.06%, 3/30/40 (a)(c)   1,800   2,144,666
Prudential Plc, 6.50% (e)   6,000   5,661,000
Reinsurance Group of America, 6.75%, 12/15/65 (b)   1,300   1,202,894
Swiss Re Capital I LP, 6.85% (a)(b)(e)   1,000   919,653
ZFS Finance (USA) (a)(b):        
Trust II, 6.45%, 12/15/65   1,150   1,127,000
Trust IV, 5.88%, 5/09/62   190   190,237
        17,995,469
Oil, Gas & Consumable Fuels — 0.4%        
TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b)   900   939,503
Total Capital Trusts — 20.0%       46,172,451

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201235
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust III (BPP)
  (Percentages shown are based on Net Assets)

Preferred Stocks — 0.4%   Shares   Value  
Diversified Financial Services — 0.4%          
Ally Financial, Inc., 7.00% (a)   1,170   $ 993,038  
           
Trust Preferreds — 0.3%
Diversified Financial Services — 0.3%          
GMAC Capital Trust I, Series 2, 8.13% (b)   26,490   623,076  
Total Preferred Securities — 20.7%       47,788,565  
           
Taxable Municipal Bonds — 0.9%   Par
(000)
     
Metropolitan Transportation Authority, RB, Build America          
Bonds, 6.55%, 11/15/31 USD  1,675   2,054,404  
           
US Government Sponsored Agency Securities — 0.3%
Agency Obligations — 0.3%          
Fannie Mae, 4.23%, 10/09/19 (c)(g)   805   648,134  
           
U.S. Treasury Obligations          
US Treasury Bonds (c):          
3.75%, 8/15/41   713   805,021  
3.13%, 11/15/41   1,060   1,063,312  
US Treasury Notes, 0.88%, 12/31/16 (c)   1,875   1,886,134  
Total U.S. Treasury Obligations — 1.6%       3,754,467  
           
Warrants — 0.0% (h)   Shares      
Media — 0.0%          
Cumulus Media, Inc. (Expires 3/26/19)   2,345   17,872  
Total Long-Term Investments          
(Cost — $289,613,314) — 130.2%       300,498,659  
           
Short-Term Securities
BlackRock Liquidity Funds, TempFund,          
Institutional Class, 0.15% (i)(j)   841,364   841,364  
Total Short-Term Securities          
(Cost — $841,364) — 0.4%       841,364  
           
           
Options Purchased   Contracts      
Exchange-Traded Put Options — 0.0%          
S&P 500 Index, Strike Price USD 1,200.00,          
Expires 6/16/12   138   35,880  

Options Purchased   Notional
Amount
(000)
  Value
Over-the-Counter Interest Rate Call Swaptions — 0.1%          
Receive a fixed rate of 2.40% and pay a floating rate          
based on 3-month LIBOR, expires 5/11/12,          
Broker Citibank NA USD  2,700   $ 96  
Receive a fixed rate of 2.61% and pay a floating rate          
based on 3-month LIBOR, expires 4/05/13,          
Broker Citibank NA   5,200   240,832  
Receive a fixed rate of 2.61% and pay a floating rate          
based on 3-month LIBOR, expires 1/13/14,          
Broker Credit Suisse Securities (USA) LLC   500   21,881  
        262,809  
Over-the-Counter Interest Rate Put Swaptions — 0.1%          
Receive a fixed rate of 2.61% and pay a floating rate          
based on 3-month LIBOR, expires 4/05/13,          
Broker Citibank NA   5,200   109,356  
Pay a fixed rate of 2.61% and receive a floating rate          
based on 3-month LIBOR, Expires 1/13/14,          
Broker Credit Suisse Securities (USA) LLC   500   20,162  
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 2/02/17,          
Broker Deutsche Bank AG   2,300   77,197  
        206,715  
Total Options Purchased          
(Cost — $991,810) — 0.2%       505,404  
Total Investments Before Options Written          
(Cost — $291,446,488) — 130.8%       301,845,427  
           
Options Written   Contracts      
Over-the-Counter Call Options — (0.0)%          
S&P 500 Index, Strike Price USD 1,450.00,          
Expires 6/15/12, Broker Deutsche Bank AG   3,500   (25,517 )
Options Written   Notional
Amount
(000)
     
Over-the-Counter Interest Rate Call Swaptions — (0.4)%          
Pay a fixed rate of 4.75% and receive a floating rate          
based on 3-month LIBOR, Expires 3/24/14,          
Broker Citibank NA USD  5,000   (967,336 )
Over-the-Counter Interest Rate Put Swaptions — (0.1)%          
Receive a fixed rate of 1.75% and pay a floating rate          
based on 3-month LIBOR, Expires 8/23/12,          
Broker Deutsche Bank AG   10,800   (14,881 )
Receive a fixed rate of 4.75% and pay a floating rate          
based on 3-month LIBOR, Expires 3/24/14,          
Broker Citibank NA   5,000   (30,291 )
Receive a fixed rate of 6.00% and pay a floating rate          
based on 3-month LIBOR, Expires 2/02/17,          
Broker Deutsche Bank AG   4,600   (68,296 )
        (113,468 )
Total Options Written          
(Premiums Received — $764,470) — (0.5)%       (1,106,321 )
Total Investments, Net of Options Written — 130.3%       300,739,106  
Liabilities in Excess of Other Assets — (30.3)%       (70,016,682 )
Net Assets — 100.0%       $ 230,722,424  

See Notes to Financial Statements.

36SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust III (BPP)

(a)Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.
(b)Variable rate security. Rate shown is as of report date.
(c)All or a portion of security has been pledged as collateral in connection with open reverse repurchase agreements.
(d)Represents a step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown is as of report date.
(e)Security is perpetual in nature and has no stated maturity date.
(f)Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(g)Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(h)Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.
(i)Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate Shares Held at
October 31,
2011
Net
Activity
Shares Held at
April 30,
2012
Income
BlackRock Liquidity        
Funds, TempFund,        
Institutional Class 2,459,914 (1,618,550) 841,364 $ 1,396

(j)Represents the current yield as of report date.
For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Reverse repurchase agreements outstanding as of April 30, 2012 were as follows:
Counterparty Interest
Rate
Trade
Date
Maturity
Date
Net Closing
Amount
  Face
Amount
UBS Securities LLC 0.37% 1/10/12 Open $ 1,732,617   $ 1,730,625
UBS Securities LLC 0.38% 1/10/12 Open 2,046,667   2,044,250
UBS Securities LLC 0.38% 1/12/12 Open 1,537,033   1,535,250
UBS Securities LLC 0.25% 1/25/12 Open 495,584   495,250
UBS Securities LLC (1.25)% 2/02/12 Open 249,240   250,012
Credit Suisse Securities            
(USA) LLC 0.35% 2/15/12 Open 2,001,366   1,999,889
Credit Suisse Securities            
(USA) LLC 0.35% 2/22/12 Open 1,403,441   1,402,500
UBS Securities LLC 0.25% 3/05/12 Open 105,642   105,600
Credit Suisse Securities            
(USA) LLC 0.25% 3/07/12 Open 608,295   608,062
Barclays Capital, Inc. 0.35% 3/08/12 Open 788,414   788,000
Credit Suisse Securities            
(USA) LLC 0.38% 3/13/12 Open 14,484,358   14,476,871
Deutsche Bank AG 0.17% 3/14/12 Open 1,033,734   1,033,500
Credit Suisse Securities            
(USA) LLC 0.30% 3/20/12 Open 2,879,257   2,878,250
Credit Suisse Securities            
(USA) LLC 0.35% 3/20/12 Open 1,472,351   1,471,750
Barclays Capital, Inc. 0.35% 3/21/12 Open 1,601,888   1,601,250
Barclays Capital, Inc. 0.35% 3/22/12 Open 1,342,040   1,341,519
Credit Suisse Securities            
(USA) LLC 0.35% 3/27/12 Open 698,957   698,719
UBS Securities LLC 0.38% 3/27/12 Open 2,163,086   2,162,288
Barclays Capital, Inc. 0.35% 4/03/12 Open 7,496,838   7,494,797
BNP Paribas            
Securities Corp. 0.10% 4/03/12 Open 779,013   778,952
BNP Paribas            
Securities Corp. 0.11% 4/03/12 Open 628,054   628,000
BNP Paribas            
Securities Corp. 0.35% 4/03/12 Open 1,514,412   1,514,000
Barclays Capital, Inc. (1.00)% 4/03/12 Open 318,922   319,170
UBS Securities LLC 0.30% 4/04/12 Open 2,403,941   2,403,400
UBS Securities LLC 0.31% 4/04/12 Open 477,486   477,375
UBS Securities LLC 0.35% 4/04/12 Open 8,704,035   8,701,750
UBS Securities LLC 0.38% 4/04/12 Open 7,758,210   7,756,000
UBS Securities LLC 0.10% 4/16/12 Open 348,015   348,000
Deutsche Bank AG 0.00% 4/24/12 Open 115,700   115,700
Deutsche Bank AG 0.12% 4/24/12 Open 1,889,107   1,889,063
Barclays Capital, Inc. 0.35% 4/25/12 Open 2,072,183   2,072,063
BNP Paribas            
Securities Corp. 0.37% 4/26/12 Open 2,155,111   2,155,000
Deutsche Bank AG 0.25% 4/26/12 Open 648,023   648,000
Total       $ 73,953,020   $ 73,924,855

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201237
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust III (BPP)

Financial futures contracts purchased as of April 30, 2012 were as follows:
Contracts Issue Exchange Expiration Notional
Value
Unrealized
Appreciation
3 2-Year US Chicago Board June      
  Treasury Note of Trade 2012 USD 661,641 $ 688
20 30-Year US Chicago Board June      
  Treasury Bond of Trade 2012 USD 2,857,500 133,717
91 5-Year US Chicago Board June      
  Treasury Note of Trade 2012 USD 11,265,515 48,373
Total           $ 182,778

Financial futures contracts sold as of April 30, 2012 were as follows:
Contracts Issue Exchange Expiration Notional
Value
Unrealized
Depreciation
207 10-Year US Chicago Board June        
  Treasury Note of Trade 2012 USD 27,382,219 $ (366,325)
  48 Ultra Long Term Chicago Board June        
  US Treasury Bond of Trade 2012 USD 7,575,000   (205,820)
Total           $ (572,145)

Credit default swaps on single-name issues — buy protection outstanding as of April 30, 2012 were as follows:
Issuer Pay
Fixed
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Appreciation
(Depreciation)
The New York            
Times Co. 1.00% Barclays Bank Plc 12/20/16 USD 1,725 $ 14,871
Southwest   Goldman Sachs        
Airlines Co. 1.00% & Co. 12/20/16 USD    570 (14,296)
Southwest   Royal Bank of        
Airlines Co. 1.00% Scotland Plc 12/20/16 USD    570 (16,512)
Time   Credit Suisse        
Warner Inc. 1.00% Securities (USA) LLC 3/20/17 USD 3,500 (3,143)
Emerson   Morgan Stanley        
Electric Co. 1.00% & Co., Inc. 3/20/17 USD 1,125 (8,936)
Total           $ (28,016)

Credit default swaps on single-name issues — sold protection outstanding as of April 30, 2012 were as follows:
Issuer Receive
Fixed
Rate
Counter-
party
Expiration Issuer
Credit
Rating1
Notional
Amount
(000)2
Unrealized
Appreciation
(Depreciation)
Aviva USA   Deutsche        
Corp. 1.00% Bank AG 5/25/12 A USD 1,300 $ (17)
DIRECTV   Credit Suisse        
Holdings   Securities        
LLC 1.00% (USA) LLC 3/20/17 BBB USD 3,500 59,047
MetLife, Inc. 1.00% Deutsche        
    Bank AG 3/20/18 A- USD    425 (8,873)
Total           $ 50,157

1Using S&P’s rating.
2The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement.
Credit default swaps on traded indexes — sold protection outstanding as of April 30, 2012 were as follows:
Index Receive
Fixed
Rate
Counter-
party
Expiration Credit
Rating3
Notional
Amount
(000)4
Unrealized
Appreciation
Dow Jones            
CDX North            
America High            
Yield Index   Credit Suisse        
Series 18,   Securities        
Version 1 5.00% (USA) LLC 6/20/17 B+ USD 900 $13,624

3Using S&P’s rating of the underlying securities.
4The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement.
Interest rate swaps outstanding as of April 30, 2012 were as follows:
Fixed
Rate
Floating
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Appreciation
(Depreciation)
1.17%5 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 4/11/17 USD   6,200 $ (26,125)
1.18%5 3-month Deutsche        
  LIBOR Bank AG 4/11/17 USD 10,100 (47,445)
2.12%5 3-month Deutsche        
  LIBOR Bank AG 3/05/22 USD   3,100 (26,789)
4.03%5 3-month          
  LIBOR UBS AG 4/18/22 USD   2,800 (415,305)
2.05%6 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 5/02/22 USD   2,900 968
2.05%6 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 5/02/22 USD   1,900
Total           $ (514,696)

5Fund pays a fixed interest rate and receives floating rate.
6Fund pays a floating interest rate and receives fixed rate.
Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:
Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities
Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)
Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

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

See Notes to Financial Statements.

38SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Schedule of Investments (concluded) BlackRock Credit Allocation Income Trust III (BPP)

The following tables summarize the inputs used as of April 30, 2012 in determining the fair valuation of the Fund’s investments and derivative financial instruments:

Valuation Inputs  Level 1  Level 2  Level 3  Total
Assets:                    
Investments:                    
Long-Term                    
Investments:                    
Asset-Backed Securities          $1,098,500   $1,098,500 
Corporate Bonds      $243,458,905    1,677,812    245,136,717 
Preferred Securities  $623,076    47,165,489        47,788,565 
Taxable Municipal Bonds       2,054,404        2,054,404 
US Government Sponsored                    
Agency Securities       648,134        648,134 
US Treasury Obligations       3,754,467        3,754,467 
Warrants       17,872        17,872 
Short-Term Securities   841,364            841,364 
Total  $1,464,440   $297,099,271   $2,776,312   $301,340,023 
                     
Valuation Inputs   Level 1    Level 2    Level 3    Total 
Derivative Financial Instruments1               
Assets:                    
Equity contracts  $35,880           $35,880 
Interest rate contracts   182,778   $470,492        653,270 
Credit contracts       87,542        87,542 
Liabilities:                    
Equity contracts       (25,517)       (25,517)
Interest rate contracts   (572,145)   (1,596,468)       (2,168,613)
Credit contracts       (51,760)  $(17)   (51,777)
Total  $(353,487)  $(1,115,711)  $(17)  $(1,469,215)

1Derivative financial instruments are swaps, financial futures contracts, and options. Swaps and financial futures contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

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

   Asset-Backed
Securities
  Corporate
Bonds
  Total
Assets:               
Balance, as of October 31, 2011  $1,007,500   $1,690,000   $2,697,500 
Accrued discounts/premiums   9,192        9,192 
Net realized gain (loss)            
Net change in unrealized appreciation/depreciation2   81,808    (12,188)   69,620 
Purchases            
Sales            
Transfers in3            
Transfers out3            
Balance, as of April 30, 2012  $1,098,500   $1,677,812   $2,776,312 

2Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on investments still held at April 30, 2012 was $1,759,621.
3The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the period of the event or the change in circumstances that caused the transfer.

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

   Credit
Contracts
Assets/Liabilities:     
Balance, as of October 31, 2011  $2,351 
Accrued discounts/premiums   4,210 
Net realized gain (loss)    
Net change in unrealized appreciation/depreciation4   (2,368)
Purchases    
Issuances5    
Sales    
Settlements6   (4,210)
Transfers in3    
Transfers out3    
Balance, as of April 30, 2012  $(17)

4Included in the related net change in unrealized appreciation/depreciation in the Statements of operations. The change in unrealized appreciation/depreciation on derivative financial instruments still held at April 30, 2012 was $(2,368).
5Issuances represent upfront cash received on certain derivative financial instruments.
6Settlements represent periodic contractual cash flows and/or cash flows to terminate certain derivative financial instruments.

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

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201239
 

Schedule of Investments April 30, 2012 (Unaudited) BlackRock Credit Allocation Income Trust IV (BTZ)
  (Percentages shown are based on Net Assets)

Asset-Backed Securities   Par
(000)
  Value
321 Henderson Receivables I LLC, Series 2012-1A,        
Class A, 4.21%, 2/16/65 (a) USD 1,713   $ 1,763,318
Atrium CDO Corp., Series 5A, Class A4,        
0.88%, 7/20/20 (a)(b)   4,400   3,718,000
SLM Student Loan Trust, Series 2004-B, Class A2,        
0.67%, 6/15/21 (b)   3,624   3,475,992
Total Asset-Backed Securities — 1.2%       8,957,310
 
Corporate Bonds
Aerospace & Defense — 1.0%        
BE Aerospace, Inc., 8.50%, 7/01/18   3,575   3,959,313
Huntington Ingalls Industries, Inc.:        
6.88%, 3/15/18   990   1,046,925
7.13%, 3/15/21   960   1,016,400
Kratos Defense & Security Solutions, Inc.,        
10.00%, 6/01/17   1,662   1,786,650
        7,809,288
Airlines — 0.7%        
American Airlines Pass-Through Trust, Series 2011-2,        
Class A, 8.63%, 4/15/23   912   962,423
Continental Airlines Pass-Through Certificates,        
Series 2009-2, Class B, 9.25%, 5/10/17   1,865   2,037,569
Delta Air Lines, Inc., Series 02G1, 6.72%, 7/02/24   1,949   2,051,785
        5,051,777
Auto Components — 0.7%        
Delphi Corp., 6.13%, 5/15/21 (a)   950   1,011,750
Icahn Enterprises LP:        
7.75%, 1/15/16   1,180   1,241,950
8.00%, 1/15/18   3,020   3,227,625
        5,481,325
Beverages — 0.5%        
Constellation Brands, Inc., 7.25%, 5/15/17   3,230   3,649,900
Building Products — 0.3%        
Building Materials Corp. of America (a):        
7.00%, 2/15/20   790   843,325
6.75%, 5/01/21   1,560   1,624,350
        2,467,675
Capital Markets — 4.7%        
Ameriprise Financial, Inc., 5.30%, 3/15/20 (c)   4,500   5,031,283
E*Trade Financial Corp., 12.50%, 11/30/17   2,565   2,988,225
The Goldman Sachs Group, Inc.:        
7.50%, 2/15/19 (c)   5,165   5,975,079
5.75%, 1/24/22   2,800   2,923,743
6.25%, 2/01/41 (c)   7,350   7,468,651
Morgan Stanley, 5.50%, 7/28/21 (c)   5,630   5,504,085
Murray Street Investment Trust I, 4.65%, 3/09/17 (d)   1,000   1,006,004
UBS AG:        
2.25%, 1/28/14 (c)   2,678   2,691,896
5.88%, 7/15/16   1,575   1,665,498
        35,254,464
Chemicals — 1.5%        
Ashland, Inc., 9.13%, 6/01/17   75   83,250
Celanese US Holdings LLC, 5.88%, 6/15/21   2,560   2,745,600
Hexion US Finance Corp., 6.63%, 4/15/20 (a)   1,440   1,504,800
Ineos Finance Plc (a):        
8.38%, 2/15/19   535   573,788
7.50%, 5/01/20   1,210   1,243,275
LyondellBasell Industries NV, 5.75%, 4/15/24 (a)   3,125   3,226,562
Solutia, Inc., 7.88%, 3/15/20   1,425   1,663,687
        11,040,962
         
Corporate Bonds   Par
(000)
  Value
Commercial Banks — 4.2%        
Amsouth Bank, Series AI, 4.85%, 4/01/13 USD 1,800   $ 1,827,000
Asciano Finance Ltd., 5.00%, 4/07/18 (a)   1,475   1,535,444
Associated Banc-Corp, 5.13%, 3/28/16   3,645   3,858,899
Branch Banking & Trust Co. (b)(c):        
0.79%, 9/13/16   1,850   1,743,706
0.79%, 5/23/17   1,100   1,025,891
CIT Group, Inc.:        
7.00%, 5/02/16 (a)   2,590   2,596,475
7.00%, 5/02/17 (a)   2,120   2,125,300
5.25%, 3/15/18   1,980   2,039,400
5.50%, 2/15/19 (a)   1,720   1,767,300
Discover Bank, 8.70%, 11/18/19   1,950   2,459,545
HSBC Finance Corp., 6.68%, 1/15/21   2,525   2,726,965
Regions Financial Corp.:        
4.88%, 4/26/13   4,150   4,274,500
5.75%, 6/15/15   3,000   3,165,000
        31,145,425
Commercial Services & Supplies — 4.0%        
Aviation Capital Group Corp. (a):        
7.13%, 10/15/20 (c)   15,000   15,341,991
6.75%, 4/06/21   3,850   3,809,190
Casella Waste Systems, Inc., 7.75%, 2/15/19   1,201   1,182,985
Clean Harbors, Inc., 7.63%, 8/15/16   2,250   2,362,500
Corrections Corp. of America, 7.75%, 6/01/17   4,835   5,245,975
Covanta Holding Corp., 6.38%, 10/01/22   1,105   1,136,617
Iron Mountain, Inc., 7.75%, 10/01/19   650   708,500
Mobile Mini, Inc., 7.88%, 12/01/20   455   486,850
        30,274,608
Communications Equipment — 0.8%        
Avaya, Inc., 9.75%, 11/01/15 (c)   1,400   1,387,750
Brocade Communications Systems, Inc.,        
6.88%, 1/15/20 (c)   3,580   3,911,150
Hughes Satellite Systems Corp., 6.50%, 6/15/19   700   749,000
        6,047,900
Construction Materials — 0.2%        
HD Supply, Inc., 8.13%, 4/15/19 (a)   1,490   1,599,888
Consumer Finance — 5.2%        
American Express Credit Corp., 2.75%, 9/15/15 (c)   9,850   10,220,380
Capital One Bank USA NA, 8.80%, 7/15/19   3,950   4,988,459
Daimler Finance North America LLC, 2.63%, 9/15/16 (a) 5,675   5,868,041
Ford Motor Credit Co. LLC:        
7.00%, 4/15/15   4,730   5,273,950
5.88%, 8/02/21   530   598,947
Inmarsat Finance Plc, 7.38%, 12/01/17 (a)   2,515   2,703,625
SLM Corp., 6.25%, 1/25/16   8,205   8,451,150
Toll Brothers Finance Corp., 5.88%, 2/15/22   680   703,741
        38,808,293
Containers & Packaging — 1.2%        
Ardagh Packaging Finance Plc (a):        
7.38%, 10/15/17   210   227,325
9.13%, 10/15/20   490   530,425
Ball Corp.:        
7.13%, 9/01/16   2,000   2,190,000
6.75%, 9/15/20   3,575   3,950,375
Crown Americas LLC, 6.25%, 2/01/21   1,350   1,468,125
Sealed Air Corp., 8.38%, 9/15/21 (a)   220   249,700
        8,615,950
Diversified Financial Services — 9.3%        
Ally Financial, Inc.:        
4.50%, 2/11/14   1,500   1,515,000
8.30%, 2/12/15   2,890   3,171,775
8.00%, 11/01/31   1,520   1,740,400

See Notes to Financial Statements.

40SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust IV (BTZ)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Diversified Financial Services (concluded)        
Bank of America Corp. (c):        
3.75%, 7/12/16 USD 2,855   $ 2,842,724
5.30%, 3/15/17   6,505   6,784,370
5.00%, 5/13/21   12,100   12,043,372
Citigroup, Inc. (c):        
6.38%, 8/12/14   2,150   2,318,549
4.59%, 12/15/15   1,575   1,649,657
4.45%, 1/10/17   1,520   1,587,797
Countrywide Financial Corp., 6.25%, 5/15/16 (c)   6,500   6,740,285
DPL, Inc., 7.25%, 10/15/21 (a)   1,785   1,981,350
General Motors Financial Co., Inc., 6.75%, 6/01/18   830   883,975
ING Bank NV, 5.00%, 6/09/21 (a)(c)   3,950   4,023,553
Intesa Sanpaolo SpA:        
2.38%, 12/21/12   5,800   5,717,918
6.50%, 2/24/21 (a)(c)   747   678,693
Macquarie Bank Ltd., 5.00%, 2/22/17 (a)(c)   2,325   2,364,120
Moody’s Corp., 6.06%, 9/07/17   10,000   10,516,330
Reynolds Group Issuer, Inc. (a):        
7.13%, 4/15/19   420   438,900
7.88%, 8/15/19   1,370   1,479,600
9.88%, 8/15/19   515   536,888
6.88%, 2/15/21   360   370,800
WMG Acquisition Corp., 9.50%, 6/15/16 (a)   340   371,450
        69,757,506
Diversified Telecommunication Services — 4.4%        
AT&T, Inc. (c):        
2.40%, 8/15/16   1,525   1,586,813
6.30%, 1/15/38   5,000   5,992,390
Level 3 Financing, Inc. (a):        
8.13%, 7/01/19   5,547   5,699,542
8.63%, 7/15/20   1,070   1,120,825
Telecom Italia Capital SA, 6.18%, 6/18/14   1,650   1,703,295
Telefonica Emisiones SAU, 5.46%, 2/16/21   2,250   2,114,629
Verizon Communications, Inc. (c):        
1.95%, 3/28/14   8,525   8,724,093
7.35%, 4/01/39   3,640   4,993,177
Windstream Corp., 7.88%, 11/01/17   990   1,093,950
        33,028,714
Electric Utilities — 3.6%        
CMS Energy Corp., 5.05%, 3/15/22   1,850   1,883,119
Dominion Resources, Inc., 8.88%, 1/15/19   8,000   10,911,568
Duke Energy Corp., 3.55%, 9/15/21 (c)   2,825   2,947,461
Great Plains Energy, Inc., 5.29%, 6/15/22 (d)   2,725   2,978,844
Progress Energy, Inc., 7.00%, 10/30/31 (c)   5,000   6,526,685
Southern Co., 1.95%, 9/01/16   1,625   1,663,012
        26,910,689
Electronic Equipment, Instruments & Components — 0.3%      
Jabil Circuit, Inc., 8.25%, 3/15/18   1,200   1,398,000
NXP BV, 3.22%, 10/15/13 (b)   664   664,000
        2,062,000
Energy Equipment & Services — 3.0%        
Atwood Oceanics, Inc., 6.50%, 2/01/20   185   194,713
Energy Transfer Partners LP, 5.20%, 2/01/22   5,000   5,329,475
Ensco Plc, 4.70%, 3/15/21   3,255   3,551,713
Frac Tech Services LLC, 7.13%, 11/15/18 (a)   1,795   1,853,337
Hornbeck Offshore Services, Inc., 5.88%, 4/01/20 (a)   465   463,838
Key Energy Services, Inc., 6.75%, 3/01/21   1,240   1,277,200
MEG Energy Corp., 6.50%, 3/15/21 (a)   1,580   1,662,950
Oil States International, Inc., 6.50%, 6/01/19   835   883,013
Peabody Energy Corp., 6.25%, 11/15/21 (a)   2,575   2,607,187
Transocean, Inc.:        
6.50%, 11/15/20   1,860   2,136,070
6.38%, 12/15/21   2,300   2,693,284
        22,652,780
         
Corporate Bonds   Par
(000)
  Value
Food & Staples Retailing — 0.6%        
Wal-Mart Stores, Inc. (c):        
5.25%, 9/01/35 USD  2,650   $ 3,044,304
6.20%, 4/15/38   1,225   1,603,167
        4,647,471
Food Products — 0.7%        
Kraft Foods, Inc.:        
6.50%, 8/11/17   1,985   2,408,609
6.13%, 8/23/18   1,990   2,406,907
Smithfield Foods, Inc., 10.00%, 7/15/14   668   781,560
        5,597,076
Gas Utilities — 0.2%        
El Paso Natural Gas Co., 8.63%, 1/15/22   1,150   1,455,504
Health Care Equipment & Supplies — 0.8%        
Fresenius US Finance II, Inc., 9.00%, 7/15/15 (a)   4,250   4,871,563
Teleflex, Inc., 6.88%, 6/01/19   815   872,050
        5,743,613
Health Care Providers & Services — 3.3%        
Aetna, Inc., 6.75%, 12/15/37 (c)   2,025   2,628,910
Aviv Healthcare Properties LP, 7.75%, 2/15/19   765   795,600
HCA, Inc.:        
8.50%, 4/15/19   265   297,297
6.50%, 2/15/20   3,780   4,044,600
7.25%, 9/15/20   4,590   5,083,425
INC Research LLC, 11.50%, 7/15/19 (a)   1,155   1,134,787
inVentiv Health, Inc., 10.00%, 8/15/18 (a)   445   398,962
Tenet Healthcare Corp.:        
10.00%, 5/01/18   2,175   2,512,125
8.88%, 7/01/19   1,825   2,046,281
UnitedHealth Group, Inc., 6.88%, 2/15/38   4,075   5,459,282
        24,401,269
Health Care Technology — 0.9%        
Amgen, Inc.:        
5.15%, 11/15/41 (c)   6,280   6,544,683
5.65%, 6/15/42   70   77,873
        6,622,556
Household Durables — 0.2%        
Standard Pacific Corp., 8.38%, 1/15/21   1,480   1,561,400
Independent Power Producers & Energy Traders — 1.1%        
AES Corp.:        
9.75%, 4/15/16   1,620   1,911,600
7.38%, 7/01/21 (a)   225   250,313
Calpine Corp., 7.25%, 10/15/17 (a)   730   779,275
Energy Future Intermediate Holding Co. LLC,        
10.00%, 12/01/20   3,135   3,460,256
Laredo Petroleum, Inc.:        
9.50%, 2/15/19   485   541,987
7.38%, 5/01/22 (a)   440   455,400
QEP Resources, Inc., 5.38%, 10/01/22   944   944,000
        8,342,831
Insurance — 4.3%        
American International Group, Inc. (c):        
3.80%, 3/22/17   2,500   2,582,045
8.25%, 8/15/18   1,050   1,272,211
6.40%, 12/15/20   4,275   4,910,517
Fairfax Financial Holdings Ltd., 5.80%, 5/15/21 (a)   4,975   4,833,775
Forethought Financial Group, Inc., 8.63%, 4/15/21 (a)   1,625   1,661,907
Genworth Financial, Inc., 7.63%, 9/24/21   1,615   1,594,648
Manulife Financial Corp., 4.90%, 9/17/20   3,650   3,814,188
MPL 2 Acquisition Canco, Inc., 9.88%, 8/15/18 (a)   715   616,687
Principal Financial Group, Inc., 8.88%, 5/15/19   1,145   1,483,019
Prudential Financial, Inc., 6.63%, 12/01/37 (c)   4,075   4,725,647
XL Group Ltd., 5.75%, 10/01/21   4,105   4,539,773
        32,034,417

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201241
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust IV (BTZ)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
IT Services — 0.8%        
Epicor Software Corp., 8.63%, 5/01/19 USD 1,180   $ 1,221,300
Fidelity National Information Services, Inc.,        
5.00%, 3/15/22 (a)   530   530,000
First Data Corp.:        
7.38%, 6/15/19 (a)(c)   1,550   1,584,875
8.25%, 1/15/21 (a)   135   132,975
12.63%, 1/15/21   1,160   1,162,900
SunGard Data Systems, Inc., 7.38%, 11/15/18   1,210   1,291,675
        5,923,725
Life Sciences Tools & Services — 1.6%        
Bio-Rad Laboratories, Inc., 8.00%, 9/15/16   5,480   6,055,400
Life Technologies Corp., 6.00%, 3/01/20   4,800   5,581,272
        11,636,672
Machinery — 0.9%        
Ingersoll-Rand Global Holding Co., Ltd.,        
9.50%, 4/15/14   4,075   4,683,573
UR Financing Escrow Corp. (a):        
5.75%, 7/15/18   389   401,643
7.38%, 5/15/20   995   1,044,750
7.63%, 4/15/22   909   961,267
        7,091,233
Media — 7.3%        
AMC Networks, Inc., 7.75%, 7/15/21 (a)   655   731,963
CCH II LLC, 13.50%, 11/30/16   3,851   4,351,630
Comcast Corp., 6.30%, 11/15/17 (c)   4,075   4,943,044
Cox Communications, Inc., 8.38%, 3/01/39 (a)   4,075   5,850,824
CSC Holdings LLC:        
8.50%, 4/15/14   1,130   1,245,825
8.63%, 2/15/19   1,950   2,213,250
DIRECTV Holdings LLC, 5.00%, 3/01/21 (c)   4,150   4,538,220
DISH DBS Corp., 7.00%, 10/01/13   1,950   2,088,937
Intelsat Jackson Holdings SA, 7.25%, 4/01/19   320   333,600
Intelsat Luxemburg SA:        
11.25%, 2/04/17   1,030   1,068,625
11.50%, 2/04/17 (e)   630   656,775
The Interpublic Group of Cos., Inc., 10.00%, 7/15/17 1,975   2,249,031
Kabel BW Erste Beteiligungs GmbH, 7.50%, 3/15/19 (a) 1,760   1,878,800
News America, Inc., 6.15%, 3/01/37 (c)   4,850   5,387,133
Time Warner Cable, Inc., 6.75%, 6/15/39   4,675   5,637,092
Time Warner, Inc., 7.70%, 5/01/32 (c)   4,900   6,419,750
Unitymedia Hessen GmbH & Co. KG (FKA UPC        
Germany GmbH), 8.13%, 12/01/17 (a)   1,225   1,313,812
Virgin Media Secured Finance Plc, 6.50%, 1/15/18   3,175   3,460,750
        54,369,061
Metals & Mining — 2.0%        
Alcoa, Inc., 5.40%, 4/15/21 (c)   940   987,948
Barrick Gold Corp., 2.90%, 5/30/16 (c)   1,925   2,018,586
Barrick North America Finance LLC, 5.70%, 5/30/41 (c) 2,275   2,506,818
Freeport-McMoRan Copper & Gold, Inc.,        
3.55%, 3/01/22   2,300   2,272,591
Freeport-McMoRan Corp., 7.13%, 11/01/27   3,500   4,319,105
New Gold, Inc., 7.00%, 4/15/20 (a)   215   219,838
Novelis, Inc., 8.75%, 12/15/20   1,610   1,775,025
Teck Resources Ltd., 10.75%, 5/15/19   1,000   1,237,500
        15,337,411
Multi-Utilities — 1.2%        
CenterPoint Energy, Inc.:        
5.95%, 2/01/17   3,600   4,115,671
6.50%, 5/01/18   3,950   4,700,710
        8,816,381
Multiline Retail — 0.8%        
JC Penney Co., Inc., 5.65%, 6/01/20 (c)   6,015   5,834,550
         
Corporate Bonds   Par
(000)
  Value
Oil, Gas & Consumable Fuels — 13.5%        
Anadarko Petroleum Corp.:        
5.95%, 9/15/16 USD  1,686   $ 1,949,259
6.38%, 9/15/17   52   61,797
Berry Petroleum Co., 6.38%, 9/15/22   705   733,200
BP Capital Markets Plc (c):        
5.25%, 11/07/13   2,100   2,234,711
3.88%, 3/10/15   3,085   3,304,211
Buckeye Partners LP, 4.88%, 2/01/21 (c)   1,650   1,704,458
Chesapeake Midstream Partners LP:        
5.88%, 4/15/21   980   931,000
6.13%, 7/15/22   785   755,563
Chesapeake Oilfield Operating LLC,        
6.63%, 11/15/19 (a)   70   65,800
Concho Resources, Inc., 5.50%, 10/01/22   700   700,000
CONSOL Energy, Inc., 6.38%, 3/01/21   745   700,300
Copano Energy LLC, 7.13%, 4/01/21   930   981,150
DCP Midstream LLC, 4.75%, 9/30/21 (a)   2,100   2,267,721
El Paso Pipeline Partners Operating Co. LLC:        
6.50%, 4/01/20   2,525   2,900,455
5.00%, 10/01/21   900   950,803
Enbridge Energy Partners LP, 9.88%, 3/01/19   2,425   3,271,230
Energy XXI Gulf Coast, Inc., 7.75%, 6/15/19   1,700   1,755,250
Enterprise Products Operating LLC, 6.65%, 4/15/18   4,800   5,811,854
Everest Acquisition LLC/Everest Acquisition        
Finance, Inc., 6.88%, 5/01/19 (a)   565   593,250
Forest Oil Corp., 8.50%, 2/15/14   2,055   2,209,125
Kinder Morgan Energy Partners LP:        
6.85%, 2/15/20   4,800   5,805,072
3.95%, 9/01/22   2,500   2,517,618
Kodiak Oil & Gas Corp., 8.13%, 12/01/19 (a)   380   402,800
Linn Energy LLC:        
6.25%, 11/01/19 (a)   1,865   1,837,025
7.75%, 2/01/21   750   791,250
Marathon Petroleum Corp., 3.50%, 3/01/16   2,250   2,360,063
MarkWest Energy Partners LP, 6.25%, 6/15/22   880   926,200
Newfield Exploration Co., 6.88%, 2/01/20   950   1,009,375
Nexen, Inc., 6.40%, 5/15/37   2,270   2,519,736
Oasis Petroleum, Inc.:        
7.25%, 2/01/19   560   593,600
6.50%, 11/01/21   505   515,100
OGX Petroleo e Gas Participacoes SA,        
8.50%, 6/01/18 (a)(c)   2,495   2,588,563
ONEOK Partners LP, 8.63%, 3/01/19   4,075   5,328,955
Petrobras International Finance Co.:        
3.88%, 1/27/16   6,150   6,438,029
5.38%, 1/27/21   3,625   3,970,934
Petrohawk Energy Corp., 10.50%, 8/01/14   1,020   1,132,200
Petroleum Geo-Services ASA, 7.38%, 12/15/18 (a)   865   895,275
Phillips 66, 2.95%, 5/01/17 (a)   1,755   1,800,844
Pioneer Natural Resources Co.:        
6.65%, 3/15/17   1,080   1,225,223
6.88%, 5/01/18   820   965,330
Plains Exploration & Production Co.:        
10.00%, 3/01/16   700   770,000
6.75%, 2/01/22   95   98,800
Precision Drilling Corp., 6.50%, 12/15/21   700   728,000
Premier Oil Plc, 5.00%, 6/09/18   5,650   5,833,625
Range Resources Corp., 6.75%, 8/01/20   1,415   1,535,275
Ruby Pipeline LLC, 6.00%, 4/01/22 (a)   4,900   5,017,257
Samson Investment Co., 9.75%, 2/15/20 (a)   1,000   1,043,750
SandRidge Energy, Inc.:        
7.50%, 3/15/21   330   333,300
8.13%, 10/15/22 (a)   325   337,188
SM Energy Co.:        
6.63%, 2/15/19   365   385,075
6.50%, 11/15/21   570   601,350
Targa Resources Partners LP, 6.88%, 2/01/21   820   856,900

See Notes to Financial Statements.

42SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust IV (BTZ)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Oil, Gas & Consumable Fuels (concluded)        
Tennessee Gas Pipeline Co., 8.00%, 2/01/16 USD 1,376   $ 1,603,996
Western Gas Partners LP, 5.38%, 6/01/21   2,525   2,754,901
The Williams Cos., Inc., 8.75%, 3/15/32   1,175   1,587,573
        100,991,319
Paper & Forest Products — 2.6%        
Boise Paper Holdings LLC:        
9.00%, 11/01/17   480   534,000
8.00%, 4/01/20   1,070   1,179,675
Georgia-Pacific LLC, 8.25%, 5/01/16 (a)   2,375   2,624,375
International Paper Co.:        
7.50%, 8/15/21 (c)   3,950   5,014,726
8.70%, 6/15/38   3,100   4,223,087
7.30%, 11/15/39   4,075   5,042,218
Longview Fibre Paper & Packaging, Inc.,        
8.00%, 6/01/16 (a)   545   550,450
        19,168,531
Pharmaceuticals — 2.5%        
Merck & Co., Inc., 6.50%, 12/01/33 (c)   2,885   3,978,150
Pfizer, Inc., 7.20%, 3/15/39 (c)   6,980   10,319,742
Roche Holdings, Inc., 7.00%, 3/01/39 (a)(c)   3,020   4,286,337
Valeant Pharmaceuticals International,        
6.50%, 7/15/16 (a)   450   466,312
        19,050,541
Real Estate Investment Trusts (REITs) — 2.5%        
AvalonBay Communities, Inc., 6.10%, 3/15/20 (c)   4,075   4,851,907
Developers Diversified Realty Corp.:        
4.75%, 4/15/18   1,025   1,061,976
7.88%, 9/01/20   1,325   1,591,263
ERP Operating LP, 5.75%, 6/15/17   4,080   4,695,937
HCP, Inc., 5.38%, 2/01/21   1,675   1,845,379
UDR, Inc., 4.25%, 6/01/18   2,675   2,842,487
Ventas Realty LP/Ventas Capital Corp., 4.75%, 6/01/21 1,880   1,938,216
        18,827,165
Real Estate Management & Development — 0.4%        
Realogy Corp. (a)(c):        
7.88%, 2/15/19   940   921,200
7.63%, 1/15/20   1,025   1,063,437
Shea Homes LP, 8.63%, 5/15/19 (a)   805   839,213
        2,823,850
Road & Rail — 1.5%        
Avis Budget Car Rental LLC, 8.25%, 1/15/19   180   188,550
Florida East Coast Railway Corp., 8.13%, 2/01/17   320   328,800
The Hertz Corp., 6.75%, 4/15/19   564   588,675
Norfolk Southern Corp., 6.00%, 3/15/2105 (c)   8,500   9,853,931
        10,959,956
Semiconductors & Semiconductor Equipment — 0.5%      
Advanced Micro Devices, Inc., 7.75%, 8/01/20   1,300   1,433,250
KLA-Tencor Corp., 6.90%, 5/01/18   2,208   2,671,704
        4,104,954
Software — 0.1%        
Lawson Software, Inc., 9.38%, 4/01/19 (a)   870   909,150
Specialty Retail — 1.2%        
AutoNation, Inc., 6.75%, 4/15/18   2,775   3,010,875
Limited Brands, Inc., 7.00%, 5/01/20   1,370   1,520,700
QVC, Inc., 7.38%, 10/15/20 (a)   175   191,625
Sally Holdings LLC, 6.88%, 11/15/19 (a)   990   1,054,350
VF Corp., 5.95%, 11/01/17 (c)   2,450   2,924,298
        8,701,848
         
Corporate Bonds   Par
(000)
  Value
Tobacco — 2.6%        
Altria Group, Inc., 10.20%, 2/06/39 USD 6,607   $ 10,585,570
Lorillard Tobacco Co., 3.50%, 8/04/16   4,150   4,348,669
Philip Morris International, Inc., 2.50%, 5/16/16 (c)   4,200   4,416,010
        19,350,249
Wireless Telecommunication Services — 5.3%        
America Movil SAB de CV, 2.38%, 9/08/16   7,455   7,607,947
American Tower Corp.:        
4.50%, 1/15/18   3,200   3,378,992
5.90%, 11/01/21   2,180   2,450,455
Cricket Communications, Inc., 7.75%, 5/15/16   780   820,950
Crown Castle International Corp., 9.00%, 1/15/15   1,185   1,309,425
Crown Castle Towers LLC (a):        
5.50%, 1/15/37   1,975   2,180,627
4.17%, 8/15/37   2,000   2,093,476
6.11%, 1/15/40   2,330   2,660,795
Nextel Communications, Inc., Series E,        
6.88%, 10/31/13   1,040   1,040,000
SBA Tower Trust, 5.10%, 4/15/42 (a)   6,250   6,801,294
Sprint Capital Corp., 6.88%, 11/15/28   1,650   1,233,375
Sprint Nextel Corp. (a):        
9.00%, 11/15/18   3,210   3,535,012
7.00%, 3/01/20   4,390   4,477,800
        39,590,148
Total Corporate Bonds — 105.0%       785,552,025
 
Preferred Securities
Capital Trusts        
Capital Markets — 3.0%        
State Street Capital Trust III, 5.46% (b)(f)   1,740   1,746,821
State Street Capital Trust IV, 1.47%, 6/01/37 (b)   28,195   20,981,958
        22,728,779
Commercial Banks — 5.6%        
Barclays Bank Plc, 7.43% (a)(b)(c)(f)   1,100   1,100,000
BB&T Capital Trust IV, 6.82%, 6/12/77 (b)   15,300   15,453,000
BNP Paribas, 7.20% (a)(b)(c)(f)   2,500   2,150,000
Credit Agricole SA, 8.38% (a)(b)(c)(f)   2,450   2,156,000
Dresdner Funding Trust I, 8.15%, 6/30/31 (a)   3,715   2,990,575
HSBC Capital Funding LP/Jersey Channel Islands,        
10.18% (a)(b)(c)(f)   7,000   9,100,000
National City Preferred Capital Trust I, 12.00% (b)(f)   3,713   3,952,117
Standard Chartered Plc, 7.01% (a)(b)(f)   5,000   4,802,625
        41,704,317
Consumer Finance — 0.2%        
Capital One Capital V, 10.25%, 8/15/39   1,275   1,329,187
Diversified Financial Services — 3.3%        
JPMorgan Chase Capital XXI, Series U,        
1.49%, 2/02/37 (b)   12,875   9,534,169
JPMorgan Chase Capital XXIII, 1.50%, 5/15/47 (b)   20,695   15,314,735
        24,848,904
Electric Utilities — 0.5%        
PPL Capital Funding, 6.70%, 3/30/67 (b)   3,900   3,861,000
Insurance — 8.2%        
Ace Capital Trust II, 9.70%, 4/01/30   4,000   5,467,168
The Allstate Corp., 6.50%, 5/15/67 (b)   4,000   3,910,000
American General Capital II, 8.50%, 7/01/30   300   327,902
American International Group, Inc., 8.18%, 5/15/68 (b)   1,300   1,389,375
Aon Corp., 8.21%, 1/01/27   4,000   4,673,312

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201243
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust IV (BTZ)
  (Percentages shown are based on Net Assets)

Capital Trusts   Par
(000)
  Value  
Insurance (concluded)          
AXA SA, 6.46% (a)(b)(f) USD 6,000   $ 4,875,000  
Chubb Corp., 6.38%, 3/29/67 (b)   4,000   4,095,000  
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(b)   4,000   5,440,000  
Lincoln National Corp., 7.00%, 5/17/66 (b)   4,255   4,127,350  
MetLife, Inc., 6.40%, 12/15/66   4,550   4,450,874  
Mitsui Sumitomo Insurance Co., Ltd.,          
7.00%, 3/15/72 (a)(b)   2,360   2,424,734  
Northwestern Mutual Life Insurance,          
6.06%, 3/30/40 (a)(c)   5,500   6,553,145  
Reinsurance Group of America, 6.75%, 12/15/65 (b)(c)   7,000   6,477,121  
Swiss Re Capital I LP, 6.85% (a)(b)(f)   3,000   2,758,959  
ZFS Finance (USA) (a)(b):          
Trust II, 6.45%, 12/15/65   3,850   3,773,000  
Trust IV, 5.88%, 5/09/62   599   599,749  
        61,342,689  
Oil, Gas & Consumable Fuels — 1.2%          
Enterprise Products Operating LLC, 8.38%, 8/01/66 (b)   4,500   4,882,500  
TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b)   4,000   4,175,568  
        9,058,068  
Total Capital Trusts — 22.0%       164,872,944  
 
Preferred Stocks   Shares      
Auto Components — 0.1%          
Dana Holding Corp., 4.00% (a)   7,000   877,625  
Diversified Financial Services — 0.4%          
Ally Financial, Inc., 7.00% (a)   3,640   3,089,450  
Real Estate Investment Trusts (REITs) — 1.1%          
Sovereign Real Estate Investment Trust, 12.00% (a)   7,000   7,797,020  
Thrifts & Mortgage Finance — 0.0%          
Fannie Mae, 8.25%, Series S (b)(g)   23,000   28,290  
Freddie Mac, 8.38%, Series Z (b)(g)   23,000   28,750  
        57,040  
Wireless Telecommunication Services — 1.6%          
Centaur Funding Corp., 9.08% (a)   10,000   11,850,000  
Total Preferred Stocks — 3.2%       23,671,135  
 
Trust Preferreds — 0.3%
Diversified Financial Services — 0.3%          
GMAC Capital Trust I, Series 2, 8.13% (b)   89,130   2,096,443  
Total Preferred Securities — 25.5%       190,640,522  
 
Taxable Municipal Bonds   Par
(000)
     
City of Chicago Illinois, RB, Build America Bonds,          
6.85%, 1/01/38 USD 5,000   5,618,500  
Metropolitan Transportation Authority, RB, Build America          
Bonds, 6.55%, 11/15/31   4,075   4,998,028  
Total Taxable Municipal Bonds — 1.4%       10,616,528  
 
US Government Sponsored Agency Securities — 0.3%
Agency Obligations — 0.3%          
Fannie Mae, 4.23%, 10/09/19 (c)(h)   2,765   2,226,198  

US Treasury Obligations   Par
(000)
  Value
US Treasury Bonds (c):          
3.75%, 8/15/41 USD 945   $ 1,066,963  
3.13%, 11/15/41   3,935   3,947,297  
US Treasury Notes (c):          
0.88%, 12/31/16   6,377   6,414,867  
0.88%, 1/31/17   6,000   6,031,872  
Total US Treasury Obligations — 2.3%       17,460,999  
Total Long-Term Investments          
(Cost — $978,835,280) — 135.7%       1,015,453,582  
 
Short-Term Securities   Shares      
BlackRock Liquidity Funds, TempFund,          
Institutional Class, 0.15% (i)(j)   2,310,288   2,310,288  
Total Short-Term Securities          
(Cost — $2,310,288) — 0.3%       2,310,288  
 
Options Purchased   Contracts      
Exchange-Traded Put Options — 0.0%          
S&P 500 Index, Strike Price USD 1,200.00,          
Expires 6/16/12   472   122,720  
Options Purchased   Notional
Amount
(000)
     
Over-the-Counter Interest Rate Call Swaptions — 0.1%          
Receive a fixed rate of 2.40% and pay a floating rate          
based on 3-month LIBOR, expires 5/11/12,          
Broker Citibank NA USD  9,100   324  
Receive a fixed rate of 2.61% and pay a floating rate          
based on 3-month LIBOR, expires 4/05/13,          
Broker Citibank NA   17,600   815,123  
Receive a fixed rate of 2.61% and pay a floating rate          
based on 3-month LIBOR, expires 1/13/14,          
Broker Credit Suisse Securities (USA) LLC   1,900   83,149  
        898,596  
Over-the-Counter Interest Rate Put Swaptions — 0.1%          
Receive a fixed rate of 2.61% and pay a floating rate          
based on 3-month LIBOR, expires 4/05/13,          
Broker Citibank NA   17,600   370,126  
Pay a fixed rate of 2.61% and receive a floating rate          
based on 3-month LIBOR, Expires 1/13/14,          
Broker Credit Suisse Securities (USA) LLC   1,900   76,615  
Pay a fixed rate of 4.50% and receive a floating rate          
based on 3-month LIBOR, Expires 2/02/17,          
Broker Deutsche Bank AG   8,000   268,512  
        715,253  
Total Options Purchased          
(Cost — $3,399,654) — 0.2%       1,736,569  
Total Investments Before Options Written          
(Cost — $984,545,222) — 136.2%       1,019,500,439  
 
Options Written   Contracts      
Over-the-Counter Call Options — (0.0)%          
S&P 500 Index, Strike Price USD 1,450.00,          
Expires 6/15/12, Broker Deutsche Bank AG   11,800   (86,029 )

See Notes to Financial Statements.

44SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust IV (BTZ)
  (Percentages shown are based on Net Assets)

Options Written   Notional
Amount
(000)
  Value
Over-the-Counter Interest Rate Call Swaptions — (0.4)%          
Pay a fixed rate of 4.75% and receive a floating rate          
based on 3-month LIBOR, Expires 3/24/14,          
Broker Citibank NA USD  17,000   $ (3,288,942
Over-the-Counter Interest Rate Put Swaptions — (0.1)%          
Receive a fixed rate of 1.75% and pay a floating rate          
based on 3-month LIBOR, Expires 8/23/12,          
Broker Deutsche Bank AG   37,000   (50,982 )
Receive a fixed rate of 4.75% and pay a floating rate          
based on 3-month LIBOR, Expires 3/24/14,          
Broker Citibank NA   17,000   (102,988 )
Receive a fixed rate of 6.00% and pay a floating rate          
based on 3-month LIBOR, Expires 2/02/17,          
Broker Deutsche Bank AG   16,000   (237,552 )
        (391,522 )
Total Options Written          
(Premiums Received — $2,606,390) — (0.5)%       (3,766,493 )
Total Investments, Net of Options Written — 135.7%       1,015,733,946  
Liabilities in Excess of Other Assets — (35.7)%       (267,418,446 )
Net Assets — 100.0%       $ 748,315,500  
             

(a)Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.
(b)Variable rate security. Rate shown is as of report date.
(c)All or a portion of security has been pledged as collateral in connection with open reverse repurchase agreements.
(d)Represents a step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown is as of report date.
(e)Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(f)Security is perpetual in nature and has no stated maturity date.
(g)Non-income producing security.
(h)Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(i)Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate Shares Held at
October 31,
2011
Net
Activity
Shares Held at
April 30,
2012
Income
BlackRock Liquidity        
Funds, TempFund,        
Institutional Class 3,823,108 (1,512,820) 2,310,288 $3,544

(j)Represents the current yield as of report date.
For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Reverse repurchase agreements outstanding as of April 30, 2012 were as follows:
Counterparty Interest
Rate
Trade
Date
Maturity
Date
Net Closing
Amount
Face
Amount
Deutsche Bank AG (0.50)% 1/17/12 Open $ 746,210 $ 747,300
UBS Securities LLC (1.25)% 2/02/12 Open 866,003 868,687
UBS Securities LLC 0.35% 2/07/12 Open 14,787,066 14,775,000
UBS Securities LLC 0.37% 2/07/12 Open 14,062,943 14,050,813
UBS Securities LLC 0.38% 2/07/12 Open 17,466,911 17,451,438
Merrill Lynch 0.04% 2/13/12 Open 6,015,521 6,015,000
Credit Suisse Securities          
(USA) LLC 0.35% 2/14/12 Open 6,206,143 6,201,500
UBS Securities LLC 0.38% 2/17/12 Open 5,463,669 5,459,405
Credit Suisse Securities          
(USA) LLC 0.35% 2/22/12 Open 6,432,437 6,428,125
Barclays Capital, Inc. 0.35% 2/29/12 Open 2,174,810 2,173,500
Credit Suisse Securities          
(USA) LLC 0.35% 3/02/12 Open 1,071,625 1,071,000
UBS Securities LLC 0.25% 3/05/12 Open 356,541 356,400
Credit Suisse Securities          
(USA) LLC (0.25)% 3/07/12 Open 2,637,455 2,638,461
UBS Securities LLC 0.38% 3/12/12 Open 1,595,529 1,594,687
Credit Suisse Securities          
(USA) LLC 0.38% 3/13/12 Open 19,860,048 19,849,781
UBS Securities LLC 0.32% 3/13/12 Open 3,912,203 3,910,500
UBS Securities LLC 0.38% 3/13/12 Open 8,173,225 8,169,000
Deutsche Bank AG 0.08% 3/14/12 Open 3,837,495 3,836,625
Credit Suisse Securities          
(USA) LLC 0.30% 3/20/12 Open 9,779,547 9,776,125
Credit Suisse Securities          
(USA) LLC 0.35% 3/20/12 Open 3,635,184 3,633,700
Barclays Capital, Inc. 0.35% 3/21/12 Open 4,540,340 4,538,531
Barclays Capital, Inc. 0.35% 3/22/12 Open 6,887,115 6,884,438
UBS Securities LLC 0.35% 3/23/12 Open 690,340 690,079
Credit Suisse Securities          
(USA) LLC 0.35% 3/27/12 Open 2,410,195 2,409,375
UBS Securities LLC 0.38% 3/27/12 Open 9,234,460 9,231,050
Barclays Capital, Inc. 0.35% 4/03/12 Open 23,364,523 23,358,163
Barclays Capital, Inc. (1.00)% 4/03/12 Open 1,079,429 1,080,269
UBS Securities LLC 0.10% 4/16/12 Open 1,218,051 1,218,000
Credit Suisse Securities          
(USA) LLC 0.35% 4/18/12 Open 1,515,660 1,515,469
Credit Suisse Securities          
(USA) LLC 0.38% 4/18/12 Open 2,574,581 2,574,227
Credit Suisse Securities          
(USA) LLC 0.35% 4/23/12 Open 1,525,819 1,525,700
UBS Securities LLC 0.34% 4/23/12 Open 4,054,656 4,054,350
BNP Paribas          
Securities Corp. 0.15% 4/24/12 Open 2,198,239 2,198,175
BNP Paribas          
Securities Corp. 0.35% 4/24/12 Open 8,253,562 8,253,000
BNP Paribas          
Securities Corp. 0.37% 4/24/12 Open 17,732,394 17,731,119
BNP Paribas          
Securities Corp. 0.39% 4/24/12 Open 3,262,247 3,262,000
Deutsche Bank AG 0.00% 4/24/12 Open 387,150 387,150

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201245
 

Schedule of Investments (continued) BlackRock Credit Allocation Income Trust IV (BTZ)

Reverse repurchase agreements outstanding as of April 30, 2012 were as follows (concluded):
Counterparty Interest
Rate
Trade
Date
Maturity
Date
Net Closing
Amount
Face
Amount
Deutsche Bank AG 0.12% 4/24/12 Open $ 6,424,977 $ 6,424,828
UBS Securities LLC 0.34% 4/24/12 Open 2,712,429 2,712,250
UBS Securities LLC 0.35% 4/25/12 Open 22,756,141 22,754,813
UBS Securities LLC 0.38% 4/25/12 Open 23,862,161 23,860,650
UBS Securities LLC 0.35% 4/26/12 Open 921,245 921,200
Deutsche Bank AG 0.25% 4/26/12 Open 5,413,688 5,413,500
Total       $ 282,099,967 $ 282,005,383

Financial futures contracts purchased as of April 30, 2012 were as follows:
Contracts Issue Exchange Expiration Notional
Value
Unrealized
Appreciation
  10 2-Year US Chicago Board June      
  Treasury Note of Trade 2012 USD 2,205,469 $ 2,294
  70 30-Year US Chicago Board June      
  Treasury Bond of Trade 2012 USD 10,001,250 468,010
301 5-Year US Chicago Board June      
  Treasury Note of Trade 2012 USD 37,262,859 159,955
Total           $ 630,259

Financial futures contracts sold as of April 30, 2012 were as follows:
Contracts Issue Exchange
Expiration
Notional
Value
Unrealized
Depreciation
764 10-Year US Chicago Board June    
  Treasury Note of Trade 2012 USD 101,062,875 $ (1,648,043)
142 Ultra Long Term Chicago Board June    
  US Treasury Bond Trade 2012 USD 22,409,375 (754,434)
Total       $ (2,402,477)

Credit default swaps on single-name issues — buy protection outstanding as of April 30, 2012 were as follows:
Issuer Pay
Fixed
Rate
Counterparty Expiration
Date
Notional
Amount
(000)
Unrealized
Depreciation
Southwest   Goldman Sachs      
Airlines Co. 1.00% & Co. 12/20/16 USD 1,965 $ (49,284)
Southwest   Royal Bank of      
Airlines Co. 1.00% Scotland Plc 12/20/16 USD 1,965 (56,923)
Time   Credit Suisse      
Warner   Securities      
Inc. 1.00% (USA) LLC 3/20/17 USD 12,300 (11,046)
Total         $ (117,253)

Credit default swaps on single-name issues — sold protection outstanding as of April 30, 2012 were as follows:
Issuer Receive
Fixed
Rate
Counter-
party
Expiration
Date
Issuer
Credit
Rating
1
Notional
Amount
(000)2
Unrealized
Appreciation
(Depreciation)
Aviva USA   Deutsche        
Corp. 1.00% Bank AG 5/25/12 A USD 4,525 $ (59)
DIRECTV   Credit Suisse        
Holdings   Securities        
LLC 1.00% (USA) LLC 3/20/17 BBB USD 12,300 207,508 
MetLife,   Deutsche        
Inc. 1.00% Bank AG 3/20/18 A- USD 1,500 (31,316)
Total           $ 176,133 

1Using S&P’s rating.
2The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement.
Credit default swaps on traded indexes — sold protection outstanding as of April 30, 2012 were as follows:
Index Receive
Fixed
Rate
Counter-
party
Expiration
Date
Credit
Rating
3
Notional
Amount
(000)
4
Unrealized
Appreciation
Dow Jones            
CDX North            
America High            
Yield Index   Credit Suisse        
Series 18,   Securities        
Version 1 5.00% (USA) LLC 6/20/17 B+ USD 3,080 $ 46,622
   
3Using S&P’s rating of the underlying securities.
4The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of agreement.


Interest rate swaps outstanding as of April 30, 2012 were as follows:
Fixed
Rate
Floating
Rate
Counter-
party
Expiration
Date
Notional
Amount
(000)
Unrealized
Appreciation
(Depreciation)
1.17%5 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 4/11/17 USD 20,000 $ (84,273)
1.18%5 3-month Deutsche        
  LIBOR Bank AG 4/11/17 USD 33,000 (155,017)
2.35%5 3-month Deutsche        
  LIBOR Bank AG 3/19/22 USD 10,700 (314,894)
4.06%5 3-month Deutsche        
  LIBOR Bank AG 4/18/22 USD 9,500 (1,435,854)
2.05%6 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 5/02/22 USD 9,800 — 
2.05%6 3-month Credit Suisse        
  LIBOR Securities (USA) LLC 5/02/22 USD 6,500 3,311 
Total           $ (1,986,727)

5Fund pays a fixed interest rate and receives floating rate.
6Fund pays a floating interest rate and receives fixed rate.
Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:
Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities
Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)
Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

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

See Notes to Financial Statements.

46SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Schedule of Investments (concluded) BlackRock Credit Allocation Income Trust IV (BTZ)

The following tables summarize the inputs used as of April 30, 2012 in determining the fair valuation of the Fund’s investments and derivative financial instruments:

Valuation Inputs  Level 1  Level 2  Level 3  Total
Assets:                    
Investments:                    
Long-Term                    
Investments:                    
Asset-Backed Securities      $5,239,310   $3,718,000   $8,957,310 
Corporate Bonds       779,718,400    5,833,625    785,552,025 
Preferred Securities  $2,153,483    188,487,039        190,640,522 
Taxable Municipal Bonds       10,616,528        10,616,528 
US Government Sponsored                    
Agency Securities       2,226,198        2,226,198 
US Treasury Obligations        17,460,999        17,460,999 
Short-Term Securities   2,310,288            2,310,288 
Total  $4,463,771   $1,003,748,474   $9,551,625   $1,017,763,870 
                     
Valuation Inputs   Level 1    Level 2    Level 3    Total 
Derivative Financial Instruments1                    
Assets:                    
Equity contracts  $122,720           $122,720 
Interest rate contracts   630,259   $1,617,160        2,247,419 
Credit contracts       254,130        254,130 
Liabilities:                    
Equity contracts       (86,029)       (86,029)
Interest rate contracts   (2,402,477)   (5,670,502)       (8,072,979)
Credit contracts       (148,569)  $(59)   (148,628)
Total  $(1,649,498)  $(4,033,810)  $(59)  $(5,683,367)

1Derivative financial instruments are swaps, financial futures contracts, foreign currency exchange contracts and options. Swaps, financial futures contracts and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

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

   Asset-Backed
Securities
  Corporate
Bonds
  Total
Assets:               
Balance, as of October 31, 2011  $3,410,000   $5,876,000   $9,286,000 
Accrued discounts/premiums   31,109        31,109 
Net realized gain (loss)            
Net change in unrealized appreciation/depreciation2   276,891    (42,375)   234,516 
Purchases            
Sales            
Transfers in3            
Transfers out3            
Balance, as of April 30, 2012  $3,718,000   $5,833,625   $9,551,625 

2Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on investments still held at April 30, 2012 was $6,110,516.
3The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the period of the event or the change in circumstances that caused the transfer.

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

   Credit
Contracts
Assets:     
Balance, as of October 31, 2011  $8,182 
Accrued discounts/premiums   14,656 
Net realized gain (loss)    
Net change in unrealized appreciation/depreciation4   (8,241)
Purchases    
Issuances5    
Sales    
Settlements6   (14,656)
Transfers in3    
Transfers out3    
Balance, as of April 30, 2012  $(59)

4Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on derivative financial instruments still held at April 30, 2012 was $(8,241).
5Issuances represent upfront cash received on certain derivative financial instruments.
6Settlements represent periodic contractual cash flows and/or cash flows to terminate certain derivative financial instruments.
A reconciliation of Level 3 investments and derivative financial instruments is presented when the Fund had a significant amount of Level 3 investments and derivative financial instruments at the beginning and/or end of the period in relation to net assets.

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201247
 

Consolidated Schedule of Investments April 30, 2012 (Unaudited)

BlackRock Floating Rate Income Trust (BGT)

(Percentages shown are based on Net Assets)

 

Asset-Backed Securities   Par
(000)
  Value
ARES CLO Funds, Series 2005-10A, Class B,        
0.86%, 9/18/17 (a)(b) USD  1,000   $ 937,310
Canaras Summit CLO Ltd., Series 2007-1A, Class B,        
0.95%, 6/19/21 (a)(b)   930   805,566
Chatham Light CLO Ltd., Series 2005-2A, Class A2,        
0.94%, 8/03/19 (a)(b)   1,000   900,000
Flagship CLO, Series 2006-1A, Class B,        
0.82%, 9/20/19 (a)(b)   1,196   935,870
Franklin CLO Ltd., Series 6A, Class B,        
0.97%, 8/09/19 (a)(b)   1,180   1,007,130
Fraser Sullivan CLO Ltd., Series 2012-7A, Class C,        
4.47%, 4/20/23 (a)(b)   575   511,290
Gannett Peak CLO Ltd., Series 2006-1X, Class A2,        
0.83%, 10/27/20 (b)   715   586,300
Goldentree Loan Opportunities VI Ltd., Series 2012-6A,        
Class D, 4.61%, 4/17/22 (a)   950   866,115
Greyrock CDO Ltd., Series 2005-1X, Class A2L,        
0.92%, 11/15/17   1,495   1,296,763
Landmark CDO Ltd., Series 2006-8A, Class B,        
0.83%, 10/19/20 (a)(b)   1,335   1,112,763
MAPS CLO Fund LLC, Series 2005-1A, Class C,        
1.42%, 12/21/17 (a)(b)   705   664,462
Race Point CLO, Series 2012-6A, Class D,        
4.97%, 5/24/23 (a)(b)   675   631,991
Symphony CLO Ltd., Series 2012-9A, Class D,        
4.62%, 4/16/22 (a)(b)   775   708,436
T2 Income Fund CLO Ltd., Series 2007-1A, Class B,        
1.07%, 7/15/19 (a)(b)   815   719,278
Total Asset-Backed Securities — 3.5%       11,683,274
 
Common Stocks (c)   Shares    
Auto Components — 0.8%        
Delphi Automotive Plc (180-day lock)        
(Acquired 11/17/11, cost $500,143)(d)   87,569   2,665,086
Construction & Engineering — 0.0%        
USI United Subcontractors   7,645   15,289
Hotels, Restaurants & Leisure — 0.2%        
BLB Worldwide Holdings, Inc.   50,832   632,858
Metals & Mining — 0.1%        
Euramax International   1,135   329,208
Paper & Forest Products — 0.0%        
Ainsworth Lumber Co. Ltd.   55,255   69,918
Ainsworth Lumber Co. Ltd. (a)   62,685   79,320
        149,238
Software — 0.0%        
Bankruptcy Management Solutions, Inc.   2,947   383
HMH Holdings/EduMedia   115,632   8,673
        9,056
Total Common Stocks — 1.1%       3,800,735
 
Corporate Bonds   Par
(000)
   
Airlines — 0.1%        
American Airlines Pass-Through Trust, Series 2011-2,        
Class A, 8.63%, 4/15/23   335   353,230
Auto Components — 0.7%        
Icahn Enterprises LP:        
7.75%, 1/15/16   1,515   1,594,537
8.00%, 1/15/18   660   705,375
        2,299,912

Corporate Bonds   Par
(000)
  Value
Beverages — 0.7%        
Central European Distribution Corp., 3.32%, 5/15/14 EUR 1,500   $ 1,713,530
Refresco Group BV, 5.06%, 5/15/18 (a)(b)   500   595,665
        2,309,195
Building Products — 0.3%        
Grohe Holding GmbH, 4.88%, 9/15/17 (a)(b)   700   889,527
Capital Markets — 0.1%        
E*Trade Financial Corp., 0.01%, 8/31/19 (a)(e)(f) USD 439   459,304
Chemicals — 0.4%        
Hexion US Finance Corp., 6.63%, 4/15/20 (a)   650   679,250
Ineos Finance Plc (a):        
8.38%, 2/15/19   285   305,663
7.50%, 5/01/20   430   441,825
        1,426,738
Commercial Banks — 1.3%        
CIT Group, Inc., 7.00%, 5/02/17 (a)   400   401,000
VTB Bank OJSC Via VTB Capital SA, 6.88%, 5/29/18   3,940   4,157,527
        4,558,527
Commercial Services & Supplies — 0.2%        
AWAS Aviation Capital Ltd., 7.00%, 10/17/16 (a)   538   557,269
Consumer Finance — 0.3%        
Inmarsat Finance Plc, 7.38%, 12/01/17 (a)   1,015   1,091,125
Containers & Packaging — 0.7%        
Ardagh Packaging Finance Plc:        
7.38%, 10/15/17 (a) EUR 400   558,602
7.38%, 10/15/17   300   418,951
GCL Holdings SCA, 9.38%, 4/15/18 (a)   329   389,770
Smurfit Kappa Acquisitions (a):        
7.25%, 11/15/17   355   498,108
7.75%, 11/15/19   416   589,206
        2,454,637
Diversified Financial Services — 0.5%        
Ally Financial, Inc., 2.69%, 12/01/14 (b) USD 795   754,163
Reynolds Group Issuer, Inc. (a):        
7.13%, 4/15/19   325   339,625
6.88%, 2/15/21   490   504,700
        1,598,488
Diversified Telecommunication Services — 0.2%        
ITC Deltacom, Inc., 10.50%, 4/01/16   530   567,100
Energy Equipment & Services — 0.6%        
Compagnie Generale de Geophysique - Veritas,        
7.75%, 5/15/17   1,795   1,866,800
Health Care Providers & Services — 1.3%        
Crown Newco 3 Plc, 7.00%, 2/15/18 (a) GBP 1,750   2,712,271
HCA, Inc., 6.50%, 2/15/20 USD 1,055   1,128,850
Tenet Healthcare Corp., 6.25%, 11/01/18 (a)   495   514,800
        4,355,921
Hotels, Restaurants & Leisure — 0.3%        
MGM Resorts International, 11.13%, 11/15/17   1,050   1,189,125
Household Durables — 0.4%        
Beazer Homes USA, Inc., 12.00%, 10/15/17   1,135   1,232,184
Berkline/Benchcraft LLC, 4.50%, 11/03/12 (c)(g)   400  
        1,232,184
Independent Power Producers & Energy Traders — 1.1%        
Calpine Corp., 7.25%, 10/15/17 (a)   125   133,437
Energy Future Holdings Corp., 10.00%, 1/15/20   725   789,344
Energy Future Intermediate Holding Co. LLC,        
10.00%, 12/01/20   2,525   2,786,969
        3,709,750

See Notes to Financial Statements.

48SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Consolidated Schedule of Investments (continued) BlackRock Floating Rate Income Trust (BGT)
  (Percentages shown are based on Net Assets)

Corporate Bonds   Par
(000)
  Value
Machinery — 1.1%        
KION Finance SA, 5.01%, 4/15/18 (a)(b) EUR 3,000   $ 3,593,846
UR Financing Escrow Corp., 5.75%, 7/15/18 (a) USD 210   216,825
        3,810,671
Media — 4.0%        
Clear Channel Worldwide Holdings, Inc.:        
9.25%, 12/15/17   501   546,716
Series B, 9.25%, 12/15/17   1,704   1,868,010
Kabel BW Erste Beteiligungs GmbH, 5.13%,        
3/15/18 (a)(b) EUR 2,000   2,667,256
Odeon & UCI Finco Plc, 9.00%, 8/01/18 (a) GBP 914   1,453,664
Unitymedia Hessen GmbH & Co. KG (FKA UPC        
Germany GmbH):        
8.13%, 12/01/17 EUR 500   696,598
8.13%, 12/01/17 (a) USD 2,500   2,681,250
Virgin Media Secured Finance Plc, 7.00%, 1/15/18 GBP 1,197   2,073,737
Ziggo Finance BV, 6.13%, 11/15/17 (a) EUR 1,005   1,410,138
        13,397,369
Metals & Mining — 0.1%        
New World Resources NV, 7.88%, 5/01/18   285   377,255
Oil, Gas & Consumable Fuels — 3.1%        
Coffeyville Resources LLC, 9.00%, 4/01/15 (a) USD 342   365,085
Everest Acquisition LLC/Everest Acquisition Finance, Inc.,        
6.88%, 5/01/19 (a)   440   462,000
Gazprom OAO Via RBS AG, 9.63%, 3/01/13   3,230   3,432,133
KazmunaiGaz Finance Sub BV, 8.38%, 7/02/13   1,500   1,588,110
OGX Petroleo e Gas Participacoes SA,        
8.50%, 6/01/18 (a)   1,600   1,660,000
Petroleos de Venezuela SA, 5.25%, 4/12/17   4,000   3,105,000
        10,612,328
Paper & Forest Products — 0.3%        
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (a)(h)   545   441,635
Longview Fibre Paper & Packaging, Inc.,        
8.00%, 6/01/16 (a)   420   424,200
        865,835
Pharmaceuticals — 0.1%        
Valeant Pharmaceuticals International,        
6.50%, 7/15/16 (a)   235   243,519
Real Estate Management & Development — 0.1%        
Realogy Corp., 7.63%, 1/15/20 (a)   445   461,688
Specialty Retail — 0.2%        
House of Fraser Funding Plc, 8.88%, 8/15/18 (a) GBP 349   519,665
Transportation Infrastructure — 0.4%        
Aguila 3 SA, 7.88%, 1/31/18 (a) CHF 1,100   1,266,457
Wireless Telecommunication Services — 2.8%        
Cricket Communications, Inc., 7.75%, 5/15/16 USD 1,950   2,052,375
iPCS, Inc., 2.67%, 5/01/13 (b)   1,155   1,120,350
Matterhorn Mobile SA, 6.34%, 5/15/19 (b) EUR 3,000   4,030,667
Sprint Nextel Corp. (a):        
9.00%, 11/15/18 USD 790   869,988
7.00%, 3/01/20   1,460   1,489,200
        9,562,580
Total Corporate Bonds — 21.4%       72,036,199
 
Floating Rate Loan Interests (b)
Aerospace & Defense — 1.7%        
DynCorp International, Term Loan B, 6.25%, 7/07/16   491   490,205
SI Organization, Inc., New Term Loan B, 4.50%, 11/22/16 1,080   1,045,746
Spirit Aerosystems, Inc., Term Loan B, 1.00%, 4/18/19   1,085   1,086,628
         
Floating Rate Loan Interests (b)   Par
(000)
  Value
Aerospace & Defense (concluded)        
TransDigm, Inc.:        
Add-On Term Loan B2, 4.00%, 2/14/17 USD 454   $ 454,089
Term Loan (First Lien), 4.00%, 2/14/17   1,975   1,974,388
Wesco Aircraft Hardware Corp., Term Loan B,        
4.25%, 4/07/17   818   818,729
        5,869,785
Airlines — 0.5%        
Delta Air Lines, Inc., Credit New Term Loan B,        
5.50%, 4/20/17   1,640   1,641,269
Auto Components — 3.1%        
Allison Transmission, Inc., Term Loan B, 2.74%, 8/07/14   2,800   2,790,842
Autoparts Holdings Ltd., First Lien Term Loan,        
6.50%, 7/28/17   1,642   1,613,020
Federal-Mogul Corp.:        
Term Loan B, 2.18%, 12/29/14   1,706   1,651,255
Term Loan C, 2.18%, 12/28/15   477   461,192
The Goodyear Tire & Rubber Co., Term Loan        
(Second Lien), 1.00%, 4/30/19   1,785   1,759,332
GPX International Tire Corp. (c)(g):        
14.00%, 3/30/12   4   0.00
12.25%, 3/31/12   274   0.00
Schaeffler AG, Term Loan C2, 6.00%, 1/27/17   1,200   1,203,852
UCI International, Inc., Term Loan, 5.50%, 7/26/17   938   941,061
        10,420,554
Beverages — 0.0%        
Le-Nature’s, Inc, Tranche B Term Loan,        
9.50%, 3/01/11 (c)(g)   1,000   100
Biotechnology — 0.5%        
Grifols SA, Term Loan B, 4.50%, 6/01/17   1,864   1,863,854
Building Products — 2.7%        
Armstrong World Industries, Inc., Term Loan B,        
4.00%, 3/09/18   2,061   2,059,903
CPG International I, Inc., Term Loan B, 6.00%, 2/18/17   2,123   2,031,512
Goodman Global, Inc., Initial Term Loan (First Lien),        
5.75%, 10/28/16   3,714   3,729,466
Momentive Performance Materials, Inc. (Blitz 06-103        
GmbH), Tranche B-2B Term Loan, 3.90%, 5/05/15 EUR 810   1,022,207
United Subcontractors, Inc., Term Loan (First Lien),        
4.58%, 6/30/15 USD 196   176,139
        9,019,227
Capital Markets — 1.5%        
American Capital Ltd., Term Loan B, 7.50%, 12/31/13   168   165,994
HarbourVest Partners LLC, Term Loan (First Lien),        
6.25%, 12/16/16   1,998   2,000,905
Nuveen Investments, Inc.:        
(First Lien) Term Loan, 5.74% – 5.97%, 5/12/17   1,773   1,772,939
(First Lien) Extended Term Loan, 5.97%, 5/13/17   750   750,332
Incremental Term Loan, 7.25%, 5/13/17   425   427,019
        5,117,189
Chemicals — 6.6%        
American Rock Salt Holdings LLC, Term Loan B,        
5.50%, 4/25/17   1,609   1,551,442
Chemtura Corp., Exit Term Loan B, 5.50%, 8/27/16   1,800   1,809,900
Gentek, Inc., Term Loan B, 5.00%, 10/06/15   1,302   1,304,381
Ineos US Finance LLC:        
3 Year Term Loan, 5.50%, 4/27/15   235   235,588
5 Year Term Loan, 6.50%, 4/27/18   6,660   6,684,975
MDI Holdings LLC, Tranche C Term Loan,        
2.60%, 4/11/14 EUR 1,358   1,776,524
Nexeo Solutions LLC, Term Loan B, 5.00%, 9/08/17 USD 1,386   1,355,965
PolyOne Corp., Term Loan, 5.00%, 9/08/17   484   484,997
PQ Corp. (FKA Niagara Acquisition, Inc.), Original Term        
Loan (First Lien), 3.99%, 7/30/14   2,302   2,244,290
Styron Sarl LLC, Term Loan B, 6.00%, 8/02/17   614   572,185

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201249
 

Consolidated Schedule of Investments (continued) BlackRock Floating Rate Income Trust (BGT)
  (Percentages shown are based on Net Assets)

Floating Rate Loan Interests (b)   Par
(000)
  Value
Chemicals (concluded)        
Tronox Worldwide LLC, Term Loan B, 4.25%, 2/08/18 USD 1,705   $ 1,707,370
Univar, Inc., Term Loan B, 5.00%, 6/30/17   2,351   2,354,077
        22,081,694
Commercial Services & Supplies — 3.7%        
ACCO Brands Corp., Term Loan B, 1.00%, 3/08/19   2,185   2,192,276
Altegrity, Inc. (FKA US Investigations Services, Inc.),        
Tranche D Term Loan, 7.75%, 2/20/15   1,825   1,827,076
AWAS Finance Luxembourg Sarl, Term Loan B,        
5.25%, 6/10/16   1,455   1,464,943
Delos Aircraft, Inc., Term Loan 2, 4.75%, 4/12/16   2,175   2,181,808
KAR Auction Services, Inc., Term Loan B,        
5.00%, 5/19/17   2,184   2,193,064
Synagro Technologies, Inc., Term Loan B,        
2.24% – 2.25%, 4/02/14   1,728   1,556,238
Volume Services America, Inc. (FKA Centerplate),        
Term Loan B, 10.50% – 11.75%, 9/16/16   1,207   1,209,267
        12,624,672
Communications Equipment — 2.9%        
Avaya, Inc.:        
Term Loan B1, 3.24%, 10/24/14   1,073   1,053,337
Term Loan B3, 4.99%, 10/26/17   404   390,977
CommScope, Inc., Term Loan B, 4.25%, 1/14/18   1,755   1,754,754
Telesat Canada, Term Loan A, 4.25%, 3/24/17 CAD 6,670   6,532,596
        9,731,664
Construction & Engineering — 0.8%        
BakerCorp. International, Inc., Term Loan B,        
4.75%, 6/01/18 USD 680   679,863
Safway Services LLC, First Out Tranche Loan,        
9.00%, 12/16/17   2,100   2,100,000
        2,779,863
Construction Materials — 1.4%        
HD Supply, Inc., Senior Debt B, 7.25%, 10/12/17   4,745   4,757,622
Consumer Finance — 1.4%        
Springleaf Finance Corp. (FKA AGFS Funding Co.),        
Term Loan, 5.50%, 5/10/17   5,160   4,888,016
Containers & Packaging — 0.8%        
Sealed Air Corp., Term Loan B, 4.75%, 10/03/18   1,606   1,622,082
Smurfit Kappa Acquisitions:        
Term Loan B4, 4.03% – 4.63%, 6/30/16 EUR 456   603,628
Term Loan C4, 4.22% – 4.74%, 3/31/17   450   599,789
        2,825,499
Diversified Consumer Services — 4.2%        
Coinmach Service Corp.:        
Delayed Draw Term Loan, 3.24%, 11/20/14 USD 485   449,400
Term Loan, 3.24%, 11/20/14   2,218   2,055,131
Education Management LLC, Term Loan C3,        
8.25%, 3/29/18   825   823,193
Laureate Education, Inc., Series A, Extended Term Loan,        
5.25%, 8/15/18   4,638   4,576,243
Protection One Alarm Monitoring, Inc., Term Loan,        
5.75%, 3/16/19   1,360   1,360,571
ServiceMaster Co.:        
Delayed Draw Term Loan, 2.74%, 7/24/14   252   248,719
Term Loan, 2.75% – 2.99%, 7/24/14   2,527   2,497,662
Weight Watchers International, Inc., Term Loan F,        
4.00%, 3/12/19   2,315   2,313,820
        14,324,739
Diversified Financial Services — 1.9%        
Reynolds Group Holdings, Inc., Term Loan B,        
6.75%, 2/09/18 EUR 4,897   6,453,317

Floating Rate Loan Interests (b)   Par
(000)
  Value
Diversified Telecommunication Services — 4.3%        
Hawaiian Telcom Communications, Inc., Term Loan B,        
7.00%, 2/28/17 USD 1,470   $ 1,465,708
Integra Telecom Holdings, Inc., Term Loan,        
9.25%, 4/15/15   1,990   1,906,260
Level 3 Financing, Inc.:        
Term Loan B2, 5.75%, 9/03/18   4,600   4,662,100
Term Loan B3, 5.75%, 8/31/18   2,025   2,052,337
Tranche A Term Loan, 2.49% – 2.72%, 3/13/14   2,550   2,530,875
US Telepacific Corp., Term Loan B, 5.75%, 2/23/17   1,908   1,823,317
        14,440,597
Electronic Equipment, Instruments & Components — 1.1%      
CDW LLC (FKA CDW Corp.), Extended Term Loan,        
4.00%, 7/14/17   2,224   2,183,264
Sensata Technologies Finance Co. LLC, Term Loan,        
4.00%, 5/11/18   1,665   1,663,492
        3,846,756
Energy Equipment & Services — 3.4%        
CCS Corp.:        
Incremental Term Loan, 6.50%, 10/17/14   928   930,959
Term Loan B, 3.24%, 11/14/14   1,796   1,752,735
Dynegy Midwest Generation LLC, Coal Co. Term Loan,        
9.25%, 8/04/16   1,139   1,163,485
Dynegy Power LLC, Gas Co. Term Loan, 9.25%, 8/04/16   1,448   1,513,785
MEG Energy Corp., Term Loan B, 4.00%, 3/16/18   6,070   6,073,627
        11,434,591
Food & Staples Retailing — 2.9%        
AB Acquisitions UK Topco 2 Ltd., Facility B1,        
3.57%, 7/09/15 GBP 4,525   6,771,700
Iceland Foods Group Ltd., Term Loan B1,        
6.52%, 4/13/19   1,000   1,614,331
US Foodservice, Inc., Term Loan B, 2.74%, 7/03/14 USD 1,498   1,472,484
        9,858,515
Food Products — 3.9%        
Advance Pierre Foods, Inc.:        
Term Loan (First Lien), 7.00%, 9/30/16   1,633   1,639,347
Term Loan (Second Lien), 11.25%, 9/29/17   1,530   1,540,205
Birds Eye Iglo Group Ltd. (Liberator Midco Ltd.),        
Term Loan B, 5.62%, 4/30/16 EUR 3,000   3,971,101
Del Monte Corp., Term Loan, 4.50%, 3/08/18 USD 2,596   2,578,046
Michaels Foods Group, Inc., Term Loan B,        
4.25%, 2/23/18   312   311,920
Pinnacle Foods Finance LLC:        
Term Loan E, 4.75%, 10/17/18   1,384   1,383,088
Solvest Ltd. (Dole):        
Tranche B-2 Term Loan, 5.00% – 6.00%, 7/06/18   580   582,292
Tranche C-2 Term Loan, 5.00% – 6.00%, 7/06/18   1,038   1,041,997
        13,047,996
Health Care Equipment & Supplies — 1.9%        
Biomet, Inc., Term Loan B, 3.24% – 3.47%, 3/25/15   481   479,238
DJO Finance LLC:        
Extended Term Loan B2, 5.24%, 11/01/16   414   413,015
Term Loan B3, 6.25%, 9/15/17   2,785   2,789,345
Hupah Finance Inc., Term Loan B, 6.25%, 1/21/19   960   968,400
Immucor, Inc., Term Loan B, 7.25%, 8/17/18   1,751   1,767,626
        6,417,624
Health Care Providers & Services — 3.4%        
CHS/Community Health Systems, Inc., Non-Extended        
Delayed Draw Term Loan, 2.49% – 2.74%, 7/25/14   1,126   1,115,583
ConvaTec, Inc., Term Loan, 5.75%, 12/22/16   1,186   1,189,753
DaVita, Inc., Term Loan B, 4.50%, 10/20/16   2,200   2,207,031
Emergency Medical Services, Term Loan,        
5.25%, 5/25/18   1,710   1,714,525

See Notes to Financial Statements.

50SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Consolidated Schedule of Investments (continued) BlackRock Floating Rate Income Trust (BGT)
  (Percentages shown are based on Net Assets)

Floating Rate Loan Interests (b)   Par
(000)
  Value
Health Care Providers & Services (concluded)        
Harden Healthcare LLC:        
Term Loan A, 8.50%, 3/02/15 USD 796   $ 779,845
Tranche A Additional Term Loan, 7.75%, 3/02/15 1,319   1,292,619
inVentiv Health, Inc.:        
Incremental Term Loan B-3, 6.75%, 5/15/18   449   425,221
Term Loan B, 6.50%, 8/04/16   1,451   1,368,008
Medpace, Inc., Term Loan, 6.50% – 7.25%, 6/16/17 1,489   1,444,087
        11,536,672
Health Care Technology — 1.3%        
IMS Health, Inc., Term Loan B, 4.50%, 8/25/17   1,489   1,492,645
Kinetic Concepts, Inc., Term Loan B, 7.00%, 5/04/18 1,751   1,785,625
MedAssets, Inc., Term Loan, 5.25%, 11/16/16   970   974,575
        4,252,845
Hotels, Restaurants & Leisure — 6.1%        
Alpha D2 Ltd., Term Loan B, 5.75%, 4/19/17   390   392,340
Ameristar Casinos, Inc., Term Loan B, 4.00%, 4/13/18 1,543   1,548,327
Boyd Gaming Corp., Incremental Term Loan,        
6.00%, 12/17/15   1,047   1,056,098
Caesars Entertainment Operating Co., Inc.:        
Incremental Term Loan B4, 9.50%, 10/31/16   1,378   1,413,986
Term Loan B1, 3.24%, 1/28/15   738   700,650
Term Loan B3, 3.24%, 1/28/15   4,862   4,614,818
DineEquity, Inc., Term Loan B, 4.25%, 10/19/17   75   75,122
Dunkin’ Brands, Inc., Term Loan B, 4.00%, 11/23/17 2,090   2,092,469
OSI Restaurant Partners LLC:        
Revolver, 2.54% – 2.72%, 6/14/13   38   37,569
Term Loan B, 2.56%, 6/14/14   59   58,276
SeaWorld Parks & Entertainment, Inc., Term Loan B,        
4.00%, 8/17/17   1,174   1,174,444
Six Flags Theme Parks, Inc., Tranche B Term Loan        
(First Lien), 4.25%, 12/20/18   1,885   1,887,620
Station Casinos, Inc., Term Loan B1, 3.24%, 6/17/16 1,191   1,109,256
Twin River Worldwide Holdings, Inc., Term Loan,        
8.50%, 11/05/15   1,254   1,257,935
Wendy’s / Arby’s Restaurants LLC, Term Loan B,        
4.75%, 5/03/19   3,180   3,195,900
        20,614,810
Household Durables — 0.0%        
Berkline/Benchcraft LLC, Term Loan B,        
14.00%, 11/03/13 (c)(g)   159   40,490
Household Products — 0.5%        
Prestige Brands, Inc., Term Loan,        
5.25% – 6.25%, 1/31/19   1,650   1,659,490
Independent Power Producers & Energy Traders — 0.6%      
AES Corp., Term Loan, 4.25%, 6/01/18   1,931   1,932,102
Industrial Conglomerates — 1.7%        
Schrader International, Term Loan B, 5.75%, 4/20/18 620   612,250
Sequa Corp.:        
Incremental Term Loan, 6.25%, 12/03/14   673   675,205
Term Loan, 3.72% – 3.78%, 12/03/14   4,362   4,316,262
        5,603,717
Insurance — 0.7%        
Asurion LLC, Term Loan (First Lien), 5.50%, 5/24/18 801   801,462
CNO Financial Group, Inc., Term Loan B, 6.25%, 9/30/16 1,557   1,562,746
        2,364,208
Internet Software & Services — 0.4%        
Web.com Group, Inc., Term Loan B, 7.00%, 10/27/17 1,206   1,205,291
IT Services — 4.4%        
Ceridian Corp., Term Loan, 3.24%, 11/10/14   1,805   1,725,725
First Data Corp.:        
Extended Term Loan B, 4.24%, 3/23/18   7,440   6,780,695
Term Loan B-1, 2.99%, 9/24/14   1,161   1,110,181
Term Loan B-3, 2.99%, 9/24/14   281   268,532

Floating Rate Loan Interests (b)   Par
(000)
  Value
IT Services (concluded)        
Infogroup Inc., Term Loan, 5.75%, 5/25/18 USD 442   $ 400,050
iPayment, Inc., Term Loan B, 5.75%, 5/08/17   332   333,599
NeuStar, Inc., Term Loan B, 5.00%, 11/08/18   1,095   1,102,249
SunGard Data Systems, Inc. (Solar Capital Corp.),        
Tranche B Term Loan, 3.86% – 4.15%, 2/26/16   271   271,656
TransUnion LLC, Term Loan B, 4.75%, 2/12/18   2,831   2,857,649
        14,850,336
Leisure Equipment & Products — 0.5%        
Eastman Kodak Co., DIP Term Loan B, 8.50%, 7/20/13   560   569,128
Freedom Group, Inc., Term Loan, 5.50%, 4/12/19   1,080   1,088,100
        1,657,228
Machinery — 1.5%        
Rexnord Corp., Term Loan B, 5.00%, 4/02/18   823   828,492
Terex Corp.:        
Term Loan, 6.00%, 4/28/17 EUR 353   465,226
Term Loan B, 5.50%, 4/28/17 USD 1,593   1,603,101
Tomkins LLC, Term Loan B, 4.25%, 9/23/16   1,999   2,004,908
        4,901,727
Media — 19.8%        
Acosta, Inc., Term Loan, 4.75%, 3/01/18   627   626,416
Affinion Group, Inc., Term Loan B, 5.00%, 10/10/16   1,479   1,404,309
AMC Entertainment, Inc., Term Loan B3, 4.25%, 2/22/18 848   845,230
AMC Networks, Inc., Term Loan B, 4.00%, 12/31/18   1,787   1,780,551
Atlantic Broadband Finance LLC, Term Loan (First Lien),        
5.25%, 4/03/19   970   973,638
Bresnan Telecommunications Co. LLC, Term Loan,        
4.50%, 12/14/17   1,550   1,551,200
Capsugel Healthcare Ltd., Term Loan, 5.25%, 8/01/18   1,286   1,298,477
Catalina Marketing Corp., Extended Term Loan B,        
5.74%, 12/13/17   1,440   1,420,123
Cengage Learning Acquisitions, Inc. (FKA Thomson        
Learning):        
Term Loan, 2.49%, 7/03/14   623   569,141
Tranche 1 Incremental Term Loan, 7.50%, 7/03/14   1,115   1,071,065
Cequel Communications LLC, Term Loan B,        
4.00%, 2/11/19   1,345   1,330,608
Charter Communications Operating LLC:        
Term Loan C, 3.72%, 9/06/16   485   484,671
Term Loan D, 4.00%, 4/26/19   189   188,074
Clarke American Corp., Term Facility B,        
2.74% – 2.97%, 6/30/14   320   306,816
Clear Channel Communications, Inc.:        
Term Loan B, 3.89%, 1/28/16   2,850   2,296,724
Term Loan C, 3.89%, 1/28/16   413   322,773
Cumulus Media, Inc., Term Loan, 5.75%, 9/17/18   1,495   1,506,149
EMI Music Publishing Ltd., Term Loan B,        
6.00%, 11/14/17   1,215   1,221,840
Gray Television, Inc., Term Loan B, 3.74%, 12/31/14   1,471   1,460,703
HMH Publishing Co. Ltd., Tranche A Term Loan,        
6.49%, 6/12/14   1,854   1,109,045
Hubbard Broadcasting, Inc., Term Loan B (Second Lien),        
5.25%, 4/28/17   1,022   1,026,673
Intelsat Jackson Holdings SA (FKA Intelsat Jackson        
Holdings, Ltd.), Tranche B Term Loan, 5.25%, 4/02/18 10,148   10,195,092
Interactive Data Corp., Term Loan B, 4.50%, 2/12/18   3,589   3,590,437
Kabel Deutschland GmbH:        
Term Loan A1, 3.90%, 3/31/14 EUR 3,043   4,014,069
Term Loan D, 4.40%, 12/13/16   1,000   1,325,501
Term Loan E, 3.65%, 6/15/18   4,000   5,276,958
Term Loan F, 4.25%, 2/01/19 USD 1,695   1,692,881
Knology, Inc., Term Loan B, 4.00%, 8/18/17   412   411,874
Lavena Holding 4 GmbH (Prosiebensat.1 Media AG):        
Term Loan B, 3.68%, 3/06/15 EUR 304   345,010
Term Loan C, 4.06%, 3/04/16   608   694,042

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201251
 

Consolidated Schedule of Investments (continued) BlackRock Floating Rate Income Trust (BGT)
  (Percentages shown are based on Net Assets)

Floating Rate Loan Interests (b)   Par
(000)
  Value
Media (concluded)        
Liberty Cablevision of Puerto Rico Ltd., Term Loan B,        
2.47%, 6/13/14 USD 1,429   $ 1,405,533
LIN Television Corp., Term Loan B, 5.00%, 12/21/18   868   870,715
Newsday LLC, Fixed Rate Term Loan:        
6.72%, 8/01/13   1,250   1,255,212
10.50%, 8/01/13   1,500   1,538,445
Nielsen Finance LLC, Class B Dollar Term Loan,        
3.99%, 5/02/16   1,706   1,713,317
Serpering Investments BV (Casema NV), Term Loan B,        
3.40%, 3/31/17 EUR 619   817,086
Sinclair Television Group, Inc., Tranche B Term Loan,        
4.00%, 10/28/16 USD 1,408   1,408,311
Univision Communications, Inc., Extended First Lien        
Term Loan, 4.49%, 3/31/17   2,467   2,303,636
UPC Broadband Holding BV, Term Loan U,        
4.42%, 12/29/17 EUR 775   1,006,216
UPC Financing Partnership:        
Term Loan, 4.75%, 12/29/17 USD 680   681,489
Term Loan T, 3.74%, 12/30/16   195   194,025
WC Luxco Sarl, Term Loan B3, 4.25%, 3/15/18   529   529,519
Weather Channel, Term Loan B, 4.25%, 2/13/17   2,556   2,562,018
        66,625,612
Metals & Mining — 2.4%        
Novelis, Inc.:        
Incremental Term Loan B2, 4.00%, 3/10/17   392   391,692
Term Loan, 4.00%, 3/10/17   3,288   3,285,493
SunCoke Energy, Inc., Term Loan B, 4.00%, 7/26/18   844   843,626
Walter Energy, Inc., Term Loan B, 4.00%, 4/02/18   3,416   3,410,114
        7,930,925
Multiline Retail — 2.0%        
99 Cents Only Stores, Term Loan B,        
6.25% – 7.00%, 1/11/19   1,312   1,311,712
HEMA Holding BV:        
Second Lien Term Loan, 5.77%, 1/05/17 EUR 3,800   4,258,802
Term Loan B, 2.42%, 7/06/16   169   211,783
Term Loan C, 3.17%, 7/05/15   169   210,663
The Neiman Marcus Group, Inc., Term Loan,        
4.75%, 5/16/18 USD 750   750,157
        6,743,117
Oil, Gas & Consumable Fuels — 1.9%        
EP Energy Corp., Term Loan B, 6.50%, 4/10/18   935   944,546
EquiPower Resources Holdings LLC, Term Loan B,        
5.75%, 1/26/18   1,903   1,776,333
Gibson Energy, Inc., Term Loan B, 5.75%, 6/15/18   2,184   2,189,876
Obsidian Natural Gas Trust, Term Loan, 7.00%, 11/02/15 1,460   1,470,554
        6,381,309
Paper & Forest Products — 0.2%        
NewPage Corp., DIP Term Loan, 8.00%, 3/07/13   550   554,356
Verso Paper Finance Holdings LLC, Term Loan with        
PIK option, 6.79% – 7.54%, 2/01/13 (h)   426   213,049
        767,405
Pharmaceuticals — 3.8%        
Aptalis Pharma, Inc., Term Loan B, 5.50%, 2/10/17   2,666   2,636,255
Endo Pharmaceuticals Holdings, Inc., Term Loan B,        
4.00%, 6/18/18   433   433,954
Pharmaceutical Product Development, Inc., Term Loan B,        
6.25%, 12/05/18   3,012   3,041,309
Quintiles Transnational Corp., Term Loan B,        
5.00%, 6/08/18   1,310   1,310,506
RPI Finance Trust, Term Loan Tranche 2, 4.00%, 5/09/18   1,090   1,093,408
Taminco Global Chemical Corp., New Term Loan,        
6.25%, 2/15/19   675   679,955
         
Floating Rate Loan Interests (b)   Par
(000)
  Value
Pharmaceuticals (concluded)        
Valeant Pharmaceuticals International, Add-On        
Term Loan B, 3.75%, 2/08/19 USD 2,355   $ 2,343,225
Warner Chilcott Corp.:        
Term Loan B-1, 4.25%, 3/15/18   769   770,210
Term Loan B-2, 4.25%, 3/15/18   385   385,105
        12,693,927
Professional Services — 0.5%        
Emdeon, Inc., Term Loan B, 6.75%, 11/02/18   1,680   1,694,591
Real Estate Investment Trusts (REITs) — 0.8%        
iStar Financial, Inc.:        
Term Loan A1, 5.00%, 6/28/13   2,783   2,778,434
Term Loan A2, 7.00%, 6/30/14   95   95,000
        2,873,434
Real Estate Management & Development — 1.4%        
Realogy Corp.:        
Extended Synthetic Letter of Credit, 3.24%, 10/10/13 68   64,712
Extended Synthetic Letter of Credit, 4.49%, 10/10/16 306   284,881
Extended Term Loan, 4.49%, 10/10/16   4,582   4,259,588
        4,609,181
Road & Rail — 1.4%        
Avis Budget Car Rental LLC, Incremental Term Loan,        
6.25%, 9/21/18   638   642,800
RAC Ltd., Term Loan B, 5.38% – 5.78%, 7/30/18 GBP 1,356   2,168,374
RailAmerica, Inc., Term Loan B, 4.00%, 3/01/19 USD 1,180   1,180,366
Road Infrastructure Investment LLC, Term Loan B,        
5.47%, 3/30/18   625   623,831
        4,615,371
Semiconductors & Semiconductor Equipment — 0.6%        
Freescale Semiconductor, Inc., Extended Term Loan B,        
4.49%, 12/01/16   796   779,627
NXP BV, Term Loan A-2, 5.50%, 3/03/17   1,130   1,130,023
        1,909,650
Software — 2.1%        
Bankruptcy Management Solutions, Inc.:        
Term Loan (First Lien), 7.50%, 8/20/14   719   269,798
Term Loan (Second Lien), 8.30%, 8/20/15   268   7,361
Blackboard, Inc., Term Loan B, 7.50%, 10/04/18   449   445,284
Lawson Software, Term Loan B, 6.25%, 4/05/18   4,750   4,809,375
Sophia LP, Term Loan B, 6.25%, 7/19/18   1,100   1,116,500
Vertafore, Inc., Term Loan B, 5.25%, 7/29/16   339   339,876
        6,988,194
Specialty Retail — 4.5%        
Academy Ltd., Term Loan, 6.00%, 8/03/18   1,895   1,912,345
Bass Pro Group LLC, Term Loan, 5.25%, 6/13/17   1,491   1,492,781
Burlington Coat Factory Warehouse Corp., Term Loan B,        
6.25%, 2/23/17   1,022   1,021,520
Claire’s Stores, Inc., Term Loan B,        
2.99% – 3.30%, 5/29/14   440   419,105
General Nutrition Centers, Inc., Term Loan B,        
4.25%, 3/02/18   1,990   1,994,259
The Gymboree Corp., Term Loan, 5.00%, 2/23/18   243   233,569
Jo-Ann Stores, Inc., Term Loan B, 4.75%, 3/16/18   591   589,768
Michaels Stores, Inc.:        
Extended Term Loan B3, 5.00%, 7/29/16   820   824,050
Term Loan B2, 5.00%, 7/29/16   780   784,095
Petco Animal Supplies, Inc., Term Loan B,        
4.50%, 11/24/17   2,008   2,008,657
Toys ‘R’ Us Delaware, Inc.:        
Incremental Term Loan B2, 5.25%, 5/25/18   496   485,496
Term Loan, 6.00%, 5/25/18   510   497,887
Term Loan B1, 6.00%, 9/01/16   1,065   1,063,927
The Yankee Candle Co., Term Loan B, 5.25%, 4/02/19   1,665   1,675,107
        15,002,566

See Notes to Financial Statements.

52SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Consolidated Schedule of Investments (continued) BlackRock Floating Rate Income Trust (BGT)
  (Percentages shown are based on Net Assets)

Floating Rate Loan Interests (b)   Par
(000)
  Value  
Textiles, Apparel & Luxury Goods — 0.9%          
Ascend Performance Materials LLC, 6.75%, 4/10/18 USD 2,430   $ 2,398,604  
Phillips-Van Heusen Corp., Term Loan B,          
3.75%, 5/06/16 EUR 544   716,400  
        3,115,004  
Wireless Telecommunication Services — 1.9%          
Crown Castle International Corp., Term Loan B,          
4.00%, 1/31/19 USD 1,679   1,678,710  
MetroPCS Wireless, Inc., Term Loan B-3,          
4.00%, 3/16/18   1,057   1,045,771  
Vodafone Americas Finance 2, Inc. (h):          
Term Loan, 6.88%, 8/11/15   2,647   2,686,857  
Term Loan B, 6.25%, 7/11/16   825   833,250  
        6,244,588  
Total Floating Rate Loan Interests — 116.5%       392,258,933  
 
Foreign Agency Obligations
Argentina Bonos:          
0.79%, 8/03/12 (b)   1,250   1,221,000  
7.00%, 10/03/15   2,000   1,785,834  
Colombia Government International Bond,          
4.02%, 3/17/13 (b)   240   243,600  
Uruguay Government International Bond,          
6.88%, 1/19/16 EUR 950   1,441,741  
Total Foreign Agency Obligations — 1.4%       4,692,175  
 
Other Interests (i)   Beneficial
Interest
(000)
     
Auto Components — 0.0%          
Lear Corp. Escrow (c) USD 500   3,750  
Diversified Financial Services — 0.3%          
JG Wentworth LLC Preferred Equity Interests (c)   1   1,176,896  
Hotels, Restaurants & Leisure — 0.0%          
Wembley Contigent (c)   2   7,500  
Household Durables — 0.0%          
Berkline Benchcraft Equity LLC (c)   2    
Total Other Interests — 0.3%       1,188,146  
 
Warrants (j)   Shares      
Chemicals — 0.0%          
British Vita Holdings Co. (Non-Expiring)   166    
Media — 0.0%          
New Vision Holdings LLC:          
(Expires 9/30/14)   3    
(Expires 9/30/14)   19   1  
        1  
Software — 0.0%          
Bankruptcy Management Solutions, Inc. (Expires 9/29/17)   251    
HMH Holdings/EduMedia (Expires 3/09/17)   21,894    
         
Total Warrants — 0.0%       1  
Total Long-Term Investments          
(Cost — $490,017,626) — 144.2%       485,659,463  

Options Purchased Contracts   Value  
Over-the-Counter Call Options — 0.0%        
Marsico Parent Superholdco LLC, Strike Price USD 942.86,        
Expires 12/21/19, Broker Goldman Sachs Bank USA 26    
Total Options Purchased        
(Cost — $25,422) — 0.0%      
Total Investments — 144.2%     $ 485,659,463  
Liabilities in Excess of Other Assets — (44.2)%     (148,839,402 )
Net Assets — 100.0%     $ 336,820,061  
           

(a)Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.
(b)Variable rate security. Rate shown is as of report date.
(c)Non-income producing security.
(d)Restricted security as to resale. As of report date the Fund held 0.8% of its net assets, with a current value of $2,665,086 in this security.
(e)Convertible security.
(f)Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(g)Issuer filed for bankruptcy and/or is in default of interest payments.
(h)Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(i)Other interests represent beneficial interests in liquidation trusts and other reorganization or private entities.
(j)Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.
Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate Shares Held at
October 31,
2011
Net
Activity
Shares Held at
April 30,
2012
Income
BlackRock Liquidity        
Funds, TempFund,        
Institutional Class 1,071,567 (1,071,567) $825

For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Foreign currency exchange contracts as of April 30, 2012 were as follows:
Currency
Purchased
Currency
Sold
Counterparty Settlement
Date
Unrealized
Appreciation
(Depreciation)
USD 321,627 CAD 316,000 Citibank NA 7/18/12 $ 2,291  
USD 6,068,072 CAD 5,975,000 UBS AG 7/18/12 30,016  
USD 1,149,852 CHF 1,055,000 JPMorgan Chase      
        Securities, Inc. 7/18/12 (13,693 )
USD 15,401,243 GBP 9,647,000 UBS AG 7/18/12 (247,493 )
USD 52,981,500 EUR 40,137,500 Citibank NA 7/25/12 (172,940 )
Total           $ (401,819 )

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201253
 

Consolidated Schedule of Investments (concluded) BlackRock Floating Rate Income Trust (BGT)

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

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

The following tables summarize the inputs used as of April 30, 2012 in determining the fair valuation of the Fund’s investments and derivative financial instruments:

Valuation Inputs  Level 1  Level 2  Level 3  Total
Assets:                    
Investments:                    
Long-Term                    
Investments:                    
Asset-Backed Securities      $3,574,917   $8,108,357   $11,683,274 
Common Stocks  $149,238    3,297,944    353,553    3,800,735 
Corporate Bonds       72,036,199        72,036,199 
Floating Rate                     
Loan Interests       366,084,386    26,174,547    392,258,933 
Foreign Agency                    
Obligations       1,685,341    3,006,834    4,692,175 
Other Interests           1,188,146    1,188,146 
Warrants           1    1 
Unfunded Loan                    
Commitments       646        646 
Total  $149,238   $446,679,433   $38,831,438   $485,660,109 
                     
Valuation Inputs   Level 1    Level 2    Level 3    Total 
Derivative Financial Instruments1                    
Assets:                    
Foreign currency                    
exchange contracts      $32,307       $32,307 
Liabilities:                    
Foreign currency                    
exchange contracts       (434,126)       (434,126)
Total      $(401,819)      $(401,819)

1Derivative financial instruments are swaps, financial futures contracts, foreign currency exchange contracts and options. Swaps, financial futures contracts and foreign currency exchange contracts are valued at the unrealized appreciation/ depreciation on the instrument and options are shown at value.

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

   Asset-Backed
Securities
  Common
Stocks
  Floating
Rate Loan
Interests
  Foreign
Agency
Obligations
  Other
Interests
  Warrants  Total
Assets:                                   
Balance, as of October 31, 2011  $6,561,220   $234,634   $32,466,825   $2,961,954   $1,281,000   $227   $43,505,860 
Accrued discounts/ premiums   57,074        73,173    77,415            207,662 
Net realized gain (loss)   (35,410)       (781,119)       182        (816,347)
Net change in unrealized appreciation/ depreciation2   553,892    (221,641)   584,266    (32,535)   (92,854)   (226)   790,902 
Purchases   2,717,831        2,121,822                4,839,653 
Sales   (1,746,250)       (5,739,826)       (182)       (7,486,258)
Transfers in3       340,560    8,720,586                9,061,146 
Transfers out3           (11,271,180)               (11,271,180)
Balance, as of April 30, 2012  $8,108,357   $353,553   $26,174,547   $3,006,834   $1,188,146   $1   $38,831,438 

2Included in the related net change in unrealized appreciation/depreciation in the Statements of Operations. The change in unrealized appreciation/depreciation on investments still held at April 30, 2012 was $(266,753).
3The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the period of the event or the change in circumstances that caused the transfer.

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

See Notes to Financial Statements.

54SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Statements of Assets and Liabilities

April 30, 2012 (Unaudited) BlackRock
Credit
Allocation
Income
Trust I, Inc.
(PSW)
BlackRock
Credit
Allocation
Income
Trust II, Inc.
(PSY)
BlackRock
Credit
Allocation
Income
Trust III
(BPP)
BlackRock
Credit
Allocation
Income
Trust IV
(BTZ)
BlackRock
Floating
Rate
Income
Trust
(BGT)1
Assets
 
Investments at value — unaffiliated2 $ 152,043,139   $ 647,454,359   $ 301,004,063   $ 1,017,190,151   $   485,659,463  
Investments at value — affiliated3   621,268     1,908,035     841,364     2,310,288        
Cash   35,000     174,001     83,578     232,893       292,928  
Cash pledged as collateral for financial futures contracts   282,000     940,000     351,000     1,163,940        
Interest receivable   2,275,203     9,511,089     4,260,680     14,835,086       2,891,359  
Investments sold receivable   101,623     425,940     207,860     705,054       10,839,624  
Foreign currency at value4   126,272     126,089     475     45       7,003,431  
Cash pledged as collateral for swaps   100,000     830,000     891,000     5,590,000        
Swaps premiums paid   36,894     156,478     196,650     181,551        
Unrealized appreciation on foreign currency exchange contracts                     32,307  
Unrealized appreciation on swaps   35,723     156,672     88,510     257,441        
Unrealized appreciation on unfunded loan commitments                     646  
Swaps receivable   10,226     43,850     20,372     88,109        
Dividends receivable   8,925     38,325     20,475     63,700        
Prepaid expenses   8,959     24,083     29,952     47,525       44,781  
Total assets   155,685,232     661,788,921     307,995,979     1,042,665,783       506,764,539  
 
Liabilities
 
Reverse repurchase agreements   42,901,352     179,538,212     73,924,855     282,005,383        
Loan payable                     135,000,000  
Investments purchased payable   304,826     1,297,882     630,765     2,156,391       33,660,194  
Options written at value5   48,027     194,294     1,106,321     3,766,493        
Unrealized depreciation on swaps   361,742     1,546,453     567,441     2,138,666        
Swaps premiums received   180,868     785,107     402,562     1,240,593        
Swaps payable   101,555     448,473     219,982     1,121,746        
Investment advisory fees payable   75,851     320,961     162,212     549,235       253,182  
Cash held as collateral for reverse repurchase agreements       772,000         628,057        
Officer’s and Directors’ fees payable   3,423     120,293     61,387     180,953       130,790  
Unrealized depreciation on foreign currency exchange contracts   1,070     2,375               434,126  
Income dividends payable   27,097     104,943     31,877     229,294        
Interest expense payable   10,355     66,119     27,432     92,355       170,389  
Variation margin payable   16,024     62,370     22,978     82,301        
Deferred income                     8,037  
Other accrued expenses payable   17,370     2,405     115,743     158,816       287,760  
Total liabilities   44,049,560     185,261,887     77,273,555     294,350,283       169,944,478  
Net Assets $ 111,635,672   $ 476,527,034   $ 230,722,424   $ 748,315,500   $   336,820,061  
 
Net Assets Consist of
 
Paid-in capital6,7,8 $ 235,477,660   $ 937,350,272   $ 422,218,171   $ 1,123,084,063   $   428,717,100  
Undistributed net investment income   503,915     3,182,458     905,399     1,356,154       1,844,623  
Accumulated net realized loss   (132,342,917 )   (493,636,691 )   (201,589,952 )   (406,266,387 )     (88,803,323 )
Net unrealized appreciation/depreciation   7,997,014     29,630,995     9,188,806     30,141,670       (4,938,339 )
Net Assets $ 111,635,672   $ 476,527,034   $ 230,722,424   $ 748,315,500   $   336,820,061  
Net asset value $ 10.83   $ 11.68   $ 12.49   $ 14.44   $   14.26  
1 Consolidated Statement of Assets and Liabilities.                                
2 Investments at cost — unaffiliated $ 143,519,809   $ 615,607,941   $ 290,605,124   $ 982,234,934   $   490,043,048  
3 Investments at cost — affiliated $ 621,268   $ 1,908,035   $ 841,364   $ 2,310,288        
4 Foreign currency at cost $ 125,225   $ 125,042   $ 459   $ 43   $   7,043,489  
5 Premiums received $ 66,010   $ 267,430   $ 764,470   $ 2,606,390        
6 Common shares par value per share $ 0.100   $ 0.100   $ 0.001   $ 0.001   $   0.001  
7 Common shares outstanding   10,311,941     40,807,418     18,467,785     51,828,157       23,623,502  
8 Common shares authorized   199,994,540     199,978,000     unlimited     unlimited     unlimited  

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201255
 

Statements of Operations

Six Months Ended April 30, 2012 (Unaudited) BlackRock
Credit
Allocation
Income
Trust I, Inc.
(PSW)
BlackRock
Credit
Allocation
Income
Trust II, Inc.
(PSY)
BlackRock
Credit
Allocation
Income
Trust III
(BPP)
BlackRock
Credit
Allocation
Income
Trust IV
(BTZ)
BlackRock
Floating
Rate
Income
Trust
(BGT)1
Investment Income
 
Interest $ 4,166,335   $ 18,078,167   $ 8,322,992   $   27,650,433   $ 13,530,755  
Dividends — unaffiliated   165,568     237,548     71,706       1,092,243     34,819  
Income — affiliated   926     5,983     3,402       8,943     4,826  
Facility and other fees                     14,869  
Total income   4,332,829     18,321,698     8,398,100       28,751,619     13,585,269  
 
Expenses
 
Investment advisory   464,762     1,958,737     983,125       3,319,108     1,639,638  
Professional   35,930     65,858     39,180       90,610     67,546  
Accounting Services   23,002     49,782     32,876       61,804     28,212  
Custodian   11,066     28,404     15,594       34,162     78,302  
Borrowing costs2                     174,754  
Printing   7,568     22,002     28,480       70,336     21,734  
Officer and Directors   7,084     19,222     10,486       24,740     12,468  
Transfer agent   13,578     19,176     6,168       5,936     6,180  
Registration   4,724     7,090     4,696       8,996     4,728  
Miscellaneous   14,340     34,511     17,874       37,762     34,100  
Total expenses excluding interest expense   582,054     2,204,782     1,138,479       3,653,454     2,067,662  
Interest expense   87,253     350,497     143,528       461,626     522,570  
Total expenses   669,307     2,555,279     1,282,007       4,115,080     2,590,232  
Less fees waived by advisor   (491 )   (1,276 )   (772 )     (1,945 )   (109,701 )
Total expenses after fees waived   668,816     2,554,003     1,281,235       4,113,135     2,480,531  
Net investment income   3,664,013     15,767,695     7,116,865       24,638,484     11,104,738  
 
Realized and Unrealized Gain (Loss)
 
Net realized gain (loss) from:                                
Investments   1,863,917     7,334,532     3,314,200       11,207,494     (395,099 )
Financial futures contracts   (358,576 )   (1,388,225 )   (497,124 )     (1,600,523 )    
Foreign currency transactions   (2,140 )   (12,771 )             1,819,350  
Option written   145,144     618,151     290,100       1,003,630      
Swaps   (640,687 )   (2,751,575 )   (1,247,611 )     (3,920,391 )    
    1,007,658     3,800,112     1,859,565       6,690,210     1,424,251  
Net change in unrealized appreciation/depreciation on:                                
Investments   2,368,239     12,387,567     5,653,576       19,091,940     9,124,638  
Financial futures contracts   (340,848 )   (1,407,481 )   (459,337 )     (1,926,895 )    
Foreign currency transactions   3,806     14,000     (22 )     (2 )   119,373  
Option written   146,292     622,013     215,897       800,104      
Swaps   227,636     999,921     396,504       991,889      
Unfunded loan commitments                     646  
    2,405,125     12,616,020     5,806,618       18,957,036     9,244,657  
Total realized and unrealized gain   3,412,783     16,416,132     7,666,183       25,647,246     10,668,908  
Net Increase in Net Assets Resulting from Operations $ 7,076,796   $ 32,183,827   $ 14,783,048     $ 50,285,730   $ 21,773,646  

1Consolidated Statement of Operations.
2See Note 6 of the Notes to the Financial Statements for details of short-term borrowings.

See Notes to Financial Statements.

56SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Statements of Changes in Net Assets

  BlackRock Credit Allocation
Income Trust I, Inc. (PSW)
  BlackRock Credit Allocation
Income Trust II, Inc. (PSY)
                 
Increase (Decrease) in Net Assets Applicable to Common Shareholders: Six Months
Ended
April 30,
2012
(Unaudited)
Year Ended
October 31,
2011
  Six Months
Ended
April 30,
2012
(Unaudited)
Year Ended
October 31,
2011
Operations
Net investment income $ 3,664,013   $ 7,124,109     $ 15,767,695   $ 29,691,133  
Net realized gain (loss)   1,007,658     (2,345,593 )     3,800,112     (12,706,661 )
Net change in unrealized appreciation/depreciation   2,405,125     (690,779 )     12,616,020     (3,271,622 )
Dividends to Preferred Shareholders from net investment income       (61,138 )         (506,078 )
Net increase in net assets applicable to Common Shareholders resulting from operations   7,076,796     4,026,599       32,183,827     13,206,772  
 
Dividends to Common Shareholders From
Net investment income   (3,970,261 )   (6,305,752 )     (14,935,515 )   (26,912,492 )
 
Net Assets Applicable to Common Shareholders
Total increase (decrease) in net assets applicable to Common Shareholders   3,106,535     (2,279,153 )     17,248,312     (13,705,720 )
Beginning of period   108,529,137     110,808,290       459,278,722     472,984,442  
End of period $ 111,635,672   $ 108,529,137     $ 476,527,034   $ 459,278,722  
Undistributed net investment income $ 503,915   $ 810,163     $ 3,182,458   $ 2,350,278  

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201257
 

Statements of Changes in Net Assets (continued)

  BlackRock Credit Allocation
Income Trust III (BPP)
  BlackRock Credit Allocation
Income Trust IV (BTZ)
Increase (Decrease) in Net Assets Applicable to Common Shareholders: Six Months
Ended
April 30,
2012
(Unaudited)
Year Ended
October 31,
2011
Six Months
Ended
April 30,
2012
(Unaudited)
Year Ended
October 31,
2011
Operations
Net investment income $ 7,116,865   $ 13,010,8514     $ 24,638,484   $ 45,515,474  
Net realized gain (loss)   1,859,565     (3,054,857 )     6,690,210     (10,984,247 )
Net change in unrealized appreciation/depreciation   5,806,618     (3,755,447 )     18,957,036     (17,087,131 )
Dividends to Preferred Shareholders from net investment income       (23,469 )         (646,135 )
Net increase in net assets applicable to Common Shareholders resulting from operations   14,783,048     6,177,078       50,285,730     16,797,961  
 
Dividends to Common Shareholders From
Net investment income   (6,999,291 )   (12,336,480 )     (24,307,405 )   (43,820,706 )
 
Net Assets Applicable to Common Shareholders
Total increase (decrease) in net assets applicable to Common Shareholders   7,783,757     (6,159,402 )     25,978,325     (27,022,745 )
Beginning of period   222,938,667     229,098,069       722,337,175     749,359,920  
End of period $ 230,722,424   $ 222,938,667     $ 748,315,500   $ 722,337,175  
Undistributed net investment income $ 905,399   $ 787,825     $ 1,356,154   $ 1,025,075  

See Notes to Financial Statements.

58SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Statements of Changes in Net Assets (concluded)

  BlackRock
Floating Rate Income Trust (BGT)
Increase (Decrease) in Net Assets Applicable to Common Shareholders: Six Months
Ended
April 30,
2012
(Unaudited)1
Year Ended
October 31,
2011
Operations
Net investment income $ 11,104,738   $ 23,584,991  
Net realized gain (loss)   1,424,251     (3,466,879 )
Net change in unrealized appreciation/depreciation   9,244,657     (6,557,897 )
Dividends to Preferred Shareholders from net investment income       (90,614 )
Net increase in net assets applicable to Common Shareholders resulting from operations   21,773,646     13,469,601  
 
Dividends to Common Shareholders From
Net investment income   (14,879,572 )   (25,653,072 )
 
Capital Share Transactions
Reinvestment of common dividends   95,382     577,941  
 
Net Assets Applicable to Common Shareholders
Total increase (decrease) in net assets applicable to Common Shareholders   6,989,456     (11,605,530 )
Beginning of period   329,830,605     341,436,135  
End of period $ 336,820,061   $ 329,830,605  
Undistributed net investment income $ 1,844,623   $ 5,628,436  

1Consolidated Statement of Changes in Net Assets.

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201259
 

Statements of Cash Flows

Six Months Ended April 30, 2012 (Unaudited) BlackRock
Credit
Allocation
Income
Trust I, Inc.
(PSW)
BlackRock
Credit
Allocation
Income
Trust II, Inc.
(PSY)
BlackRock
Credit
Allocation
Income
Trust III
(BPP)
BlackRock
Credit
Allocation
Income
Trust IV
(BTZ)
BlackRock
Floating
Rate
Income
Trust
(BGT)1
Cash Provided by Operating Activities
 
Net increase in net assets resulting from operations $ 7,076,796   $ 32,183,827   $ 14,783,048   $ 50,285,730   $   21,773,646  
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:                                
(Increase) decrease in interest receivable   84,470     803,325     302,160     1,171,053       (1,278,018 )
Decrease in swap receivable   3,382     18,342     40,709     125,061        
Decrease in other assets   456     89,507     51,943     138,860       106,808  
(Increase) decrease in prepaid expenses   (2,343 )   (8,239 )   (7,047 )   13,906       9,242  
(Increase) decrease in dividends receivable   (6,925 )   (37,989 )   (20,250 )   (63,183 )     418  
Decrease in cash pledged as collateral for reverse repurchase agreements               690,000        
Decrease in cash pledged as collateral for financial futures contracts   235,000     1,306,000     454,000     1,226,000        
(Increase) decrease in cash pledged as collateral for swaps   500,000     440,000     (891,000 )   (240,000 )      
Decrease in investment advisory fees payable   (4,521 )   (14,848 )   (5,805 )   (18,126 )     (25,201 )
Increase (decrease) in interest expense and fees payable   (21,820 )   (77,317 )   (42,481 )   (269,587 )     71,999  
Increase (decrease) in cash held as collateral for reverse repurchase agreements       772,000     (325,000 )   (219,943 )      
Decrease in cash held as collateral for swaps               (700,000 )      
Decrease in other accrued expenses payable   (40,100 )   (128,994 )   (63,460 )   (183,910 )     (132,283 )
Decrease in variation margin payable   (271,272 )   (1,191,185 )   (360,288 )   (1,125,876 )      
Increase in swaps payable   68,897     312,970     147,120     881,672        
Increase in Officer’s and Directors’ fees payable   2,885     29,965     2,942     27,348       21,591  
Increase in deferred income                     8,037  
Net periodic and termination payments of swaps   (347,541 )   (1,527,833 )   (639,005 )   (1,946,023 )      
Net realized and unrealized gain (loss) on investments   (4,071,222 )   (19,142,036 )   (8,545,052 )   (28,865,368 )     (8,876,838 )
Amortization of premium and accretion of discount on investments   222,208     862,780     396,827     1,375,288       (1,174,334 )
Premiums received from options written   434,317     1,863,276     717,641     2,460,786        
Proceeds from sales of long-term investments   38,815,381     156,146,423     71,668,850     252,883,626       131,136,093  
Purchases of long-term investments   (28,996,127 )   (122,091,527 )   (54,912,795 )   (204,801,909 )     (133,477,248 )
Net proceeds from sales (purchases) of short-term securities   741,664     (1,502,327 )   1,618,550     1,512,820       1,071,567  
Premiums paid on closing options written   (352,762 )   (1,532,095 )   (514,470 )   (1,774,467 )      
Cash provided by operating activities   14,070,823     47,574,025     23,857,137     72,583,758       9,235,479  
 
Cash Used for Financing Activities
 
Cash receipts from borrowings   18,287,678     66,934,655     29,924,946     92,652,422       106,000,000  
Cash payments on borrowings   (28,281,507 )   (99,469,580 )   (46,764,354 )   (141,351,227 )     (93,000,000 )
Cash dividends paid to Common Shareholders   (3,970,526 )   (14,955,087 )   (7,004,151 )   (24,304,896 )     (14,831,651 )
Decrease in custodian bank payable                     (67,411 )
Cash used for financing activities   (13,964,355 )   (47,490,012 )   (23,843,559 )   (73,003,701 )     (1,899,062 )
 
Cash Impact from Foreign Exchange Fluctuations
 
Cash impact from foreign exchange fluctuations   2,807     7,798     (22 )   (2 )     (40,058 )
 
Cash and Foreign Currency
 
Net increase (decrease) in cash and foreign currency   109,275     91,811     13,556     (419,945 )     7,296,359  
Cash and foreign currency at beginning of period   51,997     208,279     70,497     652,883        
Cash and foreign currency at end of period $ 161,272   $ 300,090   $ 84,053   $ 232,938   $   7,296,359  
 
Cash Flow Information
 
Cash paid during the year for interest $ 109,073   $ 427,814   $ 186,009   $ 731,213   $   450,571  
 
Noncash Financing Activities
 
Capital shares issued in reinvestment of dividends                 $   95,382  

1Consolidated Statement of Cash Flows.

A Statement of Cash Flows is presented when a Fund has a significant amount of borrowing during the period, based on the average borrowing outstanding in relation to average total assets.

See Notes to Financial Statements.

60SEMI-ANNUAL REPORTAPRIL 30, 2012
 

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

  Six Months
Ended
April 30,
2012
(Unaudited)



Year Ended October 31,
  2011 2010 2009 2008 2007
 
Per Share Operating Performance
Net asset value, beginning of period $ 10.52   $ 10.75   $ 9.31   $ 7.43   $ 19.54   $ 22.25  
Net investment income1   0.35     0.69     0.63     0.86     1.70     2.01  
Net realized and unrealized gain (loss)   0.35     (0.30 )   1.58     2.06     (12.06 )   (2.41 )
Dividends to Preferred Shareholders from net investment income       (0.01 )   (0.06 )   (0.08 )   (0.48 )   (0.71 )
Net increase (decrease) from investment operations   0.70     0.38     2.15     2.84     (10.84 )   (1.11 )
Dividends and distributions to Common Shareholders from:                                    
Net investment income   (0.39 )   (0.61 )   (0.62 )   (0.83 )   (1.22 )   (1.18 )
Tax return of capital           (0.09 )   (0.13 )   (0.05 )   (0.42 )
Total dividends and distributions   (0.39 )   (0.61 )   (0.71 )   (0.96 )   (1.27 )   (1.60 )
Net asset value, end of period $ 10.83   $ 10.52   $ 10.75   $ 9.31   $ 7.43   $ 19.54  
Market price, end of period $ 10.08   $ 9.25   $ 9.67   $ 8.24   $ 7.00   $ 17.29  
 
Total Investment Return Applicable to Common Shareholders2
Based on net asset value   7.14 %3   4.55 %   24.77 %4   46.46 %   (58.09 )%   (5.03 )%
Based on market price   13.41 %3   2.20 %   26.81 %   37.59 %   (55.38 )%   (12.05 )%
 
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses5   1.24 %6   1.14 %   1.16 %   1.61 %   2.00 %   1.32 %
Total expenses after fees waived and paid indirectly5   1.24 %6   1.14 %   1.14 %   1.59 %   2.00 %   1.32 %
Total expenses after fees waived and paid indirectly and                                    
excluding interest expense5   1.08 %6   1.02 %   1.13 %   1.44 %   1.48 %   1.29 %
Net investment income5   6.79 %6   6.56 %   6.28 %   12.45 %   10.79 %   9.38 %
Dividends to Preferred Shareholders       0.06 %   0.59 %   1.09 %   3.03 %   3.29 %
Net investment income to Common Shareholders   6.79 %6   6.50 %   5.69 %   11.36 %   7.76 %   6.09 %
 
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000) $ 111,636   $ 108,529   $ 110,808   $ 96,048   $ 76,430   $ 201,155  
Preferred Shares outstanding at $25,000 liquidation preference,                                    
end of period (000)         $ 40,250   $ 40,250   $ 68,250   $ 136,500  
Borrowings outstanding, end of period (000) $ 42,901   $ 53,268   $ 6,083   $ 4,972   $ 4,024   $ 590  
Average borrowings outstanding during the period (000) $ 47,208   $ 34,952   $ 5,269   $ 5,321   $ 25,692   $ 2,690  
Portfolio turnover   19 %   53 %   66 %   36 %   119 %   88 %
Asset coverage per Preferred Share at $25,000 liquidation                                    
preference, end of period         $ 93,831   $ 84,663   $ 53,009   $ 61,846  
Asset coverage, end of period per $1,000 $ 3,602   $ 3,037                  

1Based on average shares outstanding.
2Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
3Aggregate total investment return.
4Includes proceeds from a settlement of litigation which impacted the Fund. Not including these proceeds the Fund’s total return would have been 24.54%.
5Do not reflect the effect of dividends to Preferred Shareholders.
6Annualized.

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201261
 

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

Six Months
Ended
April 30,
2012
(Unaudited)


Year Ended October 31,
2011 2010 2009 2008 2007
Per Share Operating Performance
Net asset value, beginning of period $ 11.25   $ 11.59   $ 10.03   $ 7.96   $ 19.93   $ 22.36  
Net investment income1   0.39     0.73     0.72     1.11     1.73     2.02  
Net realized and unrealized gain (loss)   0.41     (0.40 )   1.74     2.17     (11.84 )   (2.35 )
Dividends to Preferred Shareholders from net investment income       (0.01 )   (0.06 )   (0.09 )   (0.49 )   (0.73 )
Net increase (decrease) from investment operations   0.80     0.32     2.40     3.19     (10.60 )   (1.06 )
Dividends and distributions to Common Shareholders from:                                    
Net investment income   (0.37 )   (0.66 )   (0.71 )   (1.12 )   (1.15 )   (1.16 )
Tax return of capital           (0.13 )   (0.00 )2   (0.22 )   (0.21 )
Total dividends and distributions   (0.37 )   (0.66 )   (0.84 )   (1.12 )   (1.37 )   (1.37 )
Net asset value, end of period $ 11.68   $ 11.25   $ 11.59   $ 10.03   $ 7.96   $ 19.93  
Market price, end of period $ 10.79   $ 9.74   $ 10.39   $ 8.90   $ 8.10   $ 16.94  
 
Total Investment Return Applicable to Common Shareholders3
Based on net asset value   7.57 %4   3.71 %   25.70 %5   48.36 %   (55.71 )%   (4.35 )%
Based on market price   14.78 %4   0.16 %   26.99 %   29.37 %   (46.97 )%   (9.65 )%
 
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses6   1.11 %7   1.12 %   1.04 %   1.41 %   1.90 %   1.27 %
Total expenses after fees waived and paid indirectly6   1.11 %7   1.12 %   1.03 %   1.41 %   1.90 %   1.27 %
Total expenses after fees waived and paid indirectly and excluding interest expense6   0.96 %7   1.01 %   1.02 %   1.33 %   1.40 %   1.23 %
Net investment income6   6.87 %7   6.42 %   6.66 %   15.05 %   10.71 %   9.29 %
Dividends to Preferred Shareholders       0.11 %   0.58 %   1.19 %   3.04 %   3.34 %
Net investment income to Common Shareholders   6.87 %7   6.31 %   6.08 %   13.86 %   7.67 %   5.95 %
 
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000) $ 476,527   $ 459,279   $ 472,984   $ 409,293   $ 323,132   $ 809,411  
Preferred Shares outstanding at $25,000 liquidation preference,                                    
end of period (000)         $ 169,025   $ 169,025   $ 275,000   $ 550,000  
Borrowings outstanding, end of period (000) $ 179,538   $ 213,033   $ 4,020   $ 9,511   $ 54,369      
Average borrowings outstanding during the period (000) $ 194,349   $ 137,824   $ 13,407   $ 15,842   $ 94,908   $ 14,375  
Portfolio turnover   19 %   50 %   73 %   16 %   120 %   81 %
Asset coverage per Preferred Share at $25,000 liquidation                                    
preference, end of period         $ 94,968   $ 85,547   $ 54,408   $ 61,817  
Asset coverage, end of year per $1,000 $ 3,654   $ 3,156                  

1Based on average shares outstanding.
2Amount is less than $(0.01) per share.
3Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
4Aggregate total investment return.
5Includes proceeds from a settlement of litigation which impacted the Fund. Not including these proceeds the Fund’s total return would have been 25.37%.
6Do not reflect the effect of dividends to Preferred Shareholders.
7Annualized.

See Notes to Financial Statements.

62SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Financial Highlights BlackRock Credit Allocation Income Trust III (BPP)

Six Months
Ended
April 30,
2012
(Unaudited)


Year Ended October 31,
Period
January 1,
2008 to
October 31,
2008


Year Ended December 31,
  2011   2010   2009   2007   2006  
Per Share Operating Performance
Net asset value, beginning of period $ 12.07   $ 12.41   $ 11.05   $ 8.77   $ 19.47   $ 24.52   $ 24.43  
Net investment income   0.38 1   0.70 1   0.73 1   1.09 1   1.48 1   2.05     2.05  
Net realized and unrealized gain (loss)   0.42     (0.37 )   1.48     2.40     (10.74 )   (4.72 )   0.62  
Dividends and distributions to Preferred Shareholders from:                                          
Net investment income       (0.00 )2   (0.01 )   (0.03 )   (0.31 )   (0.62 )   (0.46 )
Net realized gain                           (0.12 )
Net increase (decrease) from investment operations   0.80     0.33     2.20     3.46     (9.57 )   (3.29 )   2.09  
Dividends and distributions to Common Shareholders from:                                          
Net investment income   (0.38 )   (0.67 )   (0.76 )   (0.95 )   (0.83 )   (1.59 )   (1.58 )
Net realized gain                       (0.02 )   (0.42 )
Tax return of capital           (0.08 )   (0.23 )   (0.30 )   (0.15 )    
Total dividends and distributions   (0.38 )   (0.67 )   (0.84 )   (1.18 )   (1.13 )   (1.76 )   (2.00 )
Net asset value, end of period $ 12.49   $ 12.07   $ 12.41   $ 11.05   $ 8.77   $ 19.47   $ 24.52  
Market price, end of period $ 11.43   $ 10.53   $ 11.23   $ 9.94   $ 8.51   $ 17.31   $ 26.31  
 
Total Investment Return Applicable to Common Shareholders3
Based on net asset value   7.12 %4   3.56 %   21.52 %   47.16 %   (51.22 )%4   (13.86 )%   8.89 %
Based on market price   12.37 %4   (0.16 )%   22.25 %   36.42 %   (46.76 )%4   (28.62 )%   17.98 %
 
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses5   1.15 %6   1.05 %   1.09 %   1.66 %   1.96 %6   1.46 %   1.62 %
Total expenses after fees waived and paid indirectly5   1.15 %6   1.05 %   1.08 %   1.64 %   1.96 %6   1.45 %   1.62 %
Total expenses after fees waived and paid indirectly and excluding interest expense5   1.02 %6   0.96 %   1.07 %   1.39 %   1.39 %6   1.24 %   1.25 %
Net investment income5   6.39 %6   5.78 %   6.31 %   13.08 %   10.53 %6   8.90 %   8.46 %
Dividends to Preferred Shareholders       0.01 %   0.10 %   0.38 %   2.19 %6   2.70 %   1.89 %
Net investment income to Common Shareholders   6.39 %6   5.77 %   6.21 %   12.70 %   8.34 %6   6.20 %   6.58 %
 
Supplemental Data
Net assets applicable to Common Shareholders,                                          
end of period (000) $ 230,722   $ 222,939   $ 229,098   $ 204,133   $ 161,311   $ 358,017   $ 449,995  
Preferred Shares outstanding at $25,000 liquidation                                          
preference, end of period (000)         $ 70,425   $ 70,425   $ 110,400   $ 220,800   $ 220,800  
Borrowings outstanding, end of period (000) $ 73,925   $ 92,971       $ 13,235   $ 44,281          
Average borrowings outstanding during the period (000) $ 80,114   $ 51,264   $ 2,121   $ 16,330   $ 51,995   $ 903     1,303  
Portfolio turnover   18 %   48 %   67 %   16 %   121 %   97 %   91 %
Asset coverage per Preferred Share at $25,000                                          
liquidation preference, end of period         $ 106,328   $ 97,465   $ 61,540   $ 65,554   $ 75,965  
Asset coverage, end of period per $1,000 $ 4,121   $ 3,398                      

1Based on average shares outstanding.
2Amount is less than $(0.01) per share.
3Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
4Aggregate total investment return.
5Do not reflect the effect of dividends to Preferred Shareholders.
6Annualized.

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201263
 

Financial Highlights BlackRock Credit Allocation Income Trust IV (BTZ)

Six Months
Ended
April 30,
2012
(Unaudited)



Year Ended October 31,
Period
December 27,
20061 to
October 31,
2007
2011 2010 2009 2008
Per Share Operating Performance
Net asset value, beginning of period $ 13.94   $ 14.46   $ 12.64   $ 10.59   $ 21.39   $ 23.88 2
Net investment income   0.47 3   0.88 3   0.85 3   0.99 3   1.33 3   1.25  
Net realized and unrealized gain (loss)   0.50     (0.54 )   2.14     2.54     (10.06 )   (1.86 )
Dividends to Preferred Shareholders from net investment income       (0.01 )   (0.07 )   (0.07 )   (0.33 )   (0.31 )
Net increase (decrease) from investment operations   0.97     0.33     2.92     3.46     (9.06 )   (0.92 )
Dividends and distributions to Common Shareholders from:                                    
Net investment income   (0.47 )   (0.85 )   (0.81 )   (0.93 )   (0.90 )   (0.93 )
Tax return of capital           (0.29 )   (0.48 )   (0.84 )   (0.47 )
Total dividends and distributions   (0.47 )   (0.85 )   (1.10 )   (1.41 )   (1.74 )   (1.40 )
Capital charge with respect to issuance of:                                    
Common Shares                       (0.04 )
Preferred Shares                       (0.13 )
Total capital charges                       (0.17 )
Net asset value, end of period $ 14.44   $ 13.94   $ 14.46   $ 12.64   $ 10.59   $ 21.39  
Market price, end of period $ 13.26   $ 12.08   $ 13.02   $ 10.96   $ 9.36   $ 18.65  
 
Total Investment Return Applicable to Common Shareholders4
Based on net asset value   7.46 %5   3.28 %   25.16 %   41.06 %   (44.27 )%   (4.42 )%5
Based on market price   13.87 %5   (0.60 )%   29.98 %   38.38 %   (43.51 )%   (20.34 )%5
 
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses6   1.14 %7   1.09 %   1.12 %   1.60 %   1.65 %   1.90 %7
Total expenses after fees waived and paid indirectly6   1.14 %7   1.09 %   1.11 %   1.58 %   1.65 %   1.88 %7
Total expenses after fees waived and paid indirectly                                    
and excluding interest expense6   1.01 %7   0.99 %   1.07 %   1.24 %   1.21 %   1.04 %7
Net investment income6   6.82 %7   6.25 %   6.33 %   9.93 %   7.63 %   6.50 %7
Dividends to Preferred Shareholders       0.09 %   0.50 %   0.74 %   1.89 %   1.64 %7
Net investment income to Common Shareholders   6.82 %7   6.16 %   5.83 %   9.19 %   5.74 %   4.86 %7
 
Supplemental Data
Net assets applicable to Common Shareholders, end of period (000) $ 748,316   $ 722,337   $ 749,360   $ 654,999   $ 548,612   $ 1,108,534  
Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)         $ 231,000   $ 231,000   $ 231,000   $ 462,000  
Borrowings outstanding, end of period (000) $ 282,005   $ 339,303       $ 61,576   $ 223,512   $ 88,291  
Average borrowings outstanding during the period (000) $ 300,482   $ 182,843   $ 63,660   $ 76,521   $ 107,377   $ 96,468  
Portfolio turnover   20 %   54 %   64 %   30 %   126 %   35 %
Asset coverage per Preferred Share at $25,000 liquidation                                    
preference, end of period         $ 106,104   $ 95,892   $ 84,384   $ 89,737  
Asset coverage, end of period per $1,000 $ 3,654   $ 3,129                  

1Commencement of operations.
2Net asset value, beginning of period, reflects a deduction of $1.12 per share sales charge from initial offering price of $25.00 per share.
3Based on average shares outstanding.
4Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
5Aggregate total investment return.
6Do not reflect the effect of dividends to Preferred Shareholders.
7Annualized.

See Notes to Financial Statements.

64SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Financial Highlights BlackRock Floating Rate Income Trust (BGT)

Six Months
Ended
April 30,
2012
(Unaudited)1
Year Ended October 31, Period
January 1,
2008 to
October 31,
2008

Year Ended December 31,
2011 2010 2009 2007 2006
Per Share Operating Performance
Net asset value, beginning of period $ 13.97   $ 14.48   $ 13.29   $ 11.24   $ 17.71   $ 19.11   $ 19.13  
Net investment income   0.47 2   1.00 2   0.97 2   0.98 2   1.42 2   2.03     1.99  
Net realized and unrealized gain (loss)   0.45     (0.42 )   1.09     2.72     (6.62 )   (1.39 )   (0.06 )
Dividends and distributions to Preferred Shareholders from:                                          
Net investment income       (0.00 )3   (0.04 )   (0.04 )   (0.24 )   (0.54 )   (0.48 )
Net realized gain                           (0.01 )
Net increase (decrease) from investment operations   0.92     0.58     2.02     3.66     (5.44 )   0.10     1.44  
Dividends and distributions to Common Shareholders from:                                          
Net investment income   (0.63 )   (1.09 )   (0.83 )   (1.19 )   (1.03 )   (1.14 )   (1.44 )
Net realized gain                           (0.02 )
Tax return of capital               (0.42 )       (0.36 )    
Total dividends and distributions   (0.63 )   (1.09 )   (0.83 )   (1.61 )   (1.03 )   (1.50 )   (1.46 )
Net asset value, end of period $ 14.26   $ 13.97   $ 14.48   $ 13.29   $ 11.24   $ 17.71   $ 19.11  
Market price, end of period $ 14.41   $ 13.00   $ 14.52   $ 12.58   $ 9.63   $ 15.78   $ 19.27  
 
Total Investment Return Applicable to Common Shareholders4
Based on net asset value   6.83 %5   4.03 %   15.55 %   39.51 %   (31.62 )%5   0.98 %   7.93 %
Based on market price   16.01 %5   (3.46 )%   22.41 %   54.14 %   (34.24 )%5   (10.92 )%   21.31 %
 
Ratios to Average Net Assets Applicable to Common Shareholders
Total expenses6   1.58 %7   1.73 %   1.43 %   1.96 %   2.22 %7   1.67 %   1.75 %
Total expenses after fees waived and paid indirectly6   1.51 %7   1.60 %   1.25 %   1.68 %   1.89 %7   1.33 %   1.43 %
Total expenses after fees waived and paid indirectly and excluding interest expense and fees6,8   1.20 %7   1.24 %   1.15 %   1.24 %   1.21 %7   1.16 %   1.19 %
Net investment income6   6.78 %7   6.95 %   7.01 %   8.92 %   10.56 %7   10.83 %   10.38 %
Dividends to Preferred Shareholders       0.03 %   0.27 %   0.38 %   1.75 %7   2.88 %   2.51 %
Net investment income to Common Shareholders   6.78 %7   6.92 %   6.74 %   8.54 %   8.81 %7   7.95 %   7.87 %
 
Supplemental Data
Net assets applicable to Common Shareholders,                                          
end of period (000) $ 336,820   $ 329,831   $ 341,436   $ 312,872   $ 264,590   $ 417,086   $ 449,065  
Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)         $ 58,800   $ 58,800   $ 58,800   $ 243,450   $ 243,450  
Borrowings outstanding, end of period (000) $ 135,000   $ 122,000   $ 38,000   $ 14,000   $ 123,150       $ 26,108  
Average borrowings outstanding during the period (000) $ 110,725   $ 120,334   $ 24,321   $ 53,156   $ 71,780   $ 10,524   $ 19,562  
Portfolio turnover   30 %   89 %   87 %   42 %   25 %   41 %   50 %
Asset coverage per Preferred Share at $25,000                                          
liquidation preference, end of period         $ 170,174   $ 158,029   $ 137,505   $ 67,849   $ 73,810  
Asset coverage, end of period per $1,000 $ 3,495   $ 3,704                      

1Consolidated Financial Highlights.
2Based on average shares outstanding.
3Amount is less than $(0.01) per share.
4Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
5Aggregate total investment return.
6Do not reflect the effect of dividends to Preferred Shareholders.
7Annualized.
8For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense and fees and borrowing costs was 1.09%

See Notes to Financial Statements.

SEMI-ANNUAL REPORTAPRIL 30, 201265
 

Notes to Financial Statements (Unaudited)

1. Organization and Significant Accounting Policies:

BlackRock Credit Allocation Income Trust I, Inc. (“PSW”) and BlackRock Credit Allocation Income Trust II, Inc. (“PSY”) are registered as diversified, closed-end management investment companies under the 1940 Act. BlackRock Credit Allocation Income Trust III (“BPP”), BlackRock Credit Allocation Income Trust IV (“BTZ”) and BlackRock Floating Rate Income Trust (“BGT”) are registered as non-diversified, closed-end management investment companies under the 1940 Act. PSW and PSY are organized as Maryland corporations. BPP, BTZ and BGT are organized as Delaware statutory trusts. PSW, PSY, BPP, BTZ and BGT are collectively referred to as the “Funds” or individually as the “Fund”. The Funds' financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP"), which may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The Boards of Directors and the Boards of Trustees of the Funds are collectively referred to throughout this report as the “Board of Directors” or the “Board”, and the directors/trustees thereof are collectively referred to throughout this report as “Directors”. The Funds determine, and make available for publication the NAVs of their Common Shares on a daily basis.

The following is a summary of significant accounting policies followed by the Funds:

Basis of Consolidation: BGT’s accompanying consolidated financial statements include the account of BGT JGW SPV, LLC (the “Taxable Subsidiary”), a wholly owned taxable subsidiary of BGT. The Taxable Subsidiary enables BGT to hold its investment in J.G. Wentworth LLC Preferred Equity Interests that is organized as an operating partnership and still satisfy Regulated Investment Company (“RIC”) tax requirements. Income earned and gains realized on the investment held by the Taxable Subsidiary are taxable to such subsidiary. An income tax provision for all income, including realized and unrealized gains, if any, is reflected as either a reduction in investment income or as component of realized and unrealized gain (loss) on the Consolidated Statement of Operations. BGT may invest up to 25% of its total assets in the Taxable Subsidiary. Intercompany accounts and transactions have been eliminated. The Taxable Subsidiary is subject to the same investment policies and restrictions that apply to BGT.

Valuation: US GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds fair value their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. The Funds value their bond investments on the basis of last available bid prices or current market quotations provided by dealers or pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more brokers or dealers as obtained from a pricing service. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures. Financial futures contracts traded on exchanges are valued at their last sale price. Swap agreements are valued utilizing quotes received daily by the Funds' pricing service or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. Investments in open-end registered investment companies are valued at NAV each business day. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value.

Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments.

Equity investments traded on a recognized securities exchange or the NASDAQ Global Market System ("NASDAQ") are valued at the last reported sale price that day or the NASDAQ official closing price, if applicable. For equity investments traded on more than one exchange, the last reported sale price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last available bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that such prior day’s price no longer reflects the fair value of the security.

Securities and other assets and liabilities denominated in foreign currencies are translated into US dollars using exchange rates determined as of the close of business on the New York Stock Exchange (“NYSE”). Foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of business on the NYSE. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.

Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that the prior day’s price no longer reflects the fair value of the option. Over-the-counter (“OTC”) options and swaptions are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.

In the event that application of these methods of valuation results in a price for an investment, which is deemed not to be representative of the market value of such investment or if a price is not available, the investment will be valued in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or the sub-advisor seeks to determine the price that each Fund might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value

66SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Notes to Financial Statements (continued)

determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of business on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of business on the NYSE that may not be reflected in the computation of each Fund's net assets. If events (for example, a company announcement, market volatility or a natural disaster) occur during such periods that are expected to materially affect the value of such instruments, those instruments may be Fair Value Assets and be valued at their fair value, as determined in good faith by the investment advisor using a pricing service and/or policies approved by the Board. Each business day, the Funds use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and OTC options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of business on the NYSE, which follows the close of the local markets.

Foreign Currency Transactions: The Funds' books and records are maintained in US dollars. Purchases and sales of investment securities are recorded at the rates of exchange prevailing on the respective date of such transactions. Generally, when the US dollar rises in value against a foreign currency, the Funds' investments denominated in that currency will lose value because that currency is worth fewer US dollars; the opposite effect occurs if the US dollar falls in relative value.

The Funds do not isolate the portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of investments held or sold for financial reporting purposes. Accordingly, the effects of changes in foreign currency exchange rates on investments are not segregated on the Statements of Operations from the effects of changes in market prices of those investments but are included as a component of net realized and unrealized gain (loss) from investments. The Funds report realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.

Asset-Backed and Mortgage-Backed Securities: The Funds may invest in asset-backed securities. Asset-backed securities are generally issued as pass-through certificates, which represent undivided fractional ownership interests in an underlying pool of assets, or as debt instruments, which are also known as collateralized obligations, and are generally issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. The yield characteristics of certain asset-backed securities may differ from traditional debt securities. One such major difference is that all or a principal part of the obligations may be prepaid at any time because the underlying assets (i.e., loans) may be prepaid at any time. As a result, a decrease in interest rates in the market may result in increases in the level of prepayments as borrowers, particularly mortgagors, refinance and repay their loans. An increased prepayment rate with respect to an asset-backed security subject to such a prepayment feature will have the effect of shortening the maturity of the security. If the Funds have purchased such an asset-backed security at a premium, a faster than anticipated prepayment rate could result in a loss of principal to the extent of the premium paid.

The Funds may purchase certain mortgage pass-through securities. There are a number of important differences among the agencies and instrumentalities of the US government that issue mortgage-related securities and among the securities that they issue. For example, mortgage-related securities guaranteed by Ginnie Mae are guaranteed as to the timely payment of principal and interest by Ginnie Mae and such guarantee is backed by the full faith and credit of the United States. However, mortgage-related securities issued by Freddie Mac and Fannie Mae, including Freddie Mac and Fannie Mae guaranteed Mortgage Pass-Through Certificates, which are solely the obligations of Freddie Mac and Fannie Mae, are not backed by or entitled to the full faith and credit of the United States but are supported by the right of the issuer to borrow from the Treasury.

Collateralized Debt Obligations: The Funds may invest in collateralized debt obligations (“CDOs”), which include collateralized bond obligations (“CBOs”) and collateralized loan obligations (“CLOs”). CBOs and CLOs are types of asset-backed securities. A CDO is a bankruptcy remote entity which is backed by a diversified pool of debt securities (CBOs) or syndicated bank loans (CLOs). The cash flows of the CDO can be split into multiple segments, called “tranches”, which will vary in risk profile and yield. The riskiest segment is the subordinated or “equity” tranche. This tranche bears the greatest risk of defaults from the underlying assets in the CDO and serves to protect the other, more senior, tranches from default in all but the most severe circumstances. Since it is shielded from defaults by the more junior tranches, a “senior” tranche will typically have higher credit ratings and lower yields than their underlying securities, and often receive investment grade ratings from one or more of the nationally recognized rating agencies. Despite the protection from the more junior tranches, senior tranches can experience substantial losses due to actual defaults, increased sensitivity to future defaults and the disappearance of one or more protecting tranches as a result of changes in the credit profile of the underlying pool of assets.

Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.

Capital Trusts: The Funds may invest in capital trusts. These securities are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured as either fixed or adjustable coupon securities that can have

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Notes to Financial Statements (continued)

either a perpetual or stated maturity date. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market. Payments on these securities are treated as interest rather than dividends for federal income tax purposes. These securities generally are rated below that of the issuing company’s senior debt securities.

Preferred Stock: The Funds may invest in preferred stocks. Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well) but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

Floating Rate Loan Interests: The Funds may invest in floating rate loan interests. The floating rate loan interests the Funds hold are typically issued to companies (the “borrower”) by banks, other financial institutions, and privately and publicly offered corporations (the “lender”). Floating rate loan interests are generally non-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Funds may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally the lending rate offered by one or more European banks, such as LIBOR (London Interbank Offered Rate), the prime rate offered by one or more US banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. The Funds consider these investments to be investments in debt securities for purposes of their investment policies.

When the Fund purchases a floating rate loan interest it may receive a facility fee and when it sells a floating rate loan interest it may pay a facility fee. On an ongoing basis, the Funds may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by the Funds upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. The Funds may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.

Floating rate loan interests are usually freely callable at the borrower’s option. The Funds may invest in such loans in the form of participations in loans (“Participations”) or assignments ("Assignments") of all or a portion of loans from third parties. Participations typically will result in the Funds having a contractual relationship only with the lender, not with the borrower. The Funds will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, the Funds generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower, and the Funds may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, the Funds will assume the credit risk of both the borrower and the lender that is selling the Participation. The Funds' investment in loan participation interests involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, the Funds may be treated as general creditors of the lender and may not benefit from any offset between the lender and the borrower. Assignments typically result in the Funds having a direct contractual relationship with the borrower and the Funds may enforce compliance by the borrower with the terms of the loan agreement.

Reverse Repurchase Agreements: The Funds may enter into reverse repurchase agreements with qualified third party broker-dealers. In a reverse repurchase agreement, the Funds sell securities to a bank or broker-dealer and agrees to repurchase the same securities at a mutually agreed upon date and price. Securities sold under reverse repurchase agreements are recorded at face value as a liability in the Statements of Assets and Liabilities. Due to the short term nature of the reverse repurchase agreements, face value approximates fair value. During the term of the reverse repurchase agreement, the Funds continue to receive the principal and interest payments on these securities. Certain agreements have no stated maturity and can be terminated by either party at any time. Interest on the value of the reverse repurchase agreements issued and outstanding is based upon competitive market rates determined at the time of issuance. The Funds may utilize reverse repurchase agreements when it is anticipated that the interest income to be earned from the investment of the proceeds of the transaction is greater than the interest expense of the transaction. Reverse repurchase agreements involve leverage risk and also the risk that the market value of the securities that the Funds are obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Funds' use of the proceeds of the agreement may be restricted while the other party, or its trustee or receiver, determines whether or not to enforce the Funds' obligation to repurchase the securities.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Funds either deliver collateral or segregate assets in con-

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Notes to Financial Statements (continued)

nection with certain investments (e.g., financial futures contracts, foreign currency exchange contracts, swaps, and options written), or certain borrowings (e.g., reverse repurchase agreements and loan payable), the Funds will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their books and records cash or liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each party to such transactions has requirements to deliver/deposit securities as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. If the total dividends and distributions made in any tax year exceeds net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax return of capital. The amount and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP.

Income Taxes: It is each Fund's policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

Each Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Fund’s US federal tax returns remains open for each of the four years ended October 31, 2011. The statutes of limitations on the each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.

Recent Accounting Standards: In May 2011, the Financial Accounting Standards Board (the “FASB”) issued amended guidance to improve disclosure about fair value measurements, which will require the following disclosures for fair value measurements categorized as Level 3: quantitative information about the unobservable inputs and assumptions used in the fair value measurement, a description of the valuation policies and procedures and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, the amounts and reasons for all transfers in and out of Level 1 and Level 2 will be required to be disclosed as well as disclosure of the level in the fair value hierarchy of assets and liabilities not recorded at fair value but where fair value is disclosed. The amended guidance is effective for financial statements for fiscal years beginning after December 15, 2011, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statement disclosures.

In December 2011, the FASB issued guidance that will expand current disclosure requirements on the offsetting of certain assets and liabilities. The new disclosures will be required for investments and derivative financial instruments subject to master netting or similar agreements which are eligible for offset in the Statements of Assets and Liabilities and will require an entity to disclose both gross and net information about such investments and transactions in the financial statements. The guidance is effective for financial statements with fiscal years beginning on or after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statement disclosures.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Fund's Board, independent Directors (“Independent Directors”) may 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 certain other BlackRock Closed-End Funds selected by the Independent Directors. This has approximately the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Fund. Prior to March 31, 2012, each Fund elected to invest in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors in order to match its deferred compensation obligations and dividends and distributions received from the BlackRock Closed-End Fund investments through March 31, 2012 are included in income — affiliated in the Statements of Operations.

Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods.

The Funds have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

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Notes to Financial Statements (continued)

2. Derivative Financial Instruments:

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to economically hedge, or protect, their exposure to certain risks such as credit risk, equity risk, interest rate risk or foreign currency exchange rate risk. These contracts may be transacted on an exchange or OTC.

Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument or if the counterparty does not perform under the contract. The Funds' maximum risk of loss from counterparty credit risk on OTC derivatives is generally the aggregate unrealized gain netted against any collateral pledged by/posted to the counterparty. For OTC options purchased, the Funds bear the risk of loss in the amount of the premiums paid plus the positive change in market values net of any collateral received on the options should the counterparty fail to perform under the contracts. Options written by the Funds do not give rise to counterparty credit risk, as options written obligate the Funds to perform and not the counterparty. Counterparty risk related to exchange-traded financial futures contracts and options and centrally cleared swaps is deemed to be minimal due to the protection against defaults provided by the exchange on which these contracts trade.

The Funds may mitigate counterparty risk by procuring collateral and through netting provisions included within an International Swaps and Derivatives Association, Inc. master agreement ("ISDA Master Agreement") implemented between a Fund and each of its respective counterparties. An ISDA Master Agreement allows each Fund to offset with each separate counterparty certain derivative financial instrument’s payables and/or receivables with collateral held. The amount of collateral moved to/from applicable counterparties is generally based upon minimum transfer amounts of up to $500,000. To the extent amounts due to the Funds from their counterparties are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty non-performance. See Note 1 “Segregation and Collateralization” for information with respect to collateral practices. In addition, the Funds manage counterparty risk by entering into agreements only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Certain ISDA Master Agreements allow counterparties to OTC derivatives to terminate derivative contracts prior to maturity in the event a Funds’ net assets decline by a stated percentage or the Funds fail to meet the terms of their ISDA Master Agreements, which would cause the Funds to accelerate payment of any net liability owed to the counterparty.

Financial Futures Contracts: The Funds purchase or sell financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Funds and the counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Funds as unrealized appreciation or depreciation. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

Foreign Currency Exchange Contracts: The Funds enter into foreign currency exchange contracts as an economic hedge against either specific transactions or portfolio instruments or to obtain exposure to foreign currencies (foreign currency exchange rate risk). A foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a future date. Foreign currency exchange contracts, when used by the Funds, help to manage the overall exposure to the currencies, in which some of the investments held by the Funds are denominated. The contract is marked-to-market daily and the change in market value is recorded by the Funds as an unrealized gain or loss. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. The use of foreign currency exchange contracts involves the risk that the value of a foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies and the risk that a counterparty to the contract does not perform its obligations under the agreement.

Options: The Funds purchase and write call and put options to increase or decrease their exposure to underlying instruments (including credit risk, equity risk and/or interest rate risk) and/or, in the case of options written, to generate gains from options premiums. A call option gives the purchaser (holder) of the option the right (but not the obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised), the underlying instrument at the exercise or strike 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 instrument at the exercise or strike price at any time or at a specified time during the option period. When the Funds purchase (writes) an option, an amount equal to the premium paid (received) by the Funds is reflected as an asset (liability). The amount of the asset (liability) is subsequently marked-to-market to reflect the current market value of the option purchased (written). When an instrument is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the instrument acquired or deducted from (or added to) the proceeds of the instrument sold. When an option expires (or the Fund enters into a closing transaction), the Funds realize a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premiums received or paid). When the Funds write a call option, such option is “covered,” meaning that the Funds holds the underlying instrument subject to being called by the option counterparty. When the Funds write a put option, such option is covered by cash in an amount sufficient to cover the obligation.

In purchasing and writing options, the Funds bear the risk of an unfavorable change in the value of the underlying instrument or the risk that the

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Notes to Financial Statements (continued)

Funds may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Funds purchasing or selling a security at a price different from the current market value.

Swaps: The Funds enter into swap agreements, in which the Funds and a counterparty agree to either make periodic net payments on a specified notional amount or net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be executed on a registered financial and commodities exchange (“centrally cleared swaps”). In a centrally cleared swap, the Funds typically enter into an agreement with a counterparty; however, performance is guaranteed by the central clearing-house reducing or eliminating the Funds’ exposure to the credit risk of the counterparty. These payments received or made by the Funds are recorded in the Statements of Operations as realized gains or losses, respectively. Any upfront fees paid are recorded as assets and any upfront fees received are recorded as liabilities and amortized over the term of the swap. Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). The daily change in valuation of centrally cleared swaps, if any, is recorded as a receivable or payable for variation margin in the Statements of Assets and Liabilities. When the swap is terminated, the Funds will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds' basis in the contract, if any. Generally, the basis of the contracts is the premium received or paid. Swap transactions involve, to varying degrees, elements of interest rate, credit and market risk in excess of the amounts recognized in the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.

Credit default swaps — The Funds enter into credit default swaps to manage their exposure to the market or certain sectors of the market, to reduce its risk exposure to defaults of corporate and/or sovereign issuers or to create exposure to corporate and/or sovereign issuers to which they are not otherwise exposed (credit risk). The Funds enter into credit default swap agreements to provide a measure of protection against the default of an issuer (as buyer of protection) and/or gain credit exposure to an issuer to which it is not otherwise exposed (as seller of protection). The Funds may either buy or sell (write) credit default swaps on single-name issuers (corporate or sovereign), a combination or basket of single-name issuers or traded indexes. Credit default swaps on single-name issuers are agreements in which the buyer pays fixed periodic payments to the seller in consideration for a guarantee from the seller to make a specific payment should a negative credit event take place with respect to the referenced entity (e.g., bankruptcy, failure to pay, obligation accelerators, repudiation, moratorium or restructuring). Credit default swaps on traded indexes are agreements in which the buyer pays fixed periodic payments to the seller in consideration for a guarantee from the seller to make a specific payment should a write-down, principal or interest shortfall or default of all or individual underlying securities included in the index occurs. As a buyer, if an underlying credit event occurs, the Funds will either receive from the seller an amount equal to the notional amount of the swap and deliver the referenced security or underlying securities comprising the index or receive a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index. As a seller (writer), if an underlying credit event occurs, the Funds will either pay the buyer an amount equal to the notional amount of the swap and take delivery of the referenced security or underlying securities comprising the index or pay a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index.
Interest rate swaps — The Funds enter into interest rate swaps to gain or reduce exposure to interest rates or to manage duration, the yield curve or interest rate risk by economically hedging the value of the fixed rate bonds which may decrease when interest rates rise (interest rate risk). Interest rate swaps are agreements in which one party pays a stream of interest payments, either fixed or floating rate, for another party’s stream of interest payments, either fixed or floating, on the same notional amount for a specified period of time. Interest rate floors, which are a type of interest rate swap, are agreements in which one party agrees to make payments to the other party to the extent that interest rates fall below a specified rate or floor in return for a premium. In more complex swaps, the notional principal amount may decline (or amortize) over time.

Derivative Financial Instruments Categorized by Risk Exposure:

Fair Values of Derivative Financial Instruments as of April 30, 2012
    Asset Derivatives
  PSW PSY BPP BTZ BGT
Statements of Assets
and Liabilities Location
        Value        
Foreign currency exchange contracts Unrealized appreciation on foreign currency contracts                    
          $ 32,307
Equity contracts Net unrealized appreciation/depreciation1                    
$ 17,420   $ 74,100   $ 35,880   $ 122,720  
Interest rate contracts Net unrealized appreciation/depreciation1; Investments at value — unaffiliated2                    
                   
  133,243   554,375   653,270   2,247,419  
Credit contracts Unrealized appreciation on swaps1                    
  Investments at value — unaffiliated2   35,265   154,685   87,542   254,130  
Total   $ 185,928 $ 783,160 $ 776,692 $ 2,624,269   $ 32,307

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Notes to Financial Statements (continued)

    Liability Derivatives
    PSW PSY BPP BTZ BGT
  Statements of Assets
and Liabilities Location
  Value
Foreign currency exchange contracts Unrealized depreciation on                              
foreign currency contracts $ (1,070 ) $ (2,375 )         $ (434,126 )
Equity contracts Net unrealized appreciation/                              
depreciation1   (12,394 )   (51,763 ) $ (25,517 ) $ (86,029 )    
Interest rate contracts Net unrealized appreciation/                              
depreciation1; Unrealized depreciation                              
on swaps1; Options written at value2   (602,845 )   (2,531,979 )   (2,168,613 )   (8,072,979 )    
Credit contracts Unrealized depreciation on swaps1;                              
  Options written at value2   (29,734 )   (127,551 )   (51,777 )   (148,628 )    
Total   $ (646,043 ) $ (2,713,668 ) $ (2,245,907 ) $ (8,307,636 ) $ (434,126 )

1Includes cumulative appreciation/depreciation on financial futures contracts and centrally cleared swaps as reported in the Schedules of Investments. Only the current day’s variation margin is reported within the Statements of Assets and Liabilities.
2Includes options purchased at value as reported in the Schedules of Investments.
The Effect of Derivative Financial Instruments in the Statements of Operations
Six Months Ended April 30, 2012
  Net Realized Gain (Loss) From
  PSW PSY   BPP BTZ BGT
Interest rate contracts:                            
Financial futures contracts $ (358,576 )  $  (1,388,225 ) $ (497,124 $  (1,600,523 )  
Options3   66,111     283,651     128,164     445,610    
Swaps   (576,334 )   (2,479,278 )   (1,108,195 )   (3,405,203 )  
Foreign currency exchange contracts:                            
Foreign currency exchange contracts                 $ 1,819,350
Credit contracts:                            
Swaps   (64,353 )   (272,297 )   (139,416 )   (515,188 )  
Equity contracts:                            
Options3   26,635     111,851     54,518     185,697    
Total $ (906,517 $ (3,744,298 )  $ (1,562,053 $  (4,889,607 ) $ 1,819,350
 
  Net Change in Unrealized Appreciation/Depreciation on
  PSW PSY BPP BTZ BGT
Interest rate contracts:                            
Financial futures contracts $ (340,848 ) $ (1,407,481 ) $ (459,337 ) $ (1,926,895 )  
Options3   41,296     187,017     99,516     403,296    
Swaps   118,094     527,155     159,052     129,819    
Foreign currency exchange contracts:                            
Foreign currency exchange contracts   1,037     6,642           $ 288,994
Credit contracts:                            
Swaps   109,542     472,766     237,452     862,070    
Equity contracts:                            
Options3   (179,647 )   (764,695 )   (370,025 )   (1,266,277 )  
Total $ (250,526 ) $ (978,596 ) $ (333,342 ) $ (1,797,987 ) $ 288,994

3Options purchased are included in the net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.
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Notes to Financial Statements (continued)

For the six months ended April 30, 2012, the average quarterly balances of outstanding derivative financial instruments were as follows:

  PSW PSY   BPP BTZ BGT
Financial futures contracts:                    
Average number of contracts purchased   16   69   59   196  
Average number of contracts sold   168   650   233   801  
Average notional value of contracts purchased   $ 1,980,750    $ 8,541,984    $ 7,723,453   $ 25,948,914  
Average notional value of contracts sold $ 22,699,253 $ 87,516,159 $ 34,452,875 $ 106,018,797  
Foreign currency exchange contracts:                    
Average number of contracts-US dollars purchased   2   2       5
Average number of contracts-US dollars sold           2
Average US dollar amounts purchased $ 351,351 $ 1,029,007       $ 72,125,864
Average US dollar amounts sold         $ 1,482,987
Options:                    
Average number of option contracts purchased   67   285   138   472   26
Average number of option contracts written   884   3,693   1,819   6,136  
Average notional value of option contracts purchased $ 8,040,000 $ 34,200,000 $ 16,560,000 $ 56,640,000 $ 24,514
Average notional value of option contracts written $ 4,917,500 $ 20,822,500 $ 10,127,500 $ 34,515,000  
Average number of swaption contracts purchased   8   8   7   7  
Average number of swaption contracts written   2   2   5   5  
Average notional value of swaption contracts purchased $ 10,200,000 $ 42,600,000 $ 18,250,000 $ 62,800,000  
Average notional value of swaption contracts written $ 7,000,000 $ 29,500,000 $ 29,650,000 $ 101,750,000  
Credit default swaps:                    
Average number of contracts-buy protection   6   6   6   4  
Average number of contracts-sell protection   5   5   5   5  
Average notional value-buy protection $ 8,090,000 $ 34,915,000 $ 17,990,000 $ 51,730,000  
Average notional value-sell protection $ 2,839,884 $ 12,410,665 $ 5,819,788 $ 20,371,766  
Interest rate swaps:                    
Average number of contracts-pays fixed rate   5   5   5   4  
Average number of contracts-receives fixed rate   2   2   1   2  
Average notional value-pays fixed rate $ 8,100,000 $ 35,000,000 $ 18,650,000 $ 53,750,000  
Average notional value-receives fixed rate $ 1,300,000 $ 5,850,000 $ 2,100,000 $ 15,650,000  

3. Investment Advisory Agreement and Other Transactions with Affiliates:

As of April 30, 2012, the PNC Financial Services Group, Inc. ("PNC") and Barclays Bank PLC ("Barclays") are the largest stockholders of BlackRock, Inc. ("BlackRock"). Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but Barclays is not.

Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Funds' investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee at the following annual rates of each Fund’s average daily (average weekly for BPP, BTZ and BGT) net assets (including any assets attributable to borrowings) as follows:

PSW 0.60 %
PSY 0.60 %
BPP 0.65 %
BTZ 0.65 %
BGT 0.75 %

The Manager voluntarily agreed to waive a portion of the investment advisory fees or other expenses on BGT as a percentage of its average weekly net assets (including any assets attributable to borrowings) minus the sum of liabilities (other than borrowings representing financial leverage) by 0.05% for the period September 1, 2011 to August 31, 2012. For the six months ended April 30, 2012, the Manager waived $392, which is included in fees waived by advisor in the Statements of Operations.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Fund's investment in other affiliated investment companies, if any. These amounts are included in fees waived by advisor in the Statements of Operations. For the six months ended April 30, 2012, the amounts waived were as follows:

PSW $ 491
PSY $ 1,276
BPP $ 772
BTZ $ 1,945
BGT $ 332

The Manager provides investment management and other services to the Taxable Subsidiary. The Manager does not receive separate compensation from the Taxable Subsidiary for providing investment management or administrative services. However, the Fund pays the Manager based on the Fund’s net assets, which includes the assets of the Taxable Subsidiary.

The Manager entered into a sub-advisory agreement with BlackRock Financial Management, Inc. ("BFM"), an affiliate of the Manager. The Manager pays BFM for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.

Certain officers and/or Directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for compensation paid to the Funds' Chief Compliance Officer.

SEMI-ANNUAL REPORTAPRIL 30, 201273
 

Notes to Financial Statements (continued)

4. Investments:

Purchases and sales of investments including paydowns and payups, excluding short-term securities and US government securities for the six months ended April 30, 2012, were as follows:

  Purchases Sales
PSW $ 23,218,848 $ 34,001,374
PSY $ 100,161,146 $ 138,042,751
BPP $ 43,854,009 $ 61,164,086
BTZ $ 163,512,893 $ 219,531,092
BGT $ 159,291,732 $ 133,965,223

Purchases and sales of US government securities for the six months ended April 30, 2012, were as follows:

  Purchases   Sales
PSW $ 5,304,724 $ 4,200,371
PSY $ 19,942,739 $ 16,801,794
BPP $ 9,397,688 $ 9,351,402
BTZ $ 35,594,950 $ 29,384,746

Transactions in options written for the six months ended April 30, 2012 were as follows:

  Calls Puts
  Contracts Notional
(000)
Premiums
Received
    Contracts Notional
(000)
Premiums
Received
 
PSW                                
Outstanding options, beginning of period   $ 1,800   $ 64,800     $ 1,800   $ 64,800  
Options written 3,333     1,100     132,945   67     11,500     301,372  
Options exercised                    
Options expired               (1,800 )   (64,800 )
Options closed (1,633 )   (2,900 )   (178,535 ) (67 )   (9,100 )   (254,572 )
Outstanding options, end of period 1,700       $ 19,210     $ 2,400   $ 46,800  
 
PSY                                
Outstanding options, beginning of period   $ 7,700   $ 277,200     $ 7,700   $ 277,200  
Options written 14,443     4,900     582,663   285     48,500     1,280,613  
Options excerised                    
Options expired               (7,700 )   (277,200 )
Options closed (7,343 )   (12,600 )   (779,633 ) (285 )   (38,900 )   (1,093,413 )
Outstanding options, end of period 7,100       $ 80,230     $ 9,600   $ 187,200  
 
BPP                                
Outstanding options, beginning of period   $ 8,700   $ 425,700     $ 8,700   $ 425,700  
Options written 6,969         164,701   138     31,900     552,940  
Options exercised               (3,700 )   (133,200 )
Options expired                    
Options closed (3,469 )   (3,700 )   (258,351 ) (138 )   (16,500 )   (413,020 )
Outstanding options, end of period 3,500   $ 5,000   $ 332,050     $ 20,400   $ 432,420  
 
BTZ                                
Outstanding options, beginning of period   $ 30,000   $ 1,461,850     $ 30,000   $ 1,461,850  
Options written 23,836         563,326   472     109,500     1,897,460  
Options exercised                    
Options expired               (13,000 )   (467,350 )
Options closed (12,036 )   (13,000 )   (897,336 ) (472 )   (56,500 )   (1,413,410 )
Outstanding options, end of period 11,800   $ 17,000   $ 1,127,840     $ 70,000   $ 1,478,550  

74SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Notes to Financial Statements (continued)

5. Income Tax Information:

As of October 31, 2011, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

Expires October 31, PSW PSY BPP BTZ BGT
2012 $ 10,243,141  $ 62,733,648      
2013   5,058,900   17,911,331      
2014   8,481,628   12,145,117      
2015   6,724,694   19,582,978  $ 18,184,893  $ 49,741,712  $ 3,268,804
2016   40,232,230   140,413,242   58,197,929   113,355,213   24,616,531
2017   55,825,534   194,970,854   108,996,120   223,939,227   45,385,443
2018   4,498,024   37,285,625   15,245,888   15,223,841   16,526,601
2019   2,118,889   11,730,113   2,683,880   10,353,275   406,589
Total $ 133,183,040 $ 496,772,908 $ 203,308,710 $ 412,613,268 $ 90,203,968

Under the recently enacted Regulated Investment Company Modernization Act of 2010, capital losses incurred by the Fund after October 31, 2011 will not be subject to expiration. In addition, any such losses must be utilized prior to the losses incurred in pre-enactment taxable years.

As of April 30, 2012, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

  PSW PSY BPP BTZ BGT
Tax cost $ 144,062,731   $ 617,375,114   $ 291,188,282   $ 983,935,275   $ 487,454,847  
Gross unrealized appreciation $ 10,316,219   $ 42,243,469   $ 19,031,366   $ 57,977,988   $ 10,646,677  
Gross unrealized depreciation   (1,714,543 )   (10,256,188 )   (8,374,221 )   (22,412,823 )   (12,442,061 )
Net unrealized appreciation (depreciation) $ 8,601,676   $ 31,987,281   $ 10,657,145   $ 35,565,165   $ (1,795,384 )

6. Borrowings:

BGT entered into a senior committed secured, 364-day revolving line of credit and a separate security agreement (the “SSB Agreement”) with State Street Bank and Trust Company (“SSB”). The Fund has granted a security interest in substantially all of its assets to SSB. The SSB Agreement provides the Fund with a maximum commitment of $172.2 million.

Advances will be made by SSB to the Fund, at the Fund’s option of (a) the higher of (i) 0.75% above the Fed Funds rate and (ii) 0.75% above the Overnight LIBOR or (b) 0.75% above 7-day, 30-day, 60-day or 90-day LIBOR.

In addition, the Fund pays a facility fee and a commitment fee based upon SSB’s total commitment to the Fund. The fees associated with each of the agreements are included in the Statements of Operations as borrowing costs. Advances to the Fund as of April 30, 2012 are shown in the Statements of Assets and Liabilities as loan payable. Based on the short-term nature of the borrowings under the line of credit and the variable interest rate, the carrying amount of the borrowings approximates fair value.

The SSB Agreement was renewed for 364 days under substantially the same terms effective March 2, 2012. For the six months ended April 30, 2012, the daily weighted average interest rate was 0.95%.

BGT may not declare dividends or make other distributions on shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding short-term borrowings is less than 300%.

For the six months ended April 30, 2012, the daily weighted average interest rates for Funds with borrowings from reverse repurchase agreements were as follows:

PSW 0.38 %
PSY 0.37 %
BPP 0.37 %
BTZ 0.35 %

7. Commitments:

The Funds may invest in floating rate loan interests. In connection with these investments, the Funds may also enter into unfunded floating rate loan interests and bridge loan commitments (“commitments”). Bridge loan commitments may obligate the Funds to furnish temporary financing to a borrower until permanent financing can be arranged. At April 30, 2012, BGT had outstanding bridge loan commitments of $3,765,000. In connection with either of these commitments, the Funds earn a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in interest income in the Statements of Operations, is recognized ratably over the commitment period. The unrecognized commitment fee income is recorded on the Statements of Assets and Liabilities as deferred income. Unfunded floating rate loan interests are marked-to-market daily, and any unrealized appreciation or depreciation is included in the Statements of Assets and Liabilities and Statements of Operations. As of April 30, 2012, BGT had the following unfunded floating rate loan interests:

Borrower Unfunded
Floating Rate
Loan Interest
Value of
Underlying
Floating Rate
Loan Interest
Unrealized
Appreciation
Tronox Worldwide LLC,            
Delayed Draw Term Loan $ 465,000 $ 465,646 $ 646

SEMI-ANNUAL REPORTAPRIL 30, 201275
 

Notes to Financial Statements (continued)

8. Concentration, Market and Credit Risk:

As of April 30, 2012, PSW, PSY, BPP and BTZ invested a significant portion of their assets in securities in the financials sector, whereas BGT invested a significant portion of its assets in the media sector. Changes in economic conditions affecting the financials and media sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counter-party credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds' exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Funds' Statements of Assets and Liabilities, less any collateral held by the Funds.

9. Capital Share Transactions:

PSW and PSY are each authorized to issue 200 million of $0.10 par value shares, all of which were initially classified as Common Shares. Each Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common Shareholders. There are an unlimited number of $0.001 par value shares authorized for BPP, BTZ and BGT, which may be issued as either Common Shares or Preferred Shares.

Common Shares

For the periods shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

  Six Months
Ended
April 30,
2012
Year Ended
October 31,
2011
BGT 6,757 39,329

Shares issued and outstanding remained constant for the six months ended April 30, 2012 and the year ended October 31, 2011 for PSW, PSY, BPP and BTZ, respectively.

Preferred Shares

During the year ended October 31, 2011, the Funds announced the following redemptions of Preferred Shares at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date:

  Series Redemption
Date
Shares
Redeemed
Aggregate
Principal
PSW M7   12/07/10 805 $ 20,125,000
  T7   12/08/10 805 $ 20,125,000
PSY M7   1/04/11 861 $ 21,525,000
  T7   1/05/11 861 $ 21,525,000
  W7   1/06/11 861 $ 21,525,000
  R7   1/07/11 861 $ 21,525,000
  F7   1/10/11 861 $ 21,525,000
  W28   1/13/11 1,228 $ 30,700,000
  R28   1/28/11 1,228 $ 30,700,000
BPP T7   12/08/10 939 $ 23,475,000
  W7   12/09/10 939 $ 23,475,000
  R7   12/10/10 939 $ 23,475,000
BTZ T7   1/05/11 2,310 $ 57,750,000
  W7   1/06/11 2,310 $ 57,750,000
  R7   1/07/11 2,310 $ 57,750,000
  F7   1/10/11 2,310 $ 57,750,000
BGT T7   12/08/10 784 $ 19,600,000
  W7   12/09/10 784 $ 19,600,000
  R7   12/10/10 784 $ 19,600,000

All of the Funds, except BGT, financed the Preferred Share redemptions with cash received from reverse repurchase agreements. BGT financed the Preferred Share redemption with cash received from a line of credit.

The Preferred Shares were redeemable at the option of each Fund, in whole or in part, on any dividend payment date at their liquidation preference per share plus any accumulated and unpaid dividends whether or not declared. The Preferred Shares were also subject to mandatory redemption at their liquidation preference plus any accumulated and unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Fund, as set forth in each Fund’s Articles of Supplementary (the “Governing Instrument”) are not satisfied.

The holders of Preferred Shares had voting rights equal to the holders of Common Shares (one vote per share) and would vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, were also entitled to elect two Directors for each Fund. In addition, the 1940 Act 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 Fund’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

76SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Notes to Financial Statements (concluded)

10. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

The Funds paid a net investment income dividend in the following amounts per share on May 31, 2012 to Common Shareholders on record on May 15, 2012:

  Common
Dividend
Per Share
PSW $0.0595
PSY $0.0610
BPP $0.0635
BTZ $0.0785
BGT $0.0775

Additionally, the Funds declared a net investment income dividend on June 1, 2012 payable to Common Shareholders of record on June 15, 2012 for the same amounts noted above.

SEMI-ANNUAL REPORTAPRIL 30, 201277
 

Officers and Directors1

Richard E. Cavanagh, Chairman of the Board and Director
Karen P. Robards, Vice Chairperson of the Board,
   Chairperson of the Audit Committee and Director
Paul L. Audet, Director
Michael J. Castellano, Director and Member of the Audit
   Committee
Frank J. Fabozzi, Director and Member of the Audit
   Committee
Kathleen F. Feldstein, Director
James T. Flynn, Director and Member of the Audit
   Committee
Henry Gabbay, Director
Jerrold B. Harris, Director
R. Glenn Hubbard, Director
W. Carl Kester, Director and Member of the Audit Committee
John M. Perlowski, President and Chief Executive Officer
Anne Ackerley, Vice President
Brendan Kyne, Vice President
Neal Andrews, Chief Financial Officer
Jay Fife, Treasurer
Brian Kindelan, Chief Compliance Officer and
   Anti-Money Laundering Officer
Ira P. Shapiro, Secretary

1John F. Powers, who was a Director of the Fund, resigned as of February 21, 2012.

Investment Advisor
BlackRock Advisors, LLC
Wilmington, DE 19809

Sub-Advisor
BlackRock Financial Management, Inc.
New York, NY 10022

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

Transfer Agent
Common Shares
Computershare Trust Company, N.A.
Canton, MA 02021

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

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

Address of the Funds
100 Bellevue Parkway
Wilmington, DE 19809



78SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Additional Information

Dividend Policy

The Funds’ dividend policy is to distribute all or a portion of their net investment income to their shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Funds may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

General Information

On July 29, 2010, the Manager announced that a derivative complaint had been filed by Roy Curbow and other plaintiffs, including shareholders of PSY and BTZ on July 27, 2010 in the Supreme Court of the State of New York, New York County. The complaint names the Manager, BlackRock, Inc. and certain of the directors, officers and portfolio managers of PSY and BTZ as defendants. The complaint alleges, among other things, that the parties named in the complaint breached fiduciary duties owed to PSY and BTZ and their Common Shareholders by redeeming auction-market preferred shares, auction rate preferred securities, auction preferred shares and auction rate securities (collectively, “AMPS”) at their liquidation preference. The complaint seeks unspecified damages for losses purportedly suffered by PSY and BTZ as a result of the prior redemptions and injunctive relief preventing PSY and BTZ from redeeming AMPS at their liquidation preference in the future. On March 15, 2012, the Supreme Court of the State of New York, New York County entered an order consolidating the above-referenced derivative complaint with another derivative complaint, containing almost identical allegations, already pending in that court. The court on March 15, 2012, also granted plaintiffs permission to file an amended complaint. On April 16, 2012, the plaintiffs filed a Consolidated Shareholder Derivative Complaint. The Manager, BlackRock, Inc. and the other defendants named in the complaint believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

On November 15, 2010, the Manager announced the intention to redeem all of the outstanding AMPS issued by five of its taxable closed-end funds: PSW, PSY, BPP, BTZ, and BGT. All such outstanding AMPS were subsequently redeemed. The redemptions encompass all remaining taxable AMPS issued by BlackRock closed-end funds and total approximately $569 million. The AMPS were redeemed with available cash or proceeds from reverse repurchase agreement financing or a credit facility on a fund-by-fund basis and, in each case, the refinancing resulted in a lower cost of financing for each fund under then-existing market conditions.

In exchange for the shareholder plaintiff's agreement to withdraw a previously filed motion for preliminary injunction enjoining any further redemptions of AMPS, each of these funds agreed to provide the plaintiffs in those actions with 30 days prior notice of any additional redemptions. On November 24, 2010, the Manager announced that counsel for the plaintiffs filed a motion for a preliminary injunction enjoining PSY and BTZ from redeeming outstanding AMPS pending final resolution of the underlying shareholder derivative suit. On December 23, 2010, the court denied plaintiffs’ motion for a preliminary injunction.

On June 3, 2011, a putative class action lawsuit was brought by Hinda Wachtel against PSY, certain former and current Directors of PSY, BlackRock, Inc., and certain other financial institutions in the Circuit Court for Baltimore City. The complaint alleges that the redemptions at par of certain AMPS issued by PSY constituted a breach of the fiduciary duties purportedly owed to the common shareholders of PSY; that PSY allegedly aided and abetted breaches of fiduciary duties by the Directors; and that PSY, BlackRock, Inc., and others were unjustly enriched. The Complaint requests a declaratory judgment that PSY aided and abetted breaches of fiduciary duties by the Directors and that PSY, BlackRock, Inc. and certain other financial institutions were unjustly enriched; seeks to enjoin BlackRock, Inc. from serving as investment adviser to PSY or otherwise earning fees for services rendered to PSY; and claims unquantified damages, attorneys' fees, interest and punitive damages. On June 5, 2012, the plaintiff voluntarily dismissed the complaint without prejudice.

SEMI-ANNUAL REPORTAPRIL 30, 201279
 

Additional Information (continued)

General Information (continued)

On June 9, 2011, a putative class action lawsuit was brought by Sydell Protas against BTZ, certain former and current Directors of BTZ, BlackRock, Inc., and certain other financial institutions, in the Court of Chancery of the State of Delaware. On August 31, 2011, Plaintiff filed an "Amended Verified Derivative and Class Action Complaint" (the "Amended Complaint"), which purports to assert certain of the claims derivatively on behalf of BTZ and certain of the claims directly as class claims. The Amended Complaint alleges that the redemptions at par of certain AMPS issued by BTZ constituted a breach of the fiduciary duties purportedly owed to the common shareholders of BTZ; that BTZ allegedly aided and abetted breaches of fiduciary duties by the Directors; and that BTZ, BlackRock, Inc., and others were unjustly enriched. The Amended Complaint requests a declaratory judgment that BTZ aided and abetted breaches of fiduciary duties by the Directors and that BTZ, BlackRock, Inc. and certain other financial institutions were unjustly enriched; seeks to enjoin BlackRock, Inc. from serving as investment adviser to BTZ or otherwise earning fees for services rendered to BTZ; and claims unquantified damages, attorneys' fees, interest and punitive damages. On May 4, 2012, the court dismissed the Amended Complaint with prejudice. On June 4, 2012, the Plaintiff appealed the Delaware Chancery Courts decision to the Delaware Supreme Court.

On February 9, 2012, the Board of BPP approved the removal of BPP’s non-fundamental investment policy requiring that swaps may only be entered into with counterparties that are rated either A or A-1 or better by S&P or Fitch, or A or P-1 or better by Moody's. As a result of this investment policy change, BPP may enter into swaps with any counterparties approved by the Manager. Such counterparties may entail a greater degree of credit risk or risk of nonperformance than counterparties rated either A or A-1 or better by S&P or Fitch, or A or P-1 or better by Moody's. The Manager will seek to minimize BPP’s exposure to counterparty risk by entering into swaps with counterparties the Manager believes to be creditworthy at the time they enter into such transactions. To the extent BPP engages in swaps, shareholders of BPP will be dependent on the analytical ability of the Manager to evaluate the credit quality of counterparties to such transactions. In the event of the insolvency of a counterparty, BPP may not be able to recover its assets, in full or at all, during the insolvency process. In addition, counterparties to investments may have no obligation to make markets in such investments and may have the ability to apply essentially discretionary margin and credit requirements. The foregoing investment policy amendment will not alter BPP’s investment objective.

The Funds do not make available copies of their Statements of Additional Information because the Funds’ shares are not continuously offered, which means that the Statement of Additional Information of each Fund has not been updated after completion of the respective Fund’s offerings and the information contained in each Fund’s Statement of Additional Information may have become outdated.

During the period, except as noted above, there were no material changes in the Funds’ investment objectives or policies or to the Funds’ charters or by-laws that would delay or prevent a change of control of the Funds that were not approved by the shareholders or in the principal risk factors associated with investment in the Funds. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolios.

Quarterly performance, semi-annual and annual reports and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ web-sites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Funds’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Funds 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 call the Funds at (800) 441-7762.

80SEMI-ANNUAL REPORTAPRIL 30, 2012
 

Additional Information (continued)

General Information (concluded)

Availability of Quarterly Schedule of Investments

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

Availability of Fund Updates

BlackRock will update performance and certain other data for the Funds on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com. Investors and others are advised to periodically check the website for updated performance information and the release of other material information about the Funds. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

Section 19(a) Notices

The reported amounts and sources of distributions are estimates and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Each Fund will provide a Form 1099-DIV each calendar year that will explain the character of these dividends and distributions for federal income tax purposes.

April 30, 2012

  Total Cumulative Distributions
for the Fiscal Year-to-Date
  % Breakdown of the Total Cumulative
Distributions for the Fiscal Year-to-Date
  Net
Investment
Income
Net Realized
Capital
Gains
Return of
Capital
Total Per
Common
Share
  Net
Investment
Income
Net Realized
Capital
Gains
Return of
Capital
Total Per
Common
Share
BTZ   $0.469000   $0.469000   100 % 100 %

SEMI-ANNUAL REPORTAPRIL 30, 201281
 

Additional Information (concluded)

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

82SEMI-ANNUAL REPORTAPRIL 30, 2012
 

This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Funds leverage their Common Shares, which creates risk for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of Common Shares, and the risk that fluctuations in short-term interest rates may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.


#CE-CAFRI-5-4/12-SAR  

 
  

Item 2 – Code of Ethics – Not Applicable to this semi-annual report

Item 3 – Audit Committee Financial Expert – Not Applicable to this semi-annual report

Item 4 – Principal Accountant Fees and Services – Not Applicable to this semi-annual report

Item 5 – Audit Committee of Listed Registrants – Not Applicable to this semi-annual report

Item 6 – Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report

Item 8 – Portfolio Managers of Closed-End Management Investment Companies

(a)    Not Applicable to this semi-annual report

(b)   As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

 

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable

Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

Item 11 – Controls and Procedures

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 – Exhibits attached hereto

(a)(1) – Code of Ethics – Not Applicable to this semi-annual report

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(b) – Certifications – Attached hereto

2
  

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BlackRock Floating Rate Income Trust

 

By:     /s/ John M. Perlowski

John M. Perlowski

Chief Executive Officer (principal executive officer) of

BlackRock Floating Rate Income Trust

 

Date: July 2, 2012

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:     /s/ John M. Perlowski

John M. Perlowski

Chief Executive Officer (principal executive officer) of

BlackRock Floating Rate Income Trust

 

Date: July 2, 2012

 

By:     /s/ Neal J. Andrews

Neal J. Andrews

Chief Financial Officer (principal financial officer) of

BlackRock Floating Rate Income Trust

 

Date: July 2, 2012

3