UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-21972

Name of Fund: BlackRock Credit Allocation Income Trust IV (BTZ)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock
Credit Allocation Income Trust IV, 55 East 52 nd Street, New York, NY 10055.

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

Date of fiscal year end: 10/31/2009

Date of reporting period: 10/31/2009

Item 1 – Report to Stockholders


EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS

Annual Report

OCTOBER 31, 2009

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 Enhanced Capital and Income Fund, Inc. (CII)

BlackRock Floating Rate Income Trust (BGT)

NOT FDIC INSURED

MAY LOSE VALUE

NO BANK GUARANTEE

Table of Contents    
  Page  
Section 19(b) Disclosure   2  
Dear Shareholder   3  
Annual Report:    
Fund Summaries   4  
The Benefits and Risks of Leveraging   10  
Derivative Financial Instruments   10  
Financial Statements:    
    Schedules of Investments   11  
    Statements of Assets and Liabilities   36  
    Statements of Operations   37  
    Statements of Changes in Net Assets   38  
    Statement of Cash Flows   40  
Financial Highlights   41  
Notes to Financial Statements   47  
Report of Independent Registered Public Accounting Firm   58  
Important Tax Information   59  
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements   60  
Automatic Dividend Reinvestment Plans   64  
Officers and Directors   66  
Additional Information   69  

Section 19(b) Disclosure

BlackRock Credit Allocation Income Trust IV (BTZ) and BlackRock Enhanced Capital and Income Fund, Inc. (CII) (collectively, the “Funds”), acting pursuant to
a Securities and Exchange Commission (“SEC”) exemptive order and with the approval of each Fund’s Board of Directors/Trustees (the “Board”), each have
adopted a plan, consistent with its investment objectives and policies to support a level distribution of income, capital gains and/or return of capital (“Plan”).
In accordance with the Plans, the Funds currently distribute the following fixed amounts per share on a monthly basis for BTZ and a quarterly basis for CII:

Exchange Symbol   Amount Per Common Share  
BTZ   $ 0.100  
CII   $ 0.485  

The fixed amounts distributed per share are subject to change at the discretion of each Fund’s Board. Under its Plan, each Fund will distribute all available
investment income to its shareholders, consistent with its primary investment objectives and as required by the Internal Revenue Code of 1986, as amended
(the “Code”). If sufficient investment income is not available on a monthly/quarterly basis, the Funds will distribute long-term capital gains and/or return of
capital to shareholders in order to maintain a level distribution. Each monthly/quarterly distribution to shareholders is expected to be at the fixed amount
established by the Board, except for extraordinary distributions and potential distribution rate increases or decreases to enable the Funds to comply with
the distribution requirements imposed by the Code.

Shareholders should not draw any conclusions about the Funds’ investment performance from the amount of these distributions or from the terms of the Plan.
Each Fund’s total return performance on net asset value is presented in its financial highlights table.

The Board may amend, suspend or terminate a Fund’s Plan without prior notice if it deems such actions to be in the best interests of the Fund or its share-
holders. The suspension or termination of the Plan could have the effect of creating a trading discount (if the Fund’s stock is trading at or above net asset
value) or widening an existing trading discount. The Funds are subject to risks that could have an adverse impact on their ability to maintain level distri-
butions. Examples of potential risks include, but are not limited to, economic downturns impacting the markets, decreased market volatility, companies sus-
pending or decreasing corporate dividend distributions and changes in the Code. Please refer to each Fund’s prospectus for a more complete description
of its risks.

Please refer to Additional Information for a cumulative summary of the Section 19(a) notices for each Fund’s current fiscal period. Section 19(a) notices for
the Funds, as applicable, are available on the BlackRock website www.blackrock.com .

2 ANNUAL REPORT OCTOBER 31, 2009

Dear Shareholder

Over the past 12 months, we have witnessed a seismic shift in market sentiment — from fear and pessimism during the worst economic decline and crisis

of confidence in financial markets since The Great Depression to increasing optimism amid emerging signs of recovery. The period began in the midst of an

intense deterioration in global economic activity and financial markets in the final months of 2008 and the early months of 2009. The collapse of confi-

dence resulted in massive government policy intervention on a global scale in the financial system and the economy. The tide turned dramatically in March

2009, however, on the back of new US government initiatives, as well as better-than-expected economic data and upside surprises in corporate earnings.

Not surprisingly, global equity markets endured extreme volatility over the past 12 months, starting with steep declines and heightened risk aversion in the

early part of the reporting period, which eventually gave way to an impressive rally that began in March. Although there have been fits and starts along the

way and a few modest corrections, the new bull market has pushed all major US indices well into positive territory for 2009. The experience in international

markets was similar to that in the United States. In particular, emerging markets (which were less affected by the global credit crunch and are experiencing

faster economic growth rates when compared to the developed world) have posted impressive gains since the rally began.

In fixed income markets, the flight-to-safety premium in Treasury securities prevailed during the equity market downturn, which drove yields sharply lower,

but concerns about deficit spending, debt issuance, inflation and dollar weakness have kept Treasury yields range bound in recent months. As economic

and market conditions began to improve in early 2009, near-zero interest rates on risk-free assets prompted many investors to reallocate money from cash

investments into higher-yielding and riskier non-Treasury assets. The high yield sector was the greatest beneficiary of this move, having decisively outpaced

all other taxable asset classes since the start of 2009. Similarly, the municipal bond market is on pace for its best performance year ever in 2009, following

one of its worst years in 2008. Investor demand remains strong for munis, helping to create a highly favorable technical backdrop. Municipal bond mutual

funds are seeing record inflows, reflecting the renewed investor interest in the asset class.

As a result of the rebound in sentiment and global market conditions, most major benchmark indexes are now in positive territory for both the

6- and 12-month periods.

Total Returns as of October 31, 2009   6-month   12-month  
US equities (S&P 500 Index)   20.04%   9.80%  
Small cap US equities (Russell 2000 Index)   16.21   6.46  
International equities (MSCI Europe, Australasia, Far East Index)   31.18   27.71  
US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index*)   (0.79)   8.12  
Taxable fixed income (Barclays Capital US Aggregate Bond Index)   5.61   13.79  
Tax-exempt fixed income (Barclays Capital Municipal Bond Index)   4.99   13.60  
High yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)   27.72   48.65  
* Formerly a Merrill Lynch index.      
        Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index.    

The market environment has visibly improved since the beginning of the year, but a great deal of uncertainty and risk remain. Through periods of market
turbulence, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. For additional market perspective and investment
insight, visit the most recent issue of our award-winning Shareholder® magazine at www.blackrock.com/shareholdermagazine. As always, we thank you
for entrusting BlackRock with your investments, and we look forward to continuing to serve you in the months and years ahead.


Announcement to Shareholders

On December 1, 2009, BlackRock, Inc. and Barclays Global Investors, N.A. combined to form one of the world's preeminent investment management firms.

The new company, operating under the BlackRock name, manages $3.19 trillion in assets** and offers clients worldwide a full complement of active man-

agement, enhanced and index investment strategies and products, including individual and institutional separate accounts, mutual funds and other pooled

investment vehicles, and the industry-leading iShares platform of exchange traded funds.

** Data is as of September 30, 2009, is subject to change, and is based on a pro forma estimate of assets under management and other data at BlackRock, Inc.
and Barclays Global Investors.

THIS PAGE NOT PART OF YOUR FUND REPORT 3

Fund Summary as of October 31, 2009 BlackRock Credit Allocation Income Trust I, Inc.

Investment Objective

BlackRock Credit Allocation Income Trust I, Inc. (PSW) (formerly BlackRock Preferred and Corporate Income Strategies Fund, Inc.) (the “Fund”) seeks to
provide shareholders with high current income and capital appreciation. The Fund seeks to achieve its objectives by investing primarily in credit-related securi-
ties, including, but not limited to, investment grade corporate bonds, high yield bonds, bank loans, preferred securities or convertible bonds or derivatives with
economic characteristics similar to these credit-related securities.

Effective November 13, 2009, BlackRock Preferred and Corporate Income Strategies Fund, Inc. was renamed BlackRock Credit Allocation Income Trust I, Inc.

The Board approved a change to the Fund’s non-fundamental investment policies during the period. Please refer to page 70 in the Additional Information
section.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 37.59% based on market price and 46.46% based on net asset value (“NAV”). For the
same period, the closed-end Lipper Income & Preferred Stock Funds category posted an average return of 39.55% on a market price basis and 40.36% on
a NAV basis. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between
performance based on price and performance based on NAV. Strong annual performance has been driven by the Fund’s positioning to fully capture the
near-term strength anticipated in the preferred sector during 2009. The Fund benefited from an overweight allocation to institutional hybrids (preferred secu-
rities available only over-the-counter to institutional investors) as the sector continued its dramatic outperformance during 2009 relative to retail preferred
securities, which are exchange traded. This position also served as a performance detractor when the preferred sector deteriorated during the fourth quarter
of 2008. Performance benefited from participation in several additional issuer-related tenders in preferred equity exchanges, along with an overweight in
the insurance sector. A generally large position in short-term securities proved beneficial as well — most notably during 2008 and into the first quarter
of 2009 — as it preserved NAV better than had the Fund been fully invested. Finally, the Fund notably reduced leverage in response to rating agency
methodology changes for preferred securities requiring greater collateral due to increased volatility in the sector, which detracted from performance.

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.

      Fund Information                  
  Symbol on New York Stock Exchange (“NYSE”)             PSW  
  Initial Offering Date             August 1, 2003  
  Yield based on Closing Market Price as of October 31, 2009 ($8.24) 1         8.74%  
  Current Monthly Distribution per Common Share 2             $0.06  
  Current Annualized Distribution per Common Share 2             $0.72  
  Leverage as of October 31, 2009 3               32%  
      1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.    
          Past performance does not guarantee future results.              
      2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.  
      3 Represents reverse repurchase agreements and Auction Market Preferred Shares (“Preferred Shares”) as a percentage of total managed assets,  
          which is the total assets of the Fund (including any assets attributable to any borrowings and Preferred Shares) 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 10.                
  The table below summarizes the changes in the Fund’s market price and NAV per share:        
        10/31/09   10/31/08   Change   High   Low  
  Market Price       $8.24   $7.00   17.71%   $8.52   $3.44  
  Net Asset Value       $9.31   $7.43   25.30%   $9.31   $4.55  
  The following unaudited charts show the portfolio composition and credit quality allocations of the Fund’s total investments:  
        Portfolio Composition                       Credit Quality Allocations 4      
    10/31/09   10/31/08         10/31/09   10/31/08  
  Preferred Securities         58%   87%           AA/Aa       —   14%  
  Short-Term Securities   29   11           A/A       26%   36  
  Corporate Bonds   13   2           BBB/Baa     62   36  
                BB/Ba       8   4  
                B/B       2   —  
                Not Rated     2   10  
        4 Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investor  
                        Service (“Moody’s”) ratings.      
4         ANNUAL REPORT         OCTOBER 31, 2009      

Fund Summary as of October 31, 2009 BlackRock Credit Allocation Income Trust II, Inc.

Investment Objective

BlackRock Credit Allocation Income Trust II, Inc. (PSY) (formerly BlackRock Preferred Income Strategies Fund, Inc.) (the “Fund”) seeks to provide share-
holders with current income and capital appreciation. The Fund seeks to achieve its objectives by investing primarily in credit-related securities, including,
but not limited to, investment grade corporate bonds, high yield bonds, bank loans, preferred securities or convertible bonds or derivatives with economic
characteristics similar to these credit-related securities.

Effective November 13, 2009, BlackRock Preferred Income Strategies Fund, Inc. was renamed BlackRock Credit Allocation Income Trust II, Inc.

The Board approved a change to the Fund’s non-fundamental investment policies during the period. Please refer to page 70 in the Additional Information
section.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 29.37% based on market price and 48.36% based on NAV. For the same period, the
closed-end Lipper Income & Preferred Stock Funds category posted an average return of 39.55% on a market price basis and 40.36% on a NAV basis.
All returns reflect reinvestment of dividends. The Fund moved from a premium to a discount to NAV by year-end, which accounts for the difference between
performance based on price and performance based on NAV. Strong annual performance has been driven by the Fund’s positioning to fully capture the
near-term strength anticipated in the preferred sector during 2009. The Fund benefited from an overweight allocation to institutional hybrids (preferred secu-
rities available only over-the-counter to institutional investors) as the sector continued its dramatic outperformance during 2009 relative to retail preferred
securities, which are exchange traded. This position also served as a performance detractor when the preferred sector deteriorated during the fourth quarter
of 2008. Performance benefited from participation in several additional issuer-related tenders in preferred equity exchanges, along with an overweight in
the insurance sector. A generally large position in short-term securities proved beneficial as well — most notably during 2008 and into the first quarter
of 2009 — as it preserved NAV better than had the Fund been fully invested. Finally, the Fund notably reduced leverage in response to rating agency
methodology changes for preferred securities requiring greater collateral due to increased volatility in the sector, which detracted from performance.

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.

Fund Information                  
  Symbol on NYSE               PSY  
  Initial Offering Date             March 28, 2003  
  Yield on Closing Market Price as of October 31, 2009 ($8.90) 1         10.11%  
  Current Monthly Distribution per Common Share 2           $ 0.075  
  Current Annualized Distribution per Common Share 2           $ 0.900  
  Leverage as of October 31, 2009 3               30%  
      1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.    
          Past performance does not guarantee future results.              
      2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.  
      3 Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund  
          (including any assets attributable to any borrowings and Preferred Shares) 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 10.    
  The table below summarizes the changes in the Fund’s market price and NAV per share:        
      10/31/09   10/31/08   Change   High   Low  
  Market Price     $ 8.90   $8.10   9.88%   $ 9.20   $3.69  
  Net Asset Value     $10.03   $7.96   26.01%   $10.03   $4.60  
  The following unaudited charts show the portfolio composition and credit quality allocations of the Fund’s total investments:  
        Portfolio Composition       Credit Quality Allocations 4      
    10/31/09   10/31/08         10/31/09   10/31/08  
  Preferred Securities   88%   93%     AA/Aa       1%   15%  
  Short-Term Securities   9   4     A/A       26   34  
  Corporate Bonds   3   3     BBB/Baa     56   28  
          BB/Ba       14   6  
          B/B       3   —  
          Not Rated     —   17  
              4 Using the higher of S&P’s or Moody’s ratings.    
        ANNUAL REPORT         OCTOBER 31, 2009     5  

Fund Summary as of October 31, 2009 BlackRock Credit Allocation Income Trust III

Investment Objective

BlackRock Credit Allocation Income Trust III (BPP) (formerly BlackRock Preferred Opportunity Trust) (the “Fund”) seeks high current income consistent
with capital preservation. The Fund seeks to achieve its objectives by investing primarily in credit-related securities, including, but not limited to, investment
grade corporate bonds, high yield bonds, bank loans, preferred securities or convertible bonds or derivatives with economic characteristics similar to these
credit-related securities.

Effective November 13, 2009, BlackRock Preferred Opportunity Trust was renamed BlackRock Credit Allocation Income Trust III.

The Board approved a change to the Fund’s non-fundamental investment policies during the period. Please refer to page 70 in the Additional Information
section.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 36.42% based on market price and 47.16% based on NAV. For the same period, the
closed-end Lipper Income & Preferred Stock Funds category posted an average return of 39.55% on a market price basis and 40.36% on a NAV basis. All
returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance
based on price and performance based on NAV. Strong annual performance has been driven by the Fund’s positioning to fully capture the near-term
strength anticipated in the preferred sector during 2009. The Fund benefited from an overweight allocation to institutional hybrids (preferred securities avail-
able only over-the-counter to institutional investors) as the sector continued its dramatic outperformance during 2009 relative to retail preferred securities,
which are exchange traded. This position also served as a performance detractor when the preferred sector deteriorated during the fourth quarter of 2008.
Performance benefited from participation in several additional issuer-related tenders in preferred equity exchanges, along with an overweight in the insur-
ance sector. A generally large position in short-term securities proved beneficial as well — most notably during 2008 and into the first quarter of 2009 —
as it preserved NAV better than had the Fund been fully invested. Finally, the Fund notably reduced leverage in response to rating agency methodology
changes for preferred securities requiring greater collateral due to increased volatility in the sector, which detracted from performance.

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.

      Fund Information                  
  Symbol on NYSE               BPP  
  Initial Offering Date             February 28, 2003  
  Yield on Closing Market Price as of October 31, 2009 ($9.94) 1           8.75%  
  Current Monthly Distribution per Common Share 2             $0.0725  
  Current Annualized Distribution per Common Share 2             $0.8700  
  Leverage as of October 31, 2009 3               29%  
      1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.    
          Past performance does not guarantee future results.              
      2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.  
      3 Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund  
          (including any assets attributable to any borrowings and Preferred Shares) 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 10.  
  The table below summarizes the changes in the Fund’s market price and NAV per share:        
      10/31/09   10/31/08   Change   High   Low  
  Market Price     $ 9.94   $8.51   16.80%   $10.35   $4.00  
  Net Asset Value     $11.05   $8.77   26.00%   $11.13   $5.06  
  The following unaudited charts show the portfolio composition and credit quality allocations of the Fund’s total investments:  
        Portfolio Composition       Credit Quality Allocations 4      
    10/31/09   10/31/08         10/31/09   10/31/08  
  Preferred Securities   69%   90%     AA/Aa       4%               16%  
  Short-Term Securities   23   3     A/A       28   39  
  Corporate Bonds   8   7     BBB/Baa     45   24  
          BB/Ba       13   5  
          B       5   —  
          CCC/Caa     5   —  
          Not Rated     —   16  
              4 Using the higher of S&P’s or Moody’s ratings.    
6         ANNUAL REPORT         OCTOBER 31, 2009      

Fund Summary as of October 31, 2009 BlackRock Credit Allocation Income Trust IV

Investment Objective

BlackRock Credit Allocation Income Trust IV (BTZ) (formerly BlackRock Preferred and Equity Advantage Trust) (the “Fund”) seeks to achieve high
current income, current gains and capital appreciation. The Fund seeks to achieve its objectives by investing primarily in credit-related securities, including,
but not limited to, investment grade corporate bonds, high yield bonds, bank loans, preferred securities or convertible bonds or derivatives with economic char-
acteristics similar to these credit-related securities.

Effective November 13, 2009, BlackRock Preferred and Equity Advantage Trust was renamed BlackRock Credit Allocation Income Trust IV.

The Board approved a change to the Fund’s non-fundamental investment policies during the period. Please refer to page 70 in the Additional Information
section.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 38.38% based on market price and 41.06% based on NAV. For the same period, the
closed-end Lipper Income & Preferred Stock Funds category posted an average return of 39.55% on a market price basis and 40.36% on a NAV basis. All
returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance
based on price and performance based on NAV. Strong annual performance has been driven by the Fund’s positioning to fully capture the near-term
strength anticipated in the preferred sector during 2009. The Fund benefited from an overweight allocation to institutional hybrids (preferred securities avail-
able only over-the-counter to institutional investors) as the sector continued its dramatic outperformance during 2009 relative to retail preferred securities,
which are exchange traded. This position also served as a performance detractor when the preferred sector deteriorated during the fourth quarter of 2008.
Performance benefited from participation in several additional issuer-related tenders in preferred equity exchanges, along with an overweight in the insur-
ance sector. A generally large position in short-term securities proved beneficial as well — most notably during 2008 and into the first quarter of 2009 —
as it preserved NAV better than had the Fund been fully invested. Finally, the Fund notably reduced leverage in response to rating agency methodology
changes for preferred securities requiring greater collateral due to increased volatility in the sector, which detracted from performance.

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.

Fund Information                  
  Symbol on NYSE               BTZ  
  Initial Offering Date             December 27, 2006  
  Yield on Closing Market Price as of October 31, 2009 ($10.96) 1         10.95%  
  Current Monthly Distribution per Common Share 2           $ 0.10  
  Current Annualized Distribution per Common Share 2           $ 1.20  
  Leverage as of October 31, 2009 3               31%  
      1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.    
          Past performance does not guarantee future results.              
      2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.  
      3 Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund  
          (including any assets attributable to any borrowings and Preferred Shares) 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 10.    
  The table below summarizes the changes in the Fund’s market price and NAV per share:        
        10/31/09   10/31/08   Change   High   Low  
  Market Price       $10.96   $ 9.36   17.09%   $11.49   $4.56  
  Net Asset Value       $12.64   $10.59   19.36%   $12.69   $6.89  
  The following unaudited charts show the portfolio composition of the Fund’s total investments and credit quality allocations of the  
  Fund’s total investments excluding Common Stocks:              
        Portfolio Composition                       Credit Quality Allocations 4      
    10/31/09   10/31/08         10/31/09   10/31/08  
  Preferred Securities   57%   59%           AA/Aa       4%   15%  
  Short-Term Securities   33   21           A/A       33   37  
  Corporate Bonds   4   4           BBB/Baa     53   30  
  Common Stocks   6   16           BB/Ba       6   2  
                B/B       4   16  
                    4 Using the higher of S&P’s or Moody’s ratings.    
        ANNUAL REPORT         OCTOBER 31, 2009     7  

Fund Summary as of October 31, 2009   BlackRock Enhanced Capital and Income Fund, Inc.  
      Investment Objective    
BlackRock Enhanced Capital and Income Fund, Inc. (CII) (the “Fund”) seeks to provide investors with a combination of current income and capital  
appreciation. The Fund seeks to achieve its investment objective by investing primarily in a diversified portfolio of common stocks in an attempt to  
generate current income and by employing a strategy of writing (selling) call options on equity indexes in an attempt to generate gains from option  
premiums primarily on the S&P 500 Index.    
The Board approved a change to the Fund’s option writing policy during the period. Please refer to page 70 in the Additional Information section.  
        No assurance can be given that the Fund’s investment objective will be achieved.    
      Performance    
For the 12 months ended October 31, 2009, the Fund returned 29.88% based on market price and 22.01% based on NAV. For the same period, the  
benchmark S&P 500 Citigroup Value Index returned 2.98% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which  
narrowed significantly during the period, accounts for the difference between performance based on price and performance based on NAV. The main con-  
tributor to Fund performance relative to the S&P 500 Citigroup Value Index was the Option strategy that was implemented by the Fund. The option strategy  
contributed almost 75% of the outperformance over the index. From an equity holdings standpoint, the main contributors were an underweight and stock  
selection in financials, stock selection in health care and industrials, and overweights in the information technology and energy sectors. The main detractors  
from performance for the one-year period included stock selection in materials and consumer staples, as well as an underweight in the consumer  
discretionary sector.    
        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.    

      Fund Information                
  Symbol on NYSE             CII  
  Initial Offering Date           April 30, 2004  
  Yield on Closing Market Price as of October 31, 2009 ($13.76) 1         14.10%  
  Current Quarterly Distribution per share 2           $ 0.485  
  Current Annualized Distribution per share 2           $ 1.940  
  1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.    
          Past performance does not guarantee future results.              
  2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.  
  The table below summarizes the changes in the Fund’s market price and NAV per share:        
      10/31/09   10/31/08   Change   High   Low  
  Market Price     $13.76   $12.37   11.24%   $15.70   $ 7.92  
  Net Asset Value     $14.40   $13.78   4.50%   $14.99   $10.62  
  The following unaudited charts show the ten largest holdings and sector allocations of the Fund’s long-term investments:    
        Ten Largest Holdings                     Sector Allocations        
    10/31/09         10/31/09   10/31/08  
  The Travelers Cos., Inc.           4%           Financials     19%   16%  
  JPMorgan Chase & Co.   3           Information Technology     17   15  
  LSI Corp.   3           Health Care     13   4  
  Chevron Corp.   3           Consumer Staples     12   23  
  Schering-Plough Corp.   3           Energy       11   15  
  Bristol-Myers Squibb Co.   3           Industrials     9   7  
  Exxon Mobil Corp.   3           Telecommunication Services   7   6  
  Kimberly-Clark Corp.   3           Consumer Discretionary   6   6  
  Kraft Foods, Inc.   3           Materials     3   3  
  Time Warner, Inc.   3           Utilities       3   5  
                      For Fund compliance purposes, the Fund’s sector classifications refer  
                      to any one or more of the sector sub-classifications used by one or  
                      more widely recognized market indexes or ratings group indexes,  
                      and/or as defined by Fund management. This definition may not  
                      apply for purposes of this report, which may combine sector sub-  
                      classifications for reporting ease.      
8         ANNUAL REPORT       OCTOBER 31, 2009      

Fund Summary as of October 31, 2009 BlackRock Floating Rate Income Trust

Investment Objective

BlackRock Floating Rate Income Trust (BGT) (formerly BlackRock Global Floating Rate Income Trust) (the “Fund”) seeks to provide a high level of current
income and to seek the preservation of capital. The Fund seeks to achieve its objective by investing in a global portfolio of primarily floating and variable
rate securities.

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

Performance

For the 12 months ended October 31, 2009, the Fund returned 54.14% based on market price and 39.51% based on NAV. For the same period, the
closed-end Lipper Loan Participation Funds category posted an average return of 39.76% on a market price basis and 25.60% on a NAV basis. All returns
reflect reinvestment of dividends. (The performance of the Lipper category does not necessarily correlate to that of the Fund, as the Lipper group comprises
both closed-end funds that employ leverage and continuously offered closed-end funds that do not. For this reporting period, those Lipper peers that do not
employ leverage were at a disadvantage given the market rally.) The Fund's discount to NAV, which narrowed during the period, accounts for the difference
between performance based on price and performance based on NAV. For the first two months of the reporting period, the high yield loan market was under
extreme pressure and lost 10.9%, as measured by the Credit Suisse Leveraged Loan Index. However, this brief period of underperformance was followed by the
market’s strongest results ever, as the sector gained more than 40% for the period January 1, 2009 to October 31, 2009. On average, market performance was
positive and the Fund’s reduction of leverage in response to higher collateral requirements imposed by the major rating agencies had a negative effect on
absolute performance. Relative to its Lipper peers, the Fund gained from both maintaining leverage and focusing on higher-quality sectors and structures, which
benefited most during the sharp rally in 2009. Conversely, the Fund’s cash position hurt performance during the period.

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.

Fund Information                  
  Symbol on NYSE               BGT  
  Initial Offering Date             August 30, 2004  
  Yield on Closing Market Price as of October 31, 2009 ($12.58) 1           6.44%  
  Current Monthly Distribution per Common Share 2             $0.0675  
  Current Annualized Distribution per Common Share 2             $0.8100  
  Leverage as of October 31, 2009 3               19%  
      1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.    
          Past performance does not guarantee future results.              
      2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.  
      3 Represents loan outstanding and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund (including any  
          assets attributable to any borrowings and Preferred Shares) 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 10.    
  The table below summarizes the changes in the Fund’s market price and NAV per share:        
        10/31/09   10/31/08   Change   High   Low  
  Market Price       $12.58   $ 9.63   30.63%   $12.98   $6.88  
  Net Asset Value       $13.29   $11.24   18.24%   $13.35   $8.86  
  The following unaudited charts show the portfolio composition of the Fund’s long-term investments and credit quality allocations  
  of the Fund’s long-term investments excluding floating rate loan interests:          
        Portfolio Composition                       Credit Quality Allocations 4      
    10/31/09   10/31/08         10/31/09   10/31/08  
  Floating Rate Loan Interests   76%   79%           AAA/Aaa       16%   —  
  Corporate Bonds   20   14           A/A       4   20%  
  Foreign Government Obligations   3   7           BBB/Baa     27   30  
  Other Interests   1   —           BB/Ba       17   16  
                B/B       22   23  
                CCC/Caa     6   10  
                C/C       5   —  
                D       1   —  
                Not Rated     2   1  
        4 Using the higher of S&P’s or Moody’s ratings.    
        ANNUAL REPORT         OCTOBER 31, 2009     9  

The Benefits and Risks of Leveraging

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

The Funds may utilize leverage through borrowings, the issuance of
Preferred Shares or by entering into reverse repurchase agreements. In
general, the concept of leveraging is based on the premise that the cost of
assets to be obtained from leverage will be based on short-term interest
rates, which normally will be lower than the 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 Common Shareholders
will benefit from the incremental net income.

The interest earned on securities purchased with the proceeds from lever-
age is paid to Common Shareholders in the form of dividends, and the
value of these portfolio holdings is reflected in the per share NAV of each
Fund’s Common Shares. However, in order to benefit Common 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 Common Shareholders will be lower than if the
Funds had not used leverage.

To illustrate these concepts, assume a Fund’s Common Shares capitalization
is $100 million and it borrows and/or issues Preferred Shares for an addi-
tional $50 million, creating a total value of $150 million available for invest-
ment 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 interest expense and/or dividends on
the $50 million of Preferred Shares based on the lower short-term interest
rates. At the same time, the securities purchased by the Fund with assets
received from the borrowings and/or issuance of Preferred Shares can earn
income based on long-term interest rates. In this case, the interest expense
and/or dividends paid to Preferred Shareholders are significantly lower
than the income earned on the Fund’s long-term investments, and there-
fore the Common 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 on
the Common Shares will be reduced or eliminated completely. Furthermore,
if prevailing short-term interest rates rise above long-term interest rates of
6%, the yield curve has a negative slope. In this case, the Fund pays divi-
dends on the higher short-term interest rates whereas the Fund’s total port-
folio earns income based on lower long-term interest rates.

Furthermore, the value of a Fund’s 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 and/or Preferred Shares does not fluctuate
in relation to interest rates. As a result, changes in interest rates can influ-
ence the Funds’ NAV positively or negatively in addition to the impact on
Fund performance from leverage from borrowings.

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 gener-
ally cause greater changes to each Fund’s NAV, market price and dividend
rates than a comparable portfolio without leverage. If the income derived
from securities purchased with assets received from leverage exceeds the
cost of leverage, each Fund’s net income will be greater than if leverage had
not been used. Conversely, if the income from the securities purchased is
not sufficient to cover the cost of leverage, 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 lever-
age 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 strate-
gies, such as in the case of certain restrictions imposed by ratings agencies
that rate Preferred Shares issued by each Fund. Each Fund will incur
expenses in connection with the use of leverage, all of which are borne by
the Common Shareholders and may reduce income on the Common Shares.

Under the Investment Company Act of 1940, BGT is permitted to borrow
through a credit facility up to 33 1 / 3 % of its total managed assets and the
Funds are permitted to issue Preferred Shares in an amount of up to 50%
of their total managed assets at the time of issuance. Under normal cir-
cumstances, each Fund anticipates that the total economic leverage from
Preferred Shares, reverse repurchase agreements and credit facility borrow-
ings will not exceed 50% of its total managed assets at the time such lever-
age is incurred. As of October 31, 2009, the Funds had economic leverage
from Preferred Shares, reverse repurchase agreements and/or credit facility
borrowings as a percentage of their total managed assets as follows:

  Percent of  
  Leverage  
PSW   32%  
PSY   30%  
BPP   29%  
BTZ   31%  
BGT   19%  

Derivative Financial Instruments

The Funds may invest in various derivative instruments, including financial
futures contracts, swaps, foreign currency exchange contracts and options,
as specified in Note 2 of the Notes to Financial Statements, which consti-
tute forms of economic leverage. Such instruments are used to obtain
exposure to a market without owning or taking physical custody of securi-
ties or to hedge market, equity, credit, interest rate and/or foreign currency
exchange rate risks. Such derivative instruments involve risks, including the
imperfect correlation between the value of a derivative instrument and the
underlying asset, possible default of the counterparty to the transaction
and illiquidity of the derivative instrument. Each Fund’s ability to success-

fully use a derivative instrument depends on the investment advisor’s
ability to accurately predict pertinent market movements, which cannot be
assured. The use of derivative instruments may result in losses greater than
if they had not been used, may require the Funds to sell or purchase port-
folio securities at inopportune times or at distressed values, may limit the
amount of appreciation the Funds can realize on an investment or may
cause the Funds to hold a security that they might otherwise sell. The
Funds’ investments in these instruments are discussed in detail in the
Notes to Financial Statements.

10 ANNUAL REPORT OCTOBER 31, 2009

Schedule of Investments October 31, 2009     BlackRock Credit Allocation Income Trust I, Inc. (PSW)  
            (Percentages shown are based on Net Assets)  
    Par             Par    
Corporate Bonds     (000)             Value   Capital Trusts       (000)   Value  
Insurance — 2.5%           Multi-Utilities — 2.8%          
Oil Insurance Ltd., 7.56% (a)(b)(c)   $ 1,000   $ 706,200   Dominion Resources Capital Trust I,        
QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)     1,484   1,695,246   7.83%, 12/01/27 (f)     $ 1,200 $   1,202,650  
      2,401,446   Dominion Resources, Inc., 7.50% (c)     1,051   1,029,980  
          Puget Sound Energy, Inc. Series A, 6.97%, 6/01/67 (c)   475   415,587  
Media — 12.5%                    
COX Communications, Inc., 8.38%, 3/01/39 (a)     10,000   11,988,640           2,648,217  
Total Corporate Bonds — 15.0%       14,390,086   Oil, Gas & Consumable Fuels — 1.3%        
          Enterprise Products Operating LLC, 8.38%, 8/01/66 (c)   825   808,500  
          TransCanada PipeLines Ltd., 6.35%, 5/15/67 (c)     500   465,397  
Preferred Securities                   1,273,897  
          Total Capital Trusts — 33.5%         32,110,050  
Capital Trusts                    
Building Products — 0.7%                    
C8 Capital SPV Ltd., 6.64% (a)(b)(c)     980   691,018   Preferred Stocks       Shares    
Capital Markets — 5.8%           Commercial Banks — 8.1%          
Ameriprise Financial, Inc., 7.52%, 6/01/66 (c)     1,900   1,615,000   First Tennessee Bank NA, 3.90% (a)(c)     1,176   589,838  
Lehman Brothers Holdings Capital Trust V,           HSBC USA, Inc.:          
3.64% (b)(c)(d)(e)     1,600     160         Series D, 4.50% (c)       35,000   734,300  
State Street Capital Trust III, 8.25% (b)(c)     725   731,257         Series H, 6.50%       168,000   3,410,400  
State Street Capital Trust IV, 1.30%, 6/01/67 (c)     4,740   3,180,090   Provident Financial Group, Inc., 7.75%     42,000   1,013,250  
      5,526,507   Royal Bank of Scotland Group Plc, Series M, 6.40%   5,000   51,700  
Commercial Banks — 3.3%           Santander Finance Preferred SA Unipersonal, 6.80%   72,807   1,992,000  
Bank of Ireland Capital Funding II, LP, 5.57% (a)(b)(c)   429   188,760           7,791,488  
Bank of Ireland Capital Funding III, LP, 6.11% (a)(b)(c)   740   325,600   Diversified Financial Services — 2.0%        
Barclays Bank Plc, 5.93% (a)(b)(c)     500   390,000   Cobank ACB, 7.00% (a)       38,000   1,326,439  
First Empire Capital Trust II, 8.28%, 6/01/27     910   691,337   ING Groep NV, 7.20%       35   612,942  
National City Preferred Capital Trust I, 12.00% (b)(c)     300   343,359            
SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(b)(c)     875   948,675           1,939,381  
Santander Perpetual SA Unipersonal, 6.67% (a)(b)(c)   250   228,123   Electric Utilities — 3.6%          
SunTrust Preferred Capital I, 5.85% (b)(c)     135     88,087   Alabama Power Co., 6.50%       25,000   750,000  
      3,203,941   Entergy Arkansas, Inc., 6.45%       28,800   609,301  
          Entergy Louisiana LLC, 6.95%       22,650   2,119,747  
Diversified Financial Services — 3.0%                    
Farm Credit Bank of Texas Series 1, 7.56% (b)(c)     1,000   701,550           3,479,048  
JPMorgan Chase Capital XXIII, 1.44%, 5/15/77 (c)     3,085   2,172,873   Insurance — 5.8%          
      2,874,423   Aspen Insurance Holdings Ltd., 7.40% (c)     55,000   1,116,500  
          Axis Capital Holdings Ltd.:          
Electric Utilities — 0.5%                 Series A, 7.25%       35,000   789,250  
PPL Capital Funding, 6.70%, 3/30/67 (c)     500   430,000         Series B, 7.50% (c)       9,000   673,875  
Insurance — 16.1%           Endurance Specialty Holdings Ltd. Series A, 7.75%   35,200   770,880  
AXA SA, 6.38% (a)(b)(c)     3,585   3,038,287   RenaissanceRe Holding Ltd. Series D, 6.60%     110,000   2,267,100  
Ace Capital Trust II, 9.70%, 4/01/30     500   552,614           5,617,605  
The Allstate Corp., 6.50%, 5/15/57 (c)(f)     3,200   2,736,000            
Chubb Corp., 6.38%, 3/29/67 (c)(g)     500   453,750   Real Estate Investment Trusts (REITs) — 7.4%        
Farmers Exchange Capital, 7.05%, 7/15/28 (a)     500   428,271   BRE Properties, Inc. Series D, 6.75%     10,000   205,200  
Genworth Financial, Inc., 6.15%, 11/15/66 (c)     750   502,500   First Industrial Realty Trust, Inc., 6.24% (c)     610   270,116  
Great West Life & Annuity Insurance Co.,           HRPT Properties Trust:          
  7.15%, 5/16/46 (a)(c)     500   415,000         Series B, 8.75%       97,917   2,257,966  
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(c)     500   525,000         Series C, 7.13%       125,000   2,332,500  
Lincoln National Corp., 7.00%, 5/17/66 (c)     500   410,000   iStar Financial, Inc. Series I, 7.50%     59,500   416,500  
MetLife, Inc., 6.40%, 12/15/66 (f)     500   433,125   Public Storage:          
Nationwide Life Global Funding I, 6.75%, 5/15/67     500   378,967         Series F, 6.45%       10,000   212,500  
Oil Casualty Insurance Ltd., 8.00%, 9/15/34 (a)     915   576,450         Series I, 7.25%       40,000   954,000  
Progressive Corp., 6.70%, 6/15/67 (c)     500   437,973         Series M, 6.63%       20,000   429,000  
Reinsurance Group of America, 6.75%, 12/15/65 (c)   700   542,500           7,077,782  
The Travelers Cos., Inc., 6.25%, 3/15/67 (c)     500   450,000   Wireless Telecommunication Services — 2.8%        
ZFS Finance (USA) Trust II, 6.45%, 12/15/65 (a)(c)(h)   1,800   1,620,000   Centaur Funding Corp., 9.08% (a)       2,720   2,729,350  
ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (a)(c)     146   118,040            
ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)     1,097   888,570   Total Preferred Stocks — 29.7%         28,634,654  
Zenith National Insurance Capital Trust I,                    
8.55%, 8/01/28 (a)     1,000   955,000            
      15,462,047            
Portfolio Abbreviations                    
To simplify the listings of portfolio holdings in the Schedules of       ADR   American Depositary Receipts   MXN   Mexican New Peso    
Investments, the names of many of the securities have been         EUR   Euro     USD   US Dollar      
abbreviated according to the following list:           GBP   British Pound          
See Notes to Financial Statements.                    
ANNUAL REPORT         OCTOBER 31, 2009     11  

Schedule of Investments (continued)         BlackRock Credit Allocation Income Trust I, Inc. (PSW)  
                (Percentages shown are based on Net Assets)  
    Shares                      
Trust Preferreds   (000)     Value                  
Consumer Finance — 2.2%         •   For Fund compliance purposes, the Fund’s industry classifications refer to any one  
Capital One Capital II, 7.50%, 6/15/66   93   $ 2,060,649     or more of the industry sub-classifications used by one or more widely recognized  
Electric Utilities — 1.3%           market indexes or ratings group indexes, and/or as defined by Fund management.  
PPL Energy Supply LLC, 7.00%, 7/15/46   49     1,263,610     This definition may not apply for purposes of this report, which may combine indus-  
Insurance — 2.0%           try sub-classifications for reporting ease.          
ABN AMRO North America Capital Funding Trust II,         •   Reverse repurchase agreements outstanding as of October 31, 2009 were  
  2.87% (a)(b)(c)   2     85,988     as follows:              
Lincoln National Capital VI Series F, 6.75%, 9/11/52   90     1,827,781                  
              Interest   Trade   Maturity   Net Closing   Face  
        1,913,769                  
            Counterparty   Rate   Date   Date     Amount   Amount  
Total Trust Preferreds — 5.5%       5,238,028                  
            Barclays Bank Plc 0.75%   10/16/09   11/16/09   $4,975,252   $ 4,972,041  
Total Preferred Securities — 68.7%     65,982,732                  
Total Long Term Investments         •   Financial futures contracts purchased as of October 31, 2009 were as follows:  
(Cost — $94,148,823) — 83.7%     80,372,818         Expiration     Notional   Unrealized  
            Contracts   Issue   Date         Value   Appreciation  
            50   2-Year U.S.            
                                  Treasury Bond            December 2009   $ 10,793,860   $ 86,609  
Short-Term Securities   Shares         6   30-Year U.S.            
BlackRock Liquidity Funds, TempFund,                                 Treasury Bond   December 2009   $ 712,575   8,363  
  Institutional Class, 0.18% (i)(j)   33,286,296   33,286,296     Total             $ 94,972  
Total Short-Term Securities                        
(Cost — $33,286,296) — 34.6%     33,286,296   •   Credit default swaps on single-name issue — buy protection outstanding as of  
            October 31, 2009 were as follows:          
Total Investments (Cost — $127,435,119*) — 118.3%   113,659,114                  
Other Assets Less Liabilities — 23.6%     22,648,143       Pay         Notional    
Preferred Shares, at Redemption Value — (41.9)%            (40,258,949)     Fixed   Counter-       Amount   Unrealized  
Net Assets Applicable to Common Shares — 100.0%     $ 96,048,308     Issuer   Rate   party   Expiration   (000)   Depreciation  
* The cost and unrealized appreciation (depreciation) of investments as of October 31,     Nordstrom, Inc. 5.20%   Deutsche   June      
  2009, as computed for federal income tax purposes, were as follows:           Bank AG   2014   $ 1,000   $ (168,952)  
  Aggregate cost     $ 127,460,901                  
  Gross unrealized appreciation     $ 2,075,593                  
  Gross unrealized depreciation     (15,877,380)                  
  Net unrealized depreciation     $ (13,801,787)                
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933.                  
  These securities may be resold in transactions exempt from registration to qualified                  
  institutional investors.                        
(b) Security is perpetual in nature and has no stated maturity date.                      
  (c) Variable rate security. Rate shown is as of report date.                      
(d) Non-income producing security.                        
  (e) Issuer filed for bankruptcy and/or is in default of interest payments.                      
  (f) All or a portion of the security has been pledged as collateral in connection with                  
  open reverse repurchase agreements.                        
  (g) All or a portion of the security has been pledged as collateral in connection with                  
  open swaps.                        
(h) All or a portion of the security has been pledged as collateral in connection with                  
  open financial futures contracts.                        
(i) Investments in companies considered to be an affiliate of the Fund, for purposes of                  
  Section 2(a)(3) of the Investment Company Act of 1940, were as follows:                  
    Net                      
  Affiliate   Activity     Income                  
  BlackRock Liquidity Funds, TempFund,                        
  Institutional Class   $ 33,286,296   $ 73,357                  
  BlackRock Liquidity Series, LLC                        
  Cash Sweep Series   $(15,938,424)   $ 56,701                  
  (j) Represents the current yield as of report date.                        
See Notes to Financial Statements.                        
12   ANNUAL REPORT                     OCTOBER 31, 2009        

Schedule of Investments (concluded)   BlackRock Credit Allocation Income Trust I, Inc. (PSW)  
• Fair Value Measurements — Various inputs are used in determining the fair value of       Other Financial  
        investments, which are as follows:     Valuation Inputs     Instruments 1  
        • Level 1 — price quotations in active markets/exchanges for identical assets       Assets   Liabilities  
            and liabilities     Level 1   $ 94,972   —  
        • Level 2 — other observable inputs (including, but not limited to: quoted prices for   Level 2     —   $ (168,952)  
            similar assets or liabilities in markets that are active, quoted prices for identical   Level 3     —   —  
            or similar assets or liabilities in markets that are not active, inputs other than   Total   $ 94,972   $ (168,952)  
            quoted prices that are observable for the assets or liabilities (such as interest          
            rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and   1 Other financial instruments are financial futures contracts and swaps. Financial  
            default rates) or other market-corroborated inputs)     futures contracts and swaps are valued at the unrealized appreciation/depreci-  
        • Level 3 — unobservable inputs based on the best information available in the   ation on the instrument.        
            circumstances, to the extent observable inputs are not available (including the   The following is a reconciliation of investments for unobservable inputs (Level 3)  
            Fund’s own assumptions used in determining the fair value of investments)   used in determining fair value:        
        The inputs or methodology used for valuing securities are not necessarily an indica-          
          Investments in  
        tion of the risk associated with investing in those securities. For information about          
          Securities  
        the Fund’s policy regarding valuation of investments and other significant accounting          
        policies, please refer to Note 1 of the Notes to Financial Statements.         Capital Trusts  
        The following tables summarize the inputs used as of October 31, 2009 in   Balance, as of October 31, 2008       —  
        determining the fair valuation of the Fund’s investments:     Accrued discounts/premiums       —  
    Realized gain (loss)       —  
  Investments in   Change in unrealized appreciation/depreciation     —  
        Valuation Inputs   Securities   Net purchases (sales)       —  
          Assets   Net transfers in/out Level 3       $ 576,450  
        Level 1     Balance, as of October 31, 2009       $ 576,450  
          Long-Term Investments:            
            Preferred Stocks   $ 19,302,737          
            Trust Preferreds   5,152,040          
          Short-Term Securities   33,286,296          
        Total Level 1   57,741,073          
        Level 2            
          Long-Term Investments :            
            Capital Trusts   31,533,600          
            Corporate Bonds   14,390,086          
            Preferred Stocks   9,331,917          
            Trust Preferreds   85,988          
        Total Level 2   55,341,591          
        Level 3            
          Long-Term Investments:            
            Capital Trusts   576,450          
        Total   $ 113,659,114          
See Notes to Financial Statements.            
ANNUAL REPORT     OCTOBER 31, 2009     13  

Schedule of Investments October 31, 2009   BlackRock Credit Allocation Income Trust II, Inc. (PSY)  
          (Percentages shown are based on Net Assets)  
      Par       Par    
Corporate Bonds       (000)   Value   Capital Trusts   (000)   Value  
Insurance — 2.6%           Insurance (concluded)      
Oil Insurance Ltd., 7.56% (a)(b)(c)   $ 5,000   $ 3,531,000   Principal Life Insurance Co., 8.00%, 3/01/44 (a) $   6,325   $ 5,663,683  
QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)     5,967   6,816,396   Progressive Corp., 6.70%, 6/15/67 (c)(f)   2,000   1,751,894  
Structured Asset Repackaged Trust, Series 2004-1,       Reinsurance Group of America,      
  0.78%, 4/21/11 (a)(c)       299   266,121     6.75%, 12/15/65 (c)   3,000   2,325,000  
Total Corporate Bonds — 2.6%       10,613,517   The Travelers Cos., Inc., 6.25%, 3/15/67 (c)   3,000   2,700,000  
          ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (a)(c)   379   306,418  
          ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)   4,312   3,492,720  
Preferred Securities           Zenith National Insurance Capital Trust I,      
            8.55%, 8/01/28 (a)   3,750   3,581,250  
              85,641,493  
Capital Trusts                
          Multi-Utilities — 3.8%      
Building Products — 0.7%           Dominion Resources Capital Trust I,      
C8 Capital SPV Ltd., 6.64% (a)(b)(c)     3,915   2,760,545     7.83%, 12/01/27   10,000   10,022,080  
Capital Markets — 5.3%           Dominion Resources, Inc., 7.50% (c)   5,449   5,340,020  
Ameriprise Financial, Inc., 7.52%, 6/01/66 (c)     7,600   6,460,000       15,362,100  
Lehman Brothers Holdings Capital Trust V,              
  3.64% (b)(c)(d)(e)       6,400   640   Oil, Gas & Consumable Fuels — 1.4%      
State Street Capital Trust III, 8.25% (b)(c)     2,920   2,945,200   Enterprise Products Operating LLC,      
State Street Capital Trust IV, 1.30%, 6/01/67 (c)   18,235   12,233,953     8.38%, 8/01/66 (c)   2,000   1,960,000  
          TransCanada PipeLines Ltd., 6.35%, 5/15/67 (c)   4,000   3,723,180  
        21,639,793        
              5,683,180  
Commercial Banks — 12.0%                
ABN AMRO North America Holding, Preferred         Road & Rail — 0.9%      
  Capital Repackaging Trust I, 6.52% (a)(b)(c)     12,035   8,544,850   BNSF Funding Trust I, 6.61%, 12/15/55 (c)   3,750   3,548,437  
Bank One Capital III, 8.75%, 9/01/30     2,000   2,252,786   Total Capital Trusts — 49.3%     201,733,947  
Bank of Ireland Capital Funding II, LP,              
  5.57% (a)(b)(c)       1,715   754,600        
Bank of Ireland Capital Funding III, LP,              
  6.11% (a)(b)(c)       2,951   1,298,440   Preferred Stocks   Shares    
Barclays Bank Plc, 5.93% (a)(b)(c)     2,500   1,950,000   Capital Markets — 0.0%      
First Empire Capital Trust II, 8.28%, 6/01/27     3,630   2,757,751   Deutsche Bank Contingent Capital Trust II, 6.55%   530   10,817  
HSBC America Capital Trust I, 7.81%, 12/15/26 (a)   2,000   1,978,198        
HSBC Capital Funding LP/Jersey Channel Islands,       Commercial Banks — 8.3%      
  10.18% (a)(b)(c)(f)       4,835   5,753,650   Barclays Bank Plc, 8.13%   225,000   5,298,750  
HSBC Finance Capital Trust IX, 5.91%, 11/30/35 (c)   7,300   5,767,000   First Tennessee Bank NA, 3.90% (a)(c)   4,650   2,332,266  
Lloyds Banking Group Plc, 6.66%, 11/21/49 (a)(c)   5,000   3,250,000   HSBC USA, Inc.:      
National City Preferred Capital Trust I, 12.00% (b)(c)   1,100   1,258,983         Series D, 4.50% (c)(g)   131,700   2,763,066  
NationsBank Capital Trust III, 0.83%, 1/15/27 (c)   13,470   8,627,037         Series H, 6.50%   120,000   2,436,000  
SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(b)(c)   3,550   3,848,910   Provident Financial Group, Inc., 7.75%   166,800   4,024,050  
Santander Perpetual SA Unipersonal,         Royal Bank of Scotland Group Plc, Series M, 6.40%   15,000   155,100  
  6.67%, 10/29/49 (a)(b)(c)       1,125   1,026,555   SG Preferred Capital II, 6.30% (a)(c)   23,000   13,800,000  
SunTrust Preferred Capital I, 5.85% (b)(c)     307   200,318   Santander Finance Preferred SA Unipersonal, 6.80%   117,094   3,203,692  
        49,269,078       34,012,924  
Diversified Financial Services — 3.7%         Diversified Financial Services — 1.9%      
AgFirst Farm Credit Bank, 8.39%, 12/15/16 (c)     4,000   3,041,668   Cobank ACB, 7.00% (a)(b)   152,000   5,305,758  
Farm Credit Bank of Texas, Series 1, 7.56% (b)(c)   2,500   1,753,875   ING Groep NV, 7.20%   140   2,451,769  
ING Capital Funding Trust III, 8.44% (b)(c)     6,066   5,171,265       7,757,527  
JPMorgan Chase Capital XXIII, 1.44%, 5/15/77 (c)   7,500   5,282,513   Electric Utilities — 3.4%      
        15,249,321   Alabama Power Co.:      
Electric Utilities — 0.6%                 5.83%   14,000   349,300  
PPL Capital Funding, 6.70%, 3/30/67 (c)     3,000   2,580,000         6.50%   145,000   4,350,000  
          Entergy Arkansas, Inc., 6.45%   114,400   2,420,281  
Insurance — 20.9%           Entergy Louisiana LLC, 6.95%   49,850   4,665,314  
AON Corp., 8.21%, 1/01/27       2,500   2,475,000   Interstate Power & Light Co., Series B, 8.38%   80,000   2,220,000  
AXA SA, 6.38% (a)(b)(c)       13,470   11,415,825        
Ace Capital Trust II, 9.70%, 4/01/30     5,000   5,526,140       14,004,895  
The Allstate Corp., 6.50%, 5/15/57 (c)     12,775   10,922,625   Insurance — 12.5%      
Chubb Corp., 6.38%, 3/29/67 (c)     2,000   1,815,000   Aspen Insurance Holdings Ltd., 7.40% (c)   194,000   3,938,200  
Farmers Exchange Capital, 7.05%, 7/15/28 (a)     2,500   2,141,357   Axis Capital Holdings Ltd.:      
GE Global Insurance Holding Corp., 7.75%, 6/15/30   10,000   10,207,480         Series A, 7.25%   129,300   2,915,715  
Genworth Financial, Inc., 6.15%, 11/15/66 (c)     3,000   2,010,000         Series B, 7.50% (c)   36,000   2,695,500  
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (a)(c)   2,925   3,071,250   Endurance Specialty Holdings Ltd., Series A, 7.75%   139,200   3,048,480  
Lincoln National Corp., 7.00%, 5/17/66 (c)     3,350   2,747,000   MetLife, Inc., Series B, 6.50%   904,400   19,652,612  
MetLife, Inc., 6.40%, 12/15/66     6,825   5,912,156   Prudential Plc, 6.50%   92,400   1,931,160  
Nationwide Life Global Funding I, 6.75%, 5/15/67   7,000   5,305,545   RenaissanceRe Holding Ltd., Series D, 6.60%   435,000   8,965,350  
Oil Casualty Insurance Ltd., 8.00%, 9/15/34 (a)   3,605   2,271,150   Zurich RegCaPS Funding Trust, 6.58% (a)(c)   9,800   7,699,125  
              50,846,142  
See Notes to Financial Statements.              
14   ANNUAL REPORT                                                 OCTOBER 31, 2009      

Schedule of Investments (continued)       BlackRock Credit Allocation Income Trust II, Inc. (PSY)  
              (Percentages shown are based on Net Assets)  
Preferred Stocks   Shares   Value   Short-Term Securities         Shares     Value  
Multi-Utilities — 0.9%       BlackRock Liquidity Funds, TempFund,            
Pacific Gas & Electric Co., Series A, 6.00%   140,000   $ 3,738,000     Institutional Class, 0.18% (h)(i)     41,019,397   $ 41,019,397  
Real Estate Investment Trusts (REITs) — 5.3%       Total Short-Term Securities              
BRE Properties, Inc., Series D, 6.75%   35,000   718,200   (Cost — $41,019,397) — 10.0%             41,019,397  
Developers Diversified Realty Corp., 8.00%   400,000   7,156,000   Total Investments (Cost — $524,066,199*) — 107.5%         440,148,651  
First Industrial Realty Trust, Inc., 6.24% (c)   2,390   1,058,322   Other Assets Less Liabilities — 33.8%           138,235,005  
Firstar Realty LLC, 8.88% (a)   4,000   3,412,500   Preferred Shares, at Redemption Value — (41.3)%       (169,090,727)  
Kimco Realty Corp., Series F, 6.65%   50,000   1,011,500                      
Public Storage:       Net Assets Applicable to Common Shares — 100.0%       $ 409,292,929  
       Series F, 6.45%   40,000   850,000   * The cost and unrealized appreciation (depreciation) of investments as of October 31,  
       Series I, 7.25%   160,000   3,816,000     2009, as computed for federal income tax purposes, were as follows:    
      Series M, 6.63%   71,900   1,542,255                      
Regency Centers Corp., Series D, 7.25%   100,000   2,175,000     Aggregate cost             $ 525,840,523  
    21,739,777     Gross unrealized appreciation         $ 9,977,374  
        Gross unrealized depreciation           (95,669,246)  
Wireless Telecommunication Services — 0.6%                          
Centaur Funding Corp., 9.08% (a)   2,423   2,431,329     Net unrealized depreciation           $ (85,691,872)  
Total Preferred Stocks — 32.9%     134,541,411   (a) Security exempt from registration under Rule 144A of the Securities Act of 1933.  
        These securities may be resold in transactions exempt from registration to qualified  
        institutional investors.              
  Shares     (b) Security is perpetual in nature and has no stated maturity date.      
Trust Preferreds   (000)       (c) Variable rate security. Rate shown is as of report date.        
Communications Equipment — 0.4%       (d) Non-income producing security.            
Corporate-Backed Trust Certificates, Motorola                          
  Debenture Backed Series 2002-14,         (e) Issuer filed for bankruptcy and/or is in default of interest payments.    
  8.38%, 11/15/28   80   1,778,167     (f) All or a portion of security held as collateral in connection with open reverse repur-  
Consumer Finance — 3.6%         chase agreements.                
Capital One Capital II, 7.50%, 6/15/66   668   14,799,807     (g) All or a portion of security has been pledged as collateral in connection with open  
Electric Utilities — 2.3%         financial futures contracts.              
Georgia Power Co., Series O, 1.48%, 4/15/33   50   1,229,393   (h) Investments in companies considered to be an affiliate of the Fund, for purposes of  
HECO Capital Trust III, 6.50%, 3/18/34   50   1,167,634     Section 2(a)(3) of the Investment Company Act of 1940, were as follows:  
National Rural Utilities Cooperative Finance Corp.,                          
  6.75%, 2/15/43   50   1,236,387               Net      
PPL Energy Supply LLC, 7.00%, 7/15/46   233   5,970,175     Affiliate           Activity     Income  
    9,603,589     BlackRock Liquidity Funds, TempFund,            
Gas Utilities — 3.7%             Institutional Class     $ 41,019,397     $ 70,651  
Southwest Gas Capital II, 7.70%, 9/15/43   605   14,940,766     BlackRock Liquidity Series, LLC            
            Cash Sweep Series     $(28,803,004)     $ 80,088  
Insurance — 2.7%                          
ABN AMRO North America Capital Funding Trust II,         (i) Represents the current yield as of report date.          
  2.87% (a)(b)(c)   11   477,570     •   For Fund compliance purposes, the Fund’s industry classifications refer to any one  
Lincoln National Capital VI, Series F,         or more of the industry sub-classifications used by one or more widely recognized  
  6.75%, 9/11/52   200   4,061,735     market indexes or ratings group indexes, and/or as defined by Fund management.  
W.R. Berkley Capital Trust II, 6.75%, 7/26/45   295   6,578,745     This definition may not apply for purposes of this report, which may combine indus-  
    11,118,050     try sub-classifications for reporting ease.            
Total Trust Preferreds — 12.7%     52,240,379     •   Reverse repurchase agreements outstanding as of October 31, 2009 were as follows:  
Total Preferred Securities — 94.9%     388,515,737         Interest       Trade   Maturity   Net Closing     Face  
Total Long-Term Investments         Counterparty   Rate   Date   Date   Amount     Amount  
(Cost — $483,046,802) — 97.5%     399,129,254     Barclays Bank Plc   0.75%   10/16/09   11/16/09 $ 9,516,732     $ 9,510,590  
        •   Financial futures contracts purchased as of October 31, 2009 were as follows:  
              Expiration   Notional     Unrealized  
        Contracts     Issue   Date   Amount     Appreciation  
        25   30-Year U.S.              
          Treasury Bonds December 2009   $2,969,061     $ 34,845  
        •   Credit default swaps on single-name issue — buy protection outstanding as of  
        October 31, 2009 were as follows:            
            Pay       Notional      
            Fixed   Counter-     Amount     Unrealized  
        Issuer     Rate   party   Expiration   (000)     Depreciation  
        Nordstrom, Inc.   5.20%   Deutsche   June          
              Bank AG   2014   $ 2,000     $ (337,904)  
See Notes to Financial Statements.                          
                                                          ANNUAL REPORT             OCTOBER 31, 2009         15  

Schedule of Investments (concluded)     BlackRock Credit Allocation Income Trust II, Inc. (PSY)  
• Fair Value Measurements — Various inputs are used in determining the fair value of   The following tables summarize the inputs used as of October 31, 2009 in  
  investments, which are as follows:   determining the fair valuation of the Fund’s investments:    
  • Level 1 — price quotations in active markets/exchanges for identical assets           Investments in  
      and liabilities   Valuation Inputs           Securities  
  • Level 2 — other observable inputs (including, but not limited to: quoted prices for                   Assets  
      similar assets or liabilities in markets that are active, quoted prices for identical   Level 1          
      or similar assets or liabilities in markets that are not active, inputs other than     Long-Term Investments:        
      quoted prices that are observable for the assets or liabilities (such as interest       Preferred Stocks       $ 84,696,966  
      rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and       Trust Preferreds       51,762,809  
      default rates) or other market-corroborated inputs)   Short-Term Securities       41,019,397  
  • Level 3 — unobservable inputs based on the best information available in the   Total Level 1       177,479,172  
      circumstances, to the extent observable inputs are not available (including the   Level 2          
      Fund’s own assumptions used in determining the fair value of investments)     Long-Term Investments:        
  The inputs or methodology used for valuing securities are not necessarily an indica-       Capital Trusts       199,462,797  
  tion of the risk associated with investing in those securities. For information about       Corporate Bonds       10,347,396  
  the Fund’s policy regarding valuation of investments and other significant accounting       Preferred Stocks       36,044,445  
  policies, please refer to Note 1 of the Notes to Financial Statements.       Trust Preferreds       477,570  
    Total Level 2       246,332,208  
    Level 3          
      Long-Term Investments:        
        Capital Trusts       2,271,150  
        Corporate Bonds       266,121  
        Preferred Stocks       13,800,000  
    Total Level 3       16,337,271  
    Total         $ 440,148,651  
          Other Financial  
    Valuation Inputs     Instruments 1  
          Assets   Liabilities  
    Level 1       $ 34,845   —  
    Level 2       —   $ (337,904)  
    Level 3       —   —  
    Total       $ 34,845   $ (337,904)  
    1 Other financial instruments are financial futures contracts and swaps. Financial  
    futures contracts and swaps are valued at the unrealized appreciation/  
          depreciation on the instrument.      
  The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:        
        Investments in Securities    
      Capital   Corporate   Preferred    
      Trusts   Bonds   Stocks   Total  
  Balance, as of October 31, 2008     —   —   —   —  
  Accrued discounts/premiums     —   —   —   —  
  Realized gain (loss)     —   —   —   —  
  Change in unrealized appreciation/depreciation     —   —   —   —  
  Net purchases (sales)     —   —   —   —  
  Net transfers in/out of Level 3   $ 2,271,150   $ 266,121   $ 13,800,000   $ 16,337,271  
  Balance, as of October 31, 2009   $ 2,271,150   $ 266,121   $ 13,800,000   $ 16,337,271  
See Notes to Financial Statements.            
16   ANNUAL REPORT     OCTOBER 31, 2009      

Schedule of Investments October 31, 2009   BlackRock Credit Allocation Income Trust III (BPP)  
        (Percentages shown are based on Net Assets)  
    Par         Par    
Corporate Bonds     (000)   Value   Capital Trusts     (000)   Value  
Commercial Banks — 0.5%         Insurance — 12.2%        
RESPARCS Funding LP I, 8.00% (a)(b)(c)   $ 4,000   $ 1,000,000   AXA SA, 6.38% (a)(d)(e)   $ 7,150   $ 6,059,625  
Containers & Packaging — 0.1%         The Allstate Corp., 6.50%, 5/15/57 (e)     6,350   5,429,250  
Impress Holdings BV, 3.41%, 9/15/13 (d)(e)     240   228,300   Chubb Corp., 6.38%, 3/29/67 (e)(h)     900   816,750  
        Genworth Financial, Inc., 6.15%, 11/15/66 (e)     1,475   988,250  
Hotels, Restaurants & Leisure — 0.0%         Liberty Mutual Group, Inc., 10.75%, 6/15/88 (d)(e)     900   945,000  
Greektown Holdings, LLC, 10.75%, 12/01/13 (b)(c)(d)   362   72,400   Lincoln National Corp., 7.00%, 5/17/66 (e)     900   738,000  
Insurance — 5.2%         MetLife, Inc., 6.40%, 12/15/66     900   779,625  
Kingsway America, Inc., 7.50%, 2/01/14     9,000   7,200,000   Nationwide Life Global Funding I, 6.75%, 5/15/67     900   682,141  
QBE Insurance Group Ltd., 9.75%, 3/14/14 (d)     2,975   3,398,488   Progressive Corp., 6.70%, 6/15/67 (e)     900   788,352  
        Reinsurance Group of America, 6.75%, 12/15/65 (e)   1,300   1,007,500  
      10,598,488   The Travelers Cos., Inc., 6.25%, 3/15/67 (e)(h)     900   810,000  
Machinery — 0.2%         White Mountains Re Group Ltd., 7.51% (a)(d)(e)     2,600   2,147,808  
AGY Holding Corp., 11.00%, 11/15/14     460   374,900   ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (d)(e)     190   153,613  
        ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (d)(e)     2,209   1,789,290  
Media — 1.7%                
        Zenith National Insurance Capital Trust I,        
CMP Susquehanna Corp., 4.75%, 5/15/14 (d)     9   180          
        8.55%, 8/01/28 (d)     1,800   1,719,000  
Comcast Holdings Corp., 2.00%, 11/15/29 (f)     110   3,089,285          
Local Insight Regatta Hldgs, Inc., 11.00%, 12/01/17   700   343,000         24,854,204  
      3,432,465   Multi-Utilities — 0.4%        
        Puget Sound Energy, Inc., Series A, 6.97%, 6/01/67 (e)   925   809,301  
Oil, Gas & Consumable Fuels — 0.0%                
EXCO Resources, Inc., 7.25%, 1/15/11     75   74,625   Oil, Gas & Consumable Fuels — 0.4%        
        TransCanada PipeLines Ltd., 6.35%, 5/15/67 (e)     900   837,716  
Paper & Forest Products — 0.5%                
International Paper Co., 8.70%, 6/15/38     900   1,037,019   Total Capital Trusts — 31.9%       65,062,367  
Professional Services — 0.1%                
FTI Consulting, Inc., 7.75%, 10/01/16     100   100,500          
Specialty Retail — 0.0%         Preferred Stocks     Shares    
Lazy Days’ R.V. Center, Inc., 11.75%, 5/15/12 (b)(c)   1,182   11,820          
        Capital Markets — 0.0%        
Total Corporate Bonds — 8.3%       16,930,517   Lehman Brothers Holdings Inc., Series D, 5.67% (b)(c)   31,100   9,641  
        Commercial Banks — 8.6%        
        Banesto Holdings, Ltd. Series A, 10.50% (d)     30,000   669,375  
Preferred Securities         Barclays Bank Plc, 8.13%     100,000   2,355,000  
        First Republic Preferred Capital Corp., 7.25%     117,045   2,130,219  
Capital Trusts         HSBC USA, Inc., Series H, 6.50%     330,000   6,699,000  
        Royal Bank of Scotland Group Plc, Series M, 6.40%     10,000   103,400  
Building Products — 0.7%         Santander Finance Preferred SA Unipersonal 6.80%     38,500   1,053,360  
C8 Capital SPV Ltd., 6.64% (a)(d)(e)     1,945   1,371,458   Union Planter Preferred Funding Corp., 7.75% (d)     60   4,550,625  
Capital Markets — 3.9%               17,560,979  
State Street Capital Trust III, 8.25% (a)(e)     1,385   1,396,952          
        Diversified Financial Services — 2.3%        
State Street Capital Trust IV, 1.30%, 6/01/67 (e)     9,675   6,491,006   ING Groep NV, 7.20%     70   1,225,885  
      7,887,958   JPMorgan Chase & Co., Series E, 6.15%     75,000   3,531,750  
Commercial Banks — 9.4%               4,757,635  
Bank of Ireland Capital Funding II, LP, 5.57% (a)(d)(e)   854   375,760   Electric Utilities — 0.7%        
Bank of Ireland Capital Funding III, LP, 6.11% (a)(d)(e)   1,471   647,240   Alabama Power Co., 6.50%     50,000   1,500,000  
Barclays Bank Plc, 5.93% (a)(d)(e)     890   694,200          
CBA Capital Trust I, 5.81% (a)(d)     5,000   4,550,000   Insurance — 15.9%        
FCB/NC Capital Trust I, 8.05%, 3/01/28     1,100   936,369   Arch Capital Group Ltd., Series A, 8.00%     117,414   2,841,419  
        Aspen Insurance Holdings Ltd., 7.40% (e)     115,000   2,334,500  
Lloyds TSB Bank Plc, 6.90% (a)     4,399   3,343,240          
        Endurance Specialty Holdings Ltd., Series A, 7.75%     172,400   3,775,560  
NBP Capital Trust III, 7.38% (a)     2,000   1,485,000          
        MetLife, Inc., Series B, 6.50%     314,500   6,834,085  
National City Preferred Capital Trust I, 12.00% (a)(e)     600   686,718   PartnerRe Ltd., Series C, 6.75%     209,400   4,634,022  
SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(d)(e)     1,725   1,870,245   Prudential Plc, 6.50%     62,000   1,295,800  
Santander Perpetual SA Unipersonal, 6.67%(a)(d)(e)   625   570,308   Prudential Plc, 6.50% (a)     6,000   4,875,000  
SunTrust Preferred Capital I, 5.85% (a)(e)     303   197,708   RenaissanceRe Holding Ltd., Series D, 6.60%     210,000   4,328,100  
Wells Fargo Capital XIII Series GMTN, 7.70% (a)(e)     1,700   1,581,000   Zurich RegCaPS Funding Trust, 6.58% (d)(e)     2,000   1,571,250  
Westpac Capital Trust IV, 5.26% (a)(d)(e)     3,000   2,367,210          
              32,489,736  
      19,304,998          
        Media — 0.0%        
Diversified Financial Services — 4.5%         CMP Susquemanna Radio Holdings Corp.,        
JPMorgan Chase Capital XXI, Series U,         0.00% (b)(d)(e)     2,052   —  
1.23%, 2/02/37 (e)(g)     7,125   4,862,898          
        Real Estate Investment Trusts (REITs) — 2.3%        
JPMorgan Chase Capital XXIII, 1.44%, 5/15/77 (e)     6,190   4,359,834   BRE Properties, Inc., Series D, 6.75%     20,000   410,400  
      9,222,732   Public Storage:        
Electric Utilities — 0.4%         Series F, 6.45%     20,000   425,000  
PPL Capital Funding, 6.70%, 3/30/67 (e)     900   774,000   Series M, 6.63%     35,000   750,750  
        SunTrust Real Estate Investment Trust, 9.00% (d)     30   3,027,189  
              4,613,339  
See Notes to Financial Statements.         Total Preferred Stocks — 29.8%       60,931,330  
ANNUAL REPORT                                                           OCTOBER 31, 2009     17  

Schedule of Investments (continued)         BlackRock Credit Allocation Income Trust III (BPP)  
                (Percentages shown are based on Net Assets)  
    Shares                        
Trust Preferreds     (000)   Value   Short-Term Securities           Shares     Value  
Capital Markets — 1.2%         BlackRock Liquidity Funds, TempFund,            
Structured Asset Trust Unit Repackagings:         Institutional Class, 0.18% (j)(k)     51,450,797   $ 51,450,797  
  Credit Suisse First Boston (USA), Inc., Debenture       Total Short-Term Securities              
  Backed, Series 2003-13, 6.25%, 7/15/32   11   $ 250,671   (Cost — $51,450,797) — 25.2%             51,450,797  
  Goldman Sachs Group, Inc., Debenture Backed,                          
  Series 2003-06, 6.00%, 2/15/33   103   2,179,215   Total Investments (Cost — $256,459,826*) — 109.6%         223,807,066  
        Other Assets Less Liabilities — 24.9%           50,753,074  
      2,429,886   Preferred Shares, at Redemption Value — (34.5)%         (70,426,884)  
Commercial Banks — 2.0%         Net Assets Applicable to Common Shares — 100.0%       $ 204,133,256  
Mizuho Capital Investment 1 Ltd., 6.69% (a)(d)(e)   5,000   4,170,930                      
Diversified Financial Services — 0.1%       * The cost and unrealized appreciation (depreciation) of investments as of October 31,  
PPLUS Trust Certificates, Series VAL-1 Class A,         2009, as computed for federal income tax purposes, were as follows:    
  7.25%, 4/15/32     11   263,407     Aggregate cost             $ 257,997,371  
Food Products — 1.2%           Gross unrealized appreciation         $ 3,697,471  
Corporate-Backed Trust Certificates, Kraft Foods, Inc.,         Gross unrealized depreciation           ( 37,887,776)  
  Debenture Backed, Series 2003-11,         Net unrealized depreciation         $ ( 34,190,305)  
  5.88%, 11/01/31     100   2,417,000                      
        (a) Security is perpetual in nature and has no stated maturity date.      
Insurance — 1.1%                            
Everest Re Capital Trust, 6.20%, 3/29/34   30   597,330   (b) Non-income producing security.            
Financial Security Assurance Holdings Ltd.,         (c) Issuer filed for bankruptcy and/or is in default of interest payments.    
  5.60%, 7/15/03     15   193,235   (d) Security exempt from registration under Rule 144A of the Securities Act of 1933.  
The Phoenix Cos., Inc., 7.45%, 1/15/32   79   1,423,286     These securities may be resold in transactions exempt from registration to qualified  
      2,213,851     institutional investors.              
Media — 6.0%           (e) Variable rate security. Rate shown is as of report date.        
Comcast Corp.:           (f) Convertible security.              
7.00%, 9/15/55     50   1,210,942     (g) All or a portion of security held as collateral in connection with open financial  
6.63%, 5/15/56     470   10,786,500     futures contracts.                
Corporate-Backed Trust Certificates, News       (h) All or a portion of security held as collateral in connection with open reverse repur-  
  America Debenture Backed, Series 2002-9,         chase agreements.                
  8.13%, 12/01/45     7   169,606                      
          (i) Warrants entitle the Fund to purchase a predetermined number of shares of com-  
      12,167,048     mon stock and are non-income producing. The purchase price and number of  
Oil, Gas & Consumable Fuels — 1.8%         shares are subject to adjustment under certain conditions until the expiration date.  
Nexen, Inc., 7.35%, 11/01/43   155   3,623,900   (j) Investments in companies considered to be an affiliate of the Fund, for purposes of  
Wireless Telecommunication Services — 0.7%         Section 2(a)(3) of the Investment Company Act of 1940, were as follows:  
Structured Repackaged Asset-Backed Trust Securities,                     Net      
  Sprint Capital Corp., Debenture Backed, Series         Affiliate             Activity     Income  
  2004-2, 6.50%, 11/15/28     103   1,526,233                      
          BlackRock Liquidity Funds, TempFund,            
Total Trust Preferreds — 14.1%     28,812,555     Institutional Class     $51,450,797     $127,321  
Total Preferred Securities — 75.8%     154,805,952     (k) 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 ratings group indexes, and/or as defined by Fund management.  
Warrants (i)     Shares       This definition may not apply for purposes of this report, which may combine indus-  
Media — 0.0%           try sub-classifications for reporting ease.            
CMP Susquemanna Radio Holdings Corp.         •   Reverse repurchase agreements outstanding as of October 31, 2009 were as follows:  
  (expires 3/26/19) (d)     2,345   —         Interest   Trade   Maturity     Net Closing     Face  
Total Warrants — 0.0%       —     Counterparty   Rate   Date   Date     Amount     Amount  
          Barclays Bank Plc   0.75%   10/16/09   11/02/09 $13,239,375     $13,234,688  
          •   Financial futures contracts purchased as of October 31, 2009 were as follows:  
Investment Companies                 Expiration   Notional     Unrealized  
          Contracts     Issue   Date     Value     Appreciation  
Ultra Short Real Estate Proshares   60,000   619,800                      
Total Investment Companies — 0.3%     619,800     14   30-Year U.S.              
            Treasury Bond December 2009 $ 1,662,675     $ 19,513  
Total Long Term Investments                            
(Cost — $205,009,029) — 84.4%     172,356,269     •   Credit default swaps on single-name issue — buy protection outstanding as of  
          October 31, 2009 were as follows:            
              Pay         Notional      
              Fixed   Counter-       Amount     Unrealized  
          Issuer     Rate   party   Expiration   (000)     Depreciation  
          Nordstrom, Inc.   5.20%   Deutsche   June          
                Bank AG   2014     $1,000     $ (168,952)  
See Notes to Financial Statements.                          
18   ANNUAL REPORT               OCTOBER 31, 2009          

Schedule of Investments (concluded)   BlackRock Credit Allocation Income Trust III (BPP)  
• Fair Value Measurements — Various inputs are used in determining the fair value of   The following tables summarize the inputs used as of October 31, 2009 in deter-  
        investments, which are as follows:   mining the fair valuation of the Fund’s investments:        
        • Level 1 — price quotations in active markets/exchanges for identical assets           Investments in  
            and liabilities   Valuation Inputs             Securities  
        • Level 2 — other observable inputs (including, but not limited to: quoted prices             Assets  
            for similar assets or liabilities in markets that are active, quoted prices for iden-   Level 1            
            tical or similar assets or liabilities in markets that are not active, inputs other     Long-Term Investments:            
            than quoted prices that are observable for the assets or liabilities (such as       Preferred Stocks         $ 46,237,891  
            interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit       Trust Preferreds           24,448,090  
            risks and default rates) or other market-corroborated inputs)       Investment Companies           619,800  
        • Level 3 — unobservable inputs based on the best information available in the     Short-Term Securities           51,450,797  
            circumstances, to the extent observable inputs are not available (including the   Total Level 1         122,756,578  
            Fund’s own assumptions used in determining the fair value of investments)   Level 2            
        The inputs or methodology used for valuing securities are not necessarily an     Long-Term Investments:            
        indication of the risk associated with investing in those securities. For information       Corporate Bonds           16,918,517  
        about the Fund’s policy regarding valuation of investments and other significant       Capital Trusts           65,062,367  
        accounting policies, please refer to Note 1 of the Notes to Financial Statements.       Preferred Stocks           11,666,250  
      Trust Preferreds           4,364,165  
  Total Level 2           98,011,299  
  Level 3            
    Long-Term Investments:            
      Corporate Bonds           12,000  
      Preferred Stocks           3,027,189  
  Total Level 3           3,039,189  
  Total         $ 223,807,066  
        Other Financial  
  Valuation Inputs       Instruments 1  
        Assets     Liabilities  
  Level 1     $ 19,513     —  
  Level 2       —   $ (168,952)  
  Level 3       —     —  
  Total     $ 19,513   $ (168,952)  
    1 Other financial instruments are financial futures contracts and swaps.  
        Financial futures contracts and swaps are valued at the unrealized    
        appreciation/depreciation on the instrument.        
        The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:            
      Investments in Securities    
    Corporate   Preferred      
    Bonds     Stocks     Total  
        Balance, as of October 31, 2008     —     —     —  
        Accrued discounts/premiums     —     —     —  
        Realized gain (loss)     —     —     —  
        Change in unrealized appreciation/depreciation     —     —     —  
        Net purchases (sales)     —     —     —  
        Net transfers in/out of Level 3   $ 12,000   $ 3,027,189   $ 3,039,189  
        Balance, as of October 31, 2009   $ 12,000   $ 3,027,189   $ 3,039,189  
See Notes to Financial Statements.              
ANNUAL REPORT   OCTOBER 31, 2009       19  

Schedule of Investments October 31, 2009   BlackRock Credit Allocation Income Trust IV (BTZ)  
        (Percentages shown are based on Net Assets)  
Common Stocks     Shares             Value   Common Stocks   Shares               Value  
Aerospace & Defense — 0.1%       Diversified Financial Services — 0.3%      
Honeywell International, Inc.     1,800   $ 64,602   Bank of America Corp.   36,800   $ 536,544  
Lockheed Martin Corp.     3,800   261,402   JPMorgan Chase & Co.   21,100   881,347  
Northrop Grumman Corp.     5,200   260,676   NYSE Euronext   9,100   235,235  
United Technologies Corp.     1,800   110,610       1,653,126  
      697,290   Diversified Telecommunication Services — 0.3%      
Air Freight & Logistics — 0.1%       AT&T Inc.   38,887   998,229  
United Parcel Service, Inc. Class B   8,800   472,384   CenturyTel, Inc.   4,339   140,844  
Auto Components — 0.0%         Verizon Communications, Inc.   20,900   618,431  
Johnson Controls, Inc.     3,700   88,504       1,757,504  
Beverages — 0.2%         Electric Utilities — 0.1%      
The Coca-Cola Co.     14,300   762,333   American Electric Power Co., Inc.   2,200   66,484  
PepsiCo, Inc.     5,800   351,190   Duke Energy Corp.   20,200   319,564  
      1,113,523   FirstEnergy Corp.   1,300   56,264  
        Progress Energy, Inc.   5,400   202,662  
Biotechnology — 0.2%         The Southern Co.   8,700   271,353  
Amgen, Inc. (a)     6,900   370,737        
Biogen Idec, Inc. (a)     2,500   105,325       916,327  
Celgene Corp. (a)     3,500   178,675   Electrical Equipment — 0.1%      
Genzyme Corp. (a)     1,700   86,020   Emerson Electric Co.   10,900   411,475  
Gilead Sciences, Inc. (a)     7,100   302,105   Rockwell Automation, Inc.   5,400   221,130  
      1,042,862       632,605  
Capital Markets — 0.1%         Electronic Equipment, Instruments      
Federated Investors, Inc. Class B   6,700   175,875   & Components — 0.0%      
The Goldman Sachs Group, Inc.   1,360   231,431   Corning, Inc.   8,600   125,646  
Morgan Stanley     3,000   96,360   Tyco Electronics Ltd.   5,200   110,500  
      503,666       236,146  
Chemicals — 0.2%         Energy Equipment & Services — 0.1%      
Air Products & Chemicals, Inc.     900   69,417   National Oilwell Varco, Inc. (a)   5,600   229,544  
E.I. du Pont de Nemours & Co.   14,800   470,936   Schlumberger Ltd.   5,500   342,100  
Monsanto Co.     2,900   194,822   Smith International, Inc.   5,418   150,241  
PPG Industries, Inc.     3,900   220,077       721,885  
      955,252   Food & Staples Retailing — 0.2%      
Commercial Banks — 0.8%         CVS Caremark Corp.   3,400   120,020  
Citizens Banking Corp. (a)     6,406,596   3,856,771   SUPERVALU, Inc.   8,300   131,721  
M&T Bank Corp.     4,200   263,970   SYSCO Corp.   9,600   253,920  
Regions Financial Corp.     38,400   185,856   Wal-Mart Stores, Inc.   15,200   755,136  
Wells Fargo & Co.     33,300   916,416   Walgreen Co.   6,400   242,112  
      5,223,013       1,502,909  
Commercial Services & Supplies — 0.1%       Food Products — 0.1%      
Avery Dennison Corp.     7,900   281,635   Kraft Foods, Inc.   12,135   333,955  
Pitney Bowes, Inc.     10,800   264,600   Sara Lee Corp.   20,200   228,058  
Waste Management, Inc.     7,700   230,076       562,013  
      776,311   Health Care Equipment & Supplies — 0.1%      
Communications Equipment — 0.2%       Baxter International, Inc.   1,900   102,714  
Cisco Systems, Inc. (a)     23,400   534,690   Becton Dickinson & Co.   3,400   232,424  
Motorola, Inc.     34,800   298,236   Boston Scientific Corp. (a)   5,900   47,908  
QUALCOMM, Inc.     8,900   368,549   Covidien Plc   5,200   219,024  
      1,201,475   Medtronic, Inc.   2,000   71,400  
Computers & Peripherals — 0.4%           673,470  
Apple, Inc. (a)     6,000   1,131,000   Health Care Providers & Services — 0.1%      
Dell, Inc. (a)     14,900   215,901   Aetna, Inc.   2,400   62,472  
EMC Corp. (a)     13,900   228,933   Express Scripts, Inc. (a)   3,400   271,728  
Hewlett-Packard Co.     8,800   417,648   Medco Health Solutions, Inc. (a)   4,300   241,316  
International Business Machines Corp.   5,800   699,538   UnitedHealth Group, Inc.   2,400   62,280  
      2,693,020   WellPoint, Inc. (a)   4,500   210,420  
Distributors — 0.0%             848,216  
Genuine Parts Co.     7,300   255,427   Hotels, Restaurants & Leisure — 0.1%      
        McDonald’s Corp.   8,700   509,907  
        Starwood Hotels & Resorts Worldwide, Inc.   12,300   357,438  
            867,345  
See Notes to Financial Statements.            
20   ANNUAL REPORT                                                 OCTOBER 31, 2009      

Schedule of Investments (continued)     BlackRock Credit Allocation Income Trust IV (BTZ)  
        (Percentages shown are based on Net Assets)  
Common Stocks   Shares       Value   Common Stocks   Shares               Value  
Household Durables — 0.2%         Multiline Retail — 0.1%      
Black & Decker Corp.   5,700   $ 269,154   Macy's, Inc.   18,400   $ 323,288  
Fortune Brands, Inc.   6,400     249,280   Oil, Gas & Consumable Fuels — 0.9%      
KB Home   15,100     214,118   Anadarko Petroleum Corp.   5,000   304,650  
Whirlpool Corp.   5,800     415,222   Apache Corp.   1,800   169,416  
      1,147,774   Chevron Corp.   13,400   1,025,636  
Household Products — 0.2%         ConocoPhillips   13,000   652,340  
Clorox Co.   4,200     248,766   Exxon Mobil Corp.   27,800   1,992,426  
The Procter & Gamble Co.   17,400     1,009,200   Hess Corp.   3,700   202,538  
        Massey Energy Co.   5,400   157,086  
      1,257,966   Occidental Petroleum Corp.   1,700   128,996  
IT Services — 0.1%         Peabody Energy Corp.   5,500   217,745  
Automatic Data Processing, Inc.   6,700     266,660   Southwestern Energy Co. (a)   5,500   239,690  
Cognizant Technology Solutions Corp. (a)   3,400     131,410   Spectra Energy Corp.   14,700   281,064  
MasterCard, Inc. Class A   409     89,579   XTO Energy, Inc.   6,900   286,764  
Paychex, Inc.   9,700     275,577       5,658,351  
      763,226   Paper & Forest Products — 0.1%      
Industrial Conglomerates — 0.2%         MeadWestvaco Corp.   15,300   349,299  
3M Co.   6,900     507,633   Weyerhaeuser Co.   5,600   203,504  
General Electric Co.   43,400     618,884       552,803  
Textron, Inc.   23,400     416,052        
        Pharmaceuticals — 0.6%      
      1,542,569   Abbott Laboratories   10,400   525,928  
Insurance — 0.3%         Bristol-Myers Squibb Co.   17,800   388,040  
Aflac, Inc.   10,600     439,794   Eli Lilly & Co.   9,900   336,699  
The Allstate Corp.   8,700     257,259   Johnson & Johnson   17,900   1,056,995  
Cincinnati Financial Corp.   8,500     215,560   Merck & Co., Inc.   16,000   494,880  
Lincoln National Corp.   13,000     309,790   Pfizer, Inc. (b)   31,504   536,513  
MetLife, Inc.   10,600     360,718   Schering-Plough Corp.   13,000   366,600  
Principal Financial Group, Inc.   9,200     230,368       3,705,655  
      1,813,489   Real Estate Investment Trusts (REITs) — 0.1%      
Internet & Catalog Retail — 0.0%         AvalonBay Communities, Inc.   4,200   288,876  
Amazon.com, Inc. (a)   810     96,236   Boston Properties, Inc.   4,300   261,311  
Internet Software & Services — 0.2%         Public Storage   1,200   88,320  
eBay, Inc. (a)   14,300     318,461   Vornado Realty Trust   4,978   296,490  
Google, Inc. Class A (a)   1,160     621,899       934,997  
Yahoo! Inc. (a)   9,600     152,640   Road & Rail — 0.0%      
      1,093,000   Norfolk Southern Corp.   5,900   275,058  
Leisure Equipment & Products — 0.0%         Semiconductors & Semiconductor Equipment — 0.2%      
Mattel, Inc.   11,600     219,588   Applied Materials, Inc.   5,200   63,440  
Life Sciences Tools & Services — 0.0%         Intel Corp.   40,700   777,777  
Thermo Fisher Scientific, Inc. (a)   2,600     117,000   Linear Technology Corp.   7,900   204,452  
        Microchip Technology, Inc.   8,900   213,244  
Machinery — 0.1%         National Semiconductor Corp.   9,500   122,930  
Caterpillar, Inc.   8,500     468,010   Texas Instruments, Inc.   9,300   218,085  
Cummins, Inc.   4,200     180,852        
Deere & Co.   2,800     127,540       1,599,928  
      776,402   Software — 0.3%      
        Autodesk, Inc. (a)   7,700   191,961  
Media — 0.0%         Microsoft Corp.   46,100   1,278,353  
Comcast Corp. Class A   6,900     100,050   Oracle Corp. (b)   21,000   443,100  
The DIRECTV Group, Inc. (a)   6,400     168,320        
            1,913,414  
      268,370        
        Specialty Retail — 0.2%      
Metals & Mining — 0.1%         Home Depot, Inc.   18,100   454,129  
Alcoa, Inc. (b)   24,500     304,290   Limited Brands, Inc.   16,100   283,360  
Nucor Corp.   5,400     215,190   Staples, Inc.   12,300   266,910  
      519,480       1,004,399  
Multi-Utilities — 0.2%         Textiles, Apparel & Luxury Goods — 0.0%      
Consolidated Edison, Inc.   5,400     219,672   VF Corp.   2,900   206,016  
Dominion Resources, Inc.   2,200     74,998        
Integrys Energy Group, Inc.   5,500     190,300   Thrifts & Mortgage Finance — 0.0%      
Public Service Enterprise Group, Inc.   7,900     235,420   Hudson City Bancorp, Inc.   19,000   249,660  
TECO Energy, Inc.   8,900     127,626        
Xcel Energy, Inc.   10,400     196,144        
      1,044,160        
See Notes to Financial Statements.              
                                                          ANNUAL REPORT                                                             OCTOBER 31, 2009     21  

Schedule of Investments (continued)   BlackRock Credit Allocation Income Trust IV (BTZ)  
        (Percentages shown are based on Net Assets)  
            Par    
Common Stocks     Shares   Value   Capital Trusts     (000)   Value  
Tobacco — 0.2%         Commercial Banks (concluded)        
Altria Group, Inc. (b)     20,500   $ 371,255   Commonwealth Bank of Australia, 6.02% (d)(e)(g)   $ 20,000   $ 16,400,000  
Philip Morris International, Inc.   16,600   786,176   HSBC Capital Funding LP/Jersey Channel Islands,        
      1,157,431   10.18% (d)(e)(g)     7,000   8,330,000  
        Lloyds Banking Group Plc, 6.66% (d)(e)(g)     10,000   6,500,000  
Total Common Stocks — 8.2%     53,634,533   SMFG Preferred Capital USD 1 Ltd., 6.08% (d)(e)(g)     10,000   8,637,700  
        SMFG Preferred Capital USD 3 Ltd., 9.50% (d)(e)(g)     3,850   4,174,170  
        Santander Perpetual SA Unipersonal, 6.67%, (d)(e)(g)   1,300   1,186,241  
    Par     Shinsei Finance II (Cayman) Ltd., 7.16% (d)(e)(g)     1,005   588,240  
Corporate Bonds     (000)     Standard Chartered Bank, 7.014% (d)(e)(g)     5,000   4,550,000  
Capital Markets — 0.0%         Wells Fargo & Co. Series K, 7.98% (d)(e)     12,985   12,157,206  
Lehman Brothers Holdings, Inc. (a)(c):       Wells Fargo Capital XIII Series GMTN, 7.70% (d)(e)     3,900   3,627,000  
      3.95%, 11/10/09     $ 105   16,537         96,798,182  
      4.38%, 11/30/10     325   51,187   Diversified Financial Services — 3.6%        
      67,724   JPMorgan Chase Capital XXI Series U,        
Computers & Peripherals — 0.8%       1.23%, 2/02/37 (d)     12,875   8,787,342  
International Business Machines Corp.,       JPMorgan Chase Capital XXIII, 1.44%, 5/15/77 (d)(f)   20,695   14,576,213  
8.00%, 10/15/38     4,000   5,461,952         23,363,555  
Diversified Financial Services — 1.2%       Electric Utilities — 0.5%        
ING Groep NV, 5.78% (d)(e)(f)   10,000   7,300,000   PPL Capital Funding, 6.70%, 3/30/67 (d)     3,900   3,354,000  
Stan IV Ltd., 2.74%, 7/20/11 (d)   283   240,550   Insurance — 9.7%        
      7,540,550   AXA SA, 6.46% (d)(e)(g)     12,000   9,885,000  
Insurance — 0.9%         The Allstate Corp., 6.50%, 5/15/57 (d)     8,675   7,417,125  
QBE Insurance Group Ltd., 9.75%, 3/14/14 (g)   4,973   5,680,902   Chubb Corp., 6.38%, 3/29/67 (d)(f)     4,000   3,630,000  
        Liberty Mutual Group, Inc., 10.75%, 6/15/88 (d)(g)     4,000   4,200,000  
Metals & Mining — 0.0%         Lincoln National Corp., 7.00%, 5/17/66 (d)     4,255   3,489,100  
Aleris International, Inc., 10.00%, 12/15/16 (a)(c)   5,000   43,750   MetLife, Inc., 6.40%, 12/15/66     4,550   3,941,437  
Multi-Utilities — 1.5%         Nationwide Life Global Funding I, 6.75%, 5/15/67     4,000   3,031,740  
Dominion Resources, Inc., 8.88%, 1/15/19   8,000   10,098,472   Progressive Corp., 6.70%, 6/15/67 (d)(f)     4,000   3,503,788  
Paper & Forest Products — 0.6%       Reinsurance Group of America, 6.75%, 12/15/65 (d)(f)   15,000   11,625,000  
International Paper Co., 8.70%, 6/15/38 (b)   3,100   3,571,953   Swiss Re Capital I LP, 6.854% (d)(e)(g)     3,000   2,310,000  
        The Travelers Cos., Inc., 6.25%, 3/15/67 (d)(f)     4,000   3,600,000  
Total Corporate Bonds — 5.0%     32,465,303   White Mountains Re Group Ltd., 7.506% (d)(e)(g)     4,400   3,634,752  
        ZFS Finance (USA) Trust IV, 5.88%, 5/09/32 (d)(g)     599   484,286  
        ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (d)(g)     3,331   2,698,110  
              63,450,338  
Investment Companies     Shares            
        Multi-Utilities — 0.2%        
UltraShort Real Estate ProShares   150,000   1,549,500   Puget Sound Energy, Inc. Series A, 6.97%, 6/01/67 (d)   1,575   1,377,999  
Total Investment Companies — 0.2%     1,549,500   Oil, Gas & Consumable Fuels — 1.2%        
        Enterprise Products Operating LLC, 8.38%, 8/01/66 (d)   4,500   4,410,000  
        TransCanada PipeLines Ltd., 6.35%, 5/15/67 (d)(f)     4,000   3,723,180  
Preferred Securities               8,133,180  
    Par     Real Estate Investment Trusts (REITs) — 1.6%        
Capital Trusts     (000)     Sovereign Real Estate Investment Corp., 12.00% (g)     10,000   10,500,000  
Building Products — 0.9%         Total Capital Trusts — 35.5%       232,306,446  
C8 Capital SPV Ltd., 6.64% (d)(e)(g)   $ 3,160   2,228,179          
C10 Capital SPV Ltd., 6.72% (d)(e)(g)   5,000   3,542,750          
      5,770,929          
Capital Markets — 3.0%         Preferred Stocks     Shares    
Credit Suisse Guernsey Ltd., 5.86% (d)(e)   1,050   866,250   Commercial Banks — 4.8%        
State Street Capital Trust III, 8.25% (d)(e)   1,740   1,755,016   HSBC USA, Inc. Series H, 6.50%     977,766   19,848,650  
State Street Capital Trust IV, 1.30%, 6/01/67 (d)   25,245   16,936,997   Royal Bank of Scotland Group Plc Series M, 6.40%     15,000   155,100  
      19,558,263   Santander Finance Preferred SA Unipersonal, 10.50%   419,881   11,487,944  
Commercial Banks — 14.8%               31,491,694  
BB&T Capital Trust IV, 6.82%, 6/12/77 (d)(f)   15,300   13,559,625   Diversified Financial Services — 2.0%        
Bank of Ireland Capital Funding II, LP, 5.57% (d)(e)(g)   1,422   625,680   Cobank ACB, 7.00% (g)     150,000   5,235,945  
Bank of Ireland Capital Funding III, LP, 6.11% (d)(e)(g)   9,153   4,027,320   ING Groep NV:        
Barclays Bank Plc, (d)(e)(g):               6.13%     200,000   3,130,000  
      5.93%     4,000   3,120,000         7.05%     5,800   99,470  
      6.86%     11,500   9,315,000         7.20%     213,000   3,730,192  
              7.38%     40,000   703,193  
              12,898,800  
See Notes to Financial Statements.              
22   ANNUAL REPORT                                                 OCTOBER 31, 2009        

Schedule of Investments (continued)       BlackRock Credit Allocation Income Trust IV (BTZ)  
            (Percentages shown are based on Net Assets)  
Preferred Stocks   Shares   Value   Short-Term Securities       Shares   Value  
Diversified Telecommunication Services — 0.1%       BlackRock Liquidity Funds, TempFund,        
AT&T, Inc., 6.38%   30,000   $ 778,580     Institutional Class, 0.18% (h)(i)     267,832,781 $   267,832,781  
Electric Utilities — 4.4%       Total Short-Term Securities          
Alabama Power Co., 6.50%   100,000   3,000,000   (Cost — $267,832,781) — 40.9%       267,832,781  
Entergy Louisiana LLC, 6.95%   40,000   3,743,482   Total Investments Before Outstanding Options Written      
Interstate Power & Light Co. Series B, 8.38%   785,000   21,783,750   (Cost — $905,234,626*) — 125.7%       823,053,616  
    28,527,232                
Insurance — 9.1%                    
Aegon NV, 6.50%   400,000   6,496,000                
Arch Capital Group Ltd.:       Options Written         Contracts    
      Series A, 8.00%   100,000   2,420,000   Exchange-Traded Call Options Written        
      Series B, 7.88%   160,000   3,788,800   S&P 500 Listed Option:          
Aspen Insurance Holdings Ltd., 7.40% (d)   655,000   13,296,500     expiring 11/21/09 at USD 1,090     234   (113,490)  
Axis Capital Holdings Ltd. Series B, 7.50% (d)   180,000   13,477,500     expiring 11/21/09 at USD 1,095     21   (7,770)  
Endurance Specialty Holdings Ltd. Series A, 7.75%   369,000   8,081,100     expiring 11/21/09 at USD 1,110     145   (44,950)  
PartnerRe Ltd. Series C, 6.75%   265,600   5,877,728                
RenaissanceRe Holding Ltd. Series D, 6.60%   285,000   5,873,850   Total Options Written            
      (Premiums Received — $828,039) — (0.0)%     (166,210)  
    59,311,478                
      Total Investments — 125.7%         822,887,406  
Real Estate Investment Trusts (REITs) — 0.4%       Other Assets Less Liabilities — 9.6%       63,155,825  
BRE Properties, Inc. Series D, 6.75%   30,000   615,600   Preferred Shares, at Redemption Value — (35.3)%     (231,044,104)  
iStar Financial, Inc. Series I, 7.50%   55,000   385,000                
Public Storage:       Net Assets Applicable to Common Shares — 100.0%   $ 654,999,127  
      Series F, 6.45%   30,000   637,500   * The cost and unrealized appreciation (depreciation) of investments as of October 31,  
      Series M, 6.63%   55,000   1,179,750     2009, as computed for federal income tax purposes, were as follows:  
    2,817,850     Aggregate cost         $ 918,380,664  
Wireless Telecommunication Services — 1.5%         Gross unrealized appreciation     $ 26,032,998  
Centaur Funding Corp., 9.08% (g)   10,000   10,034,375     Gross unrealized depreciation       (121,360,046)  
Total Preferred Stocks — 22.3%     145,860,009     Net unrealized depreciation     $ (95,327,048)  
      (a) Non-income producing security.        
  Shares     (b) All or a portion of the security has been pledged as collateral in connection with  
Trust Preferreds   (000)       open financial futures contracts.        
Capital Markets — 0.0%         (c) Issuer filed for bankruptcy and/or is in default of interest payments.    
Credit Suisse Guernsey Ltd., 7.90% (e)   10   244,950   (d) Variable rate security. Rate shown is as of report date.    
Commercial Banks — 3.4%         (e) Security is perpetual in nature and has no stated maturity date.    
Kazkommerts Finance 2 BV, 9.20% (d)(e)   500   315,000                
Mizuho Capital Investment 1 Ltd., 6.686% (d)(e)(g)   21,000   17,517,906     (f) All or a portion of the security has been pledged as collateral for open reverse  
National City Preferred Trust I, 12% (d)(e)   3,713   4,249,640     repurchase agreements.          
    22,082,546     (g) Security exempt from registration under Rule 144A of the Securities Act of 1933.  
        These securities may be resold in transactions exempt from registration to qualified  
Electric Utilities — 1.1%         institutional investors.          
PPL Energy Supply LLC, 7.00%, 7/15/46   288   7,366,797                
      (h) Investments in companies considered to be an affiliate of the Fund, for purposes of  
Insurance — 1.9%         Section 2(a)(3) of the Investment Company Act of 1940, were as follows:  
AON Corp., 8.21%, 1/01/27   4,000   3,960,000                
Ace Capital Trust II, 9.70%, 4/01/30 (f)   4,000   4,420,912                     Net    
W.R. Berkley Capital Trust II, 6.75%, 7/26/45   171   3,807,443     Affiliate         Activity   Income  
    12,188,355     BlackRock Liquidity Funds, TempFund,        
Media — 6.8%         Institutional Class       $267,832,781   $ 479,886  
Comcast Corp., 6.63%, 5/15/56   1,950   44,717,395                
        (i) Represents the current yield as of report date.      
Oil, Gas & Consumable Fuels — 0.4%         •   For Fund compliance purposes, the Fund’s industry classifications refer to any one  
Nexen, Inc., 7.35%, 11/01/43   120   2,805,001                
        or more of the industry sub-classifications used by one or more widely recognized  
Total Trust Preferreds — 13.6%     89,405,044     market indexes or ratings group indexes, and/or as defined by Fund management.  
Total Preferred Securities — 71.4%     467,571,499     This definition may not apply for purposes of this report, which may combine  
Total Long-Term Investments         industry sub-classifications for reporting ease.      
(Cost — $637,401,845) — 84.8%     555,220,835     •   Reverse repurchase agreements outstanding as of October 31, 2009 were as follows:  
          Interest   Trade   Maturity   Net Closing   Face  
        Counterparty   Rate   Date   Date   Amount   Amount  
        Barclays            
        Bank Plc   0.75%   10/16/09   11/16/09 $61,616,136   $61,576,368  
See Notes to Financial Statements.                    
                                                          ANNUAL REPORT             OCTOBER 31, 2009   23  

Schedule of Investments (concluded)   BlackRock Credit Allocation Income Trust IV (BTZ)  
•   Financial futures contracts purchased as of October 31, 2009 were as follows:       Other Financial  
                  Valuation Inputs     Instruments 1  
                  Unrealized          
      Expiration   Notional   Appreciation       Assets   Liabilities  
  Contracts   Issue   Date       Value   (Depreciation)   Level 1   $ 982,873   $ (311,644)  
        422   10-Year US               Level 2     —   (675,809)  
        Treasury Bond                 December 2009   $49,119,100   $ 934,090   Level 3     —   —  
  35   30-Year US               Total   $ 982,873   $ (987,453)  
    Treasury Bond   December 2009   $ 4,156,686     48,783          
        161   S&P EMINI   December 2009   $ 8,461,085     (145,434)   1 Other financial instruments are financial futures contracts, swaps and options.  
  Total             $ 837,439   Financial futures contracts and swaps are valued at the unrealized appreciation/  
                        depreciation on the instrument and options are shown at market value.  
•   Credit default swaps on single-name issue — buy protection oustanding as of          
  October 31, 2009 were as follows:             The following is a reconciliation of investments for unobservable inputs (Level 3)  
                  used in determining fair value:        
    Pay         Notional              
    Fixed   Counter-       Amount       Unrealized         Investments in  
  Issuer   Rate   party   Expiration (000)   Depreciation         Securities  
  Nordstrom, Inc. 5.20%   Deutsche   June                 Corporate Bonds  
      Bank AG   2014   $4,000       $ (675,809)          
                  Balance, as of October 31, 2008       $ 268,850  
•   Fair Value Measurements — Various inputs are used in determining the fair value of   Accrued discounts/premiums       —  
  investments, which are as follows:             Realized gain (loss)       —  
  • Level 1 — price quotations in active markets/exchanges for identical assets   Change in unrealized appreciation/depreciation 2     (28,300)  
      and liabiltiies               Net purchases (sales)       —  
                  Net transfers in/out of Level 3       —  
  • 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   Balance, as of October 31, 2009       $ 240,550  
      or similar assets or liabilities in markets that are not active, inputs other than          
                    2 Included in the related net change in unrealized appreciation/depreciation in  
      quoted prices that are observable for the assets or liabilities (such as interest          
  rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and         the Statements of Operations.        
      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)          
  The inputs or methodology used for valuing securities are not necessarily an indica-          
  tion of the risk associated with investing in those securities. For information about          
  the Fund’s policy regarding valuation of investments 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 October 31, 2009 in          
  determining the fair valuation of the Fund’s investments:              
              Investments in          
  Valuation Inputs               Securities          
                Assets          
  Level 1                        
    Long-Term Investments:                      
      Common Stocks           $53,634,533          
      Investment Companies             1,549,500          
      Preferred Stocks           113,368,707          
      Trust Preferreds           58,941,586          
    Short-Term Securities           267,832,781          
  Total Level 1             495,327,107          
  Level 2                        
  Corporate Bonds           32,224,753          
    Capital Trusts           232,306,446          
    Preferred Stocks           32,491,302          
    Trust Preferreds           30,463,458          
  Total Level 2             327,485,959          
  Level 3                        
    Corporate Bonds             240,550          
  Total           $ 823,053,616          
See Notes to Financial Statements.                    
24       ANNUAL REPORT                                             OCTOBER 31, 2009        

Schedule of Investments October 31, 2009   BlackRock Enhanced Capital and Income Fund, Inc. (CII)  
      (Percentages shown are based on Net Assets)  
Common Stocks   Shares   Value   Common Stocks   Shares   Value  
Aerospace & Defense — 5.2%       Machinery — 1.5%      
Honeywell International, Inc.   337,600   $ 12,116,464   Deere & Co.   207,286   $ 9,441,877  
Northrop Grumman Corp.   192,800   9,665,064   Media — 5.3%      
Raytheon Co.   226,000   10,233,280   Time Warner, Inc.   538,272   16,212,753  
    32,014,808   Viacom, Inc. Class B (a)   418,424   11,544,318  
Capital Markets — 5.9%       Walt Disney Co.   189,947   5,198,849  
The Bank of New York Mellon Corp.   483,198   12,882,059       32,955,920  
Invesco Ltd.   584,300   12,357,945   Metals & Mining — 1.4%      
Morgan Stanley   353,613   11,358,050   Nucor Corp.   218,800   8,719,180  
    36,598,054   Multi-Utilities — 1.4%      
Chemicals — 1.8%       Dominion Resources, Inc.   256,500   8,744,085  
E.I. du Pont de Nemours & Co.   353,100   11,235,642   Oil, Gas & Consumable Fuels — 8.1%      
Commercial Banks — 1.4%       Anadarko Petroleum Corp.   84,117   5,125,249  
Wells Fargo & Co.   316,600   8,712,832   Chevron Corp.   256,400   19,624,856  
Communications Equipment — 1.0%       Exxon Mobil Corp.   247,100   17,709,657  
Nokia Oyj — ADR   503,900   6,354,179   Peabody Energy Corp.   199,100   7,882,369  
Computers & Peripherals — 4.5%           50,342,131  
Hewlett-Packard Co.   286,092   13,577,926   Pharmaceuticals — 10.8%      
International Business Machines Corp.   117,353   14,153,945   Bristol-Myers Squibb Co.   859,200   18,730,560  
    27,731,871   Eli Lilly & Co.   263,500   8,961,635  
      Johnson & Johnson   143,454   8,470,959  
Diversified Financial Services — 3.4%       Pfizer, Inc.   681,599   11,607,622  
JPMorgan Chase & Co.   501,939   20,965,992   Schering-Plough Corp.   676,900   19,088,580  
Diversified Telecommunication Services — 6.3%           66,859,356  
AT&T Inc.   459,400   11,792,798        
Qwest Communications International Inc.   3,573,701   12,829,587   Semiconductors & Semiconductor      
Verizon Communications, Inc.   494,300   14,626,337   Equipment — 10.0%      
      Analog Devices, Inc.   500,100   12,817,563  
    39,248,722   Intel Corp.   501,078   9,575,601  
Electric Utilities — 2.5%       LSI Corp. (a)   3,895,920   19,947,110  
FPL Group, Inc.   152,044   7,465,360   Maxim Integrated Products, Inc.   655,500   10,927,185  
The Southern Co.   261,029   8,141,495   Micron Technology, Inc. (a)   1,233,100   8,372,749  
    15,606,855       61,640,208  
Electrical Equipment — 0.9%       Software — 1.0%      
Emerson Electric Co.   143,000   5,398,250   Microsoft Corp.   215,414   5,973,430  
Energy Equipment & Services — 2.1%       Specialty Retail — 1.0%      
Halliburton Co.   441,089   12,884,210   Home Depot, Inc.   242,200   6,076,798  
Food & Staples Retailing — 1.1%       Total Long-Term Investments      
Walgreen Co.   180,400   6,824,532   (Cost — $664,851,097) — 97.7%     604,104,432  
Food Products — 7.3%            
General Mills, Inc.   209,371   13,801,736        
Kraft Foods, Inc.   594,200   16,352,384        
Unilever NV — ADR   481,632   14,877,612   Short-Term Securities      
    45,031,732   Money Market Funds — 4.0%      
Health Care Equipment & Supplies — 1.3%       BlackRock Liquidity Funds, TempFund,      
Covidien Plc   193,800   8,162,856   Institutional Class, 0.18% (b)(c)   24,567,455   24,567,455  
Household Products — 3.4%         Par    
Clorox Co.   54,557   3,231,411     (000)    
Kimberly-Clark Corp.   287,700   17,595,732   Time Deposits — 0.0%      
    20,827,143   Brown Brothers Harriman & Co., 0.03%, 11/02/09   $ 217   217,283  
Industrial Conglomerates — 1.3%       Total Short-Term Securities      
Tyco International Ltd.   230,500   7,733,275   (Cost — $24,784,738) — 4.0%     24,784,738  
Insurance — 7.8%       Total Investments Before Outstanding Options Written      
ACE Ltd.   185,500   9,527,280   (Cost — $689,635,835*) — 101.7%     628,889,170  
MetLife, Inc.   257,825   8,773,785        
Prudential Financial, Inc.   118,300   5,350,709        
The Travelers Cos., Inc.   489,430   24,368,720        
    48,020,494        
See Notes to Financial Statements.            
                                                          ANNUAL REPORT                                                           OCTOBER 31, 2009     25  

Schedule of Investments (continued)     BlackRock Enhanced Capital and Income Fund, Inc. (CII)  
          (Percentages shown are based on Net Assets)  
Options Written   Contracts       Value   Options Written   Contracts             Value  
Exchange-Traded Call Options Written         Exchange-Traded Call Options Written (concluded)      
ACE Ltd.:         Raytheon Co.:      
  expiring 11/21/09 at USD 55   100   $ (2,000)         expiring 11/21/09 at USD 46   900   $ (72,000)  
  expiring 12/19/09 at USD 55   550     (39,875)         expiring 12/19/09 at USD 48   395   (25,675)  
AT&T Inc., expiring 1/16/10 at USD 27   250     (13,500)   Schering-Plough Corp.:      
Anadarko Petroleum Corp.:               expiring 12/19/09 at USD 29   2,300   (109,250)  
  expiring 11/21/09 at USD 60   425     (148,750)         expiring 12/19/09 at USD 30   1,425   (32,063)  
  expiring 12/19/09 at USD 70   40     (5,000)   Time Warner, Inc.:      
Analog Devices, Inc., expiring 12/19/09 at USD 30   100     (1,750)         expiring 12/19/09 at USD 32   2,700   (209,250)  
The Bank of New York Mellon Corp.:               expiring 1/16/10 at USD 33   250   (20,000)  
  expiring 12/19/09 at USD 30   1,500     (75,000)   The Travelers Cos., Inc.:      
  expiring 12/19/09 at USD 31   190     (5,700)         expiring 11/21/09 at USD 50   1,000   (137,500)  
Bristol-Myers Squibb Co.:               expiring 12/19/09 at USD 50   465   (95,325)  
  expiring 11/21/09 at USD 23   430     (5,375)         expiring 12/19/09 at USD 55   250   (11,250)  
  expiring 12/19/09 at USD 23   2,470     (75,335)   Tyco International Ltd., expiring 12/19/09 at USD 36   820   (45,100)  
Clorox Co., expiring 1/16/10 at USD 60   410     (79,950)   Unilever NV — ADR, expiring 12/19/09 at USD 30   1,700   (289,000)  
Covidien Plc, expiring 11/21/09 at USD 42.50   100     (12,750)   Verizon Communications, Inc.:      
Deere & Co., expiring 12/19/09 at USD 49   1,550     (251,875)         expiring 11/21/09 at USD 29   1,250   (126,250)  
Dominion Resources, Inc.,               expiring 12/19/09 at USD 30   1,250   (95,624)  
  expiring 11/21/09 at USD 35   630     (15,750)         expiring 12/19/09 at USD 31   250   (9,750)  
  expiring 1/16/10 at USD 35   400     (27,000)   Viacom, Inc. Class B:      
Eli Lilly & Co.:               expiring 11/21/09 at USD 30   1,060   (31,800)  
  expiring 11/21/09 at USD 35   130     (3,250)         expiring 12/19/09 at USD 30   1,035   (72,450)  
  expiring 12/19/09 at USD 35   800     (44,000)   Walgreen Co., expiring 12/19/09 at USD 41   630   (20,474)  
Emerson Electric Co.:         Walt Disney Co., expiring 12/19/09 at USD 31   400   (10,000)  
  expiring 11/21/09 at USD 41   210     (3,675)   Total Exchange-Traded Call Options Written     (4,359,940)  
  expiring 12/19/09 at USD 41   290     (13,050)   Over-the-Counter Call Options Written      
Exxon Mobil Corp., expiring 11/21/09 at USD 75   1,850     (70,300)   AT&T Inc.:      
FPL Group, Inc., expiring 11/21/09 at USD 55   470     (3,525)         expiring 12/15/09 at USD 26.60, Broker UBS AG   2,000   (73,008)  
General Mills, Inc.:               expiring 12/18/09 at USD 27, Broker Morgan      
  expiring 11/21/09 at USD 65   515     (90,125)         Stanley Capitial Services, Inc.   270   (6,589)  
  expiring 12/19/09 at USD 65   815     (207,825)   Analog Devices, Inc., expiring 11/30/09 at USD 28.39,      
Halliburton Co., expiring 11/21/09 at USD 32   2,400     (74,400)     Broker Citibank NA   1,650   (27,042)  
Hewlett-Packard Co.:         Bristol-Myers Squibb Co., expiring 11/13/09      
  expiring 12/19/09 at USD 48   790     (144,175)     at USD 23.20, Broker Credit Suisse International   1,825   (6,209)  
  expiring 12/19/09 at USD 50   285     (28,500)   Chevron Corp.:      
  expiring 1/16/10 at USD 50   600     (85,500)         expiring 11/30/09 at USD 79.18, Broker UBS AG   1,170   (134,217)  
Home Depot, Inc., expiring 12/19/09 at USD 28   1,815     (43,560)         expiring 12/23/09 at USD 79.45, Broker UBS AG   750   (125,320)  
Honeywell International, Inc.,         Covidien Plc, expiring 11/13/09 at USD 42.39,      
  expiring 12/19/09 at USD 39   1,000     (45,000)     Broker Credit Suisse International   580   (41,089)  
  expiring 12/19/09 at USD 40   160     (4,800)   Dominion Resources, Inc., expiring 12/11/09      
Intel Corp., expiring 12/19/09 at USD 21   2,750     (63,250)     at USD 35.48, Broker UBS AG   900   (22,723)  
International Business Machines Corp.,         E.I. du Pont de Nemours & Co., expiring 12/23/09      
  expiring 12/19/09 at USD 125   645     (153,188)     at USD 34.87, Broker UBS AG   2,655   (148,622)  
Invesco Ltd., expiring 12/19/09 at USD 25   280     (7,700)   FPL Group, Inc., expiring 11/17/09 at USD 55.96,      
JPMorgan Chase & Co., expiring 12/19/09 at USD 48   2,000     (125,000)     Broker Credit Suisse International   450   (438)  
Kimberly-Clark Corp.:         General Mills, Inc., expiring 11/20/09 at USD 65.50,      
  expiring 11/21/09 at USD 60   710     (136,675)     Broker UBS AG   240   (30,762)  
  expiring 11/24/09 at USD 59   730     (182,418)   Honeywell International, Inc., expiring 11/20/09      
  expiring 1/16/10 at USD 65   100     (6,000)     at USD 38.50, Broker Credit Suisse International   640   (10,045)  
Kraft Foods, Inc., expiring 12/19/09 at USD 28   1,485     (111,375)   Invesco Ltd., expiring 1/06/10 at USD 22.68,      
Maxim Integrated Products, Inc., expiring 11/21/09           Broker Morgan Stanley Capital Services, Inc.   1,470   (132,869)  
  at USD 20   300     (3,000)   Johnson & Johnson:      
MetLife, Inc., expiring 11/21/09 at USD 39   900     (24,750)         expiring 12/15/09 at USD 60.96, Broker Morgan      
Microsoft Corp., expiring 12/19/09 at USD 27   535     (78,378)         Stanley Capital Services, Inc.   245   (11,574)  
Micron Technology, Inc., expiring 12/19/09 at USD 9   3,700     (27,750)         expiring 12/23/09 at USD 61.98, Broker Credit      
Morgan Stanley, expiring 12/19/09 at USD 35   1,240     (127,100)         Suisse International   585   (25,053)  
Nokia Oyj — ADR:               expiring 1/04/10 at USD 62, Broker Bank of America   245   (15,384)  
  expiring 11/21/09 at USD 14   750     (5,625)   Kraft Foods, Inc., expiring 12/07/09 at USD 26.85,      
  expiring 12/19/09 at USD 14   1,000     (27,500)     Broker Goldman Sachs Bank USA   1,770   (193,797)  
Nucor Corp., expiring 11/21/09 at USD 48   650     (6,500)        
Peabody Energy Corp., expiring 11/21/09 at USD 42   700     (70,000)        
Pfizer, Inc., expiring 12/19/09 at USD 18   5,110     (153,300)        
Prudential Financial, Inc.:              
  expiring 11/21/09 at USD 55   355     (8,875)        
  expiring 12/19/09 at USD 55   100     (7,500)        
See Notes to Financial Statements.              
26                                                     ANNUAL REPORT                                                   OCTOBER 31, 2009      

Schedule of Investments (concluded)       BlackRock Enhanced Capital and Income Fund, Inc. (CII)  
          (Percentages shown are based on Net Assets)  
Options Written   Contracts   Value            
Over-the-Counter Call Options Written (concluded)       •   Fair Value Measurements — Various inputs are used in determining the fair value of  
LSI Corp.:         investments, which are as follows:      
      expiring 11/13/09 at USD 5.63, Broker Morgan         • Level 1 — price quotations in active markets/exchanges for identical assets  
      Stanley Capital Services, Inc.   2,000   $ (7,826)            
          and liabilities      
      expiring 12/23/09 at USD 5.93, Broker Morgan                
      Stanley Capital Services, Inc.   9,600   (94,118)     • Level 2 — other observable inputs (including, but not limited to: quoted prices  
      expiring 1/08/10 at USD 5.56, Broker Morgan           for similar assets or liabilities in markets that are active, quoted prices for identi-  
      Stanley Capital Services, Inc.   2,000   (49,728)       cal or similar assets or liabilities in markets that are not active, inputs other than  
Maxim Integrated Products, Inc.:           quoted prices that are observable for the assets or liabilities (such as interest  
      expiring 12/23/09 at USD 19.06, Broker Morgan           rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks  
      Stanley Capital Services, Inc.   1,292   (16,127)       and default rates) or other market-corroborated inputs)      
      expiring 1/08/10 at USD 19.25, Broker Morgan         • Level 3 — unobservable inputs based on the best information available in the  
      Stanley Capital Services, Inc.   2,000   (41,582)       circumstances, to the extent observable inputs are not available (including the  
Microsoft Corp., expiring 11/06/09 at USD 25,           Fund’s own assumptions used in determining the fair value of investments)  
  Broker Deutshe Bank AG   1,080   (294,840)            
        The inputs or methodology used for valuing securities are not necessarily an indica-  
Northrop Grumman Corp., expiring 12/23/09                
        tion of the risk associated with investing in those securities. For information about  
  at USD 51.94, Broker Citibank NA   1,445   (166,533)            
        the Fund’s policy regarding valuation of investments and other significant accounting  
Qwest Communications International Inc.,                
        policies, please refer to Note 1 of the Notes to Financial Statements.    
  expiring 1/06/10 at USD 3.66, Broker Credit                
  Suisse International   12,500   (217,713)     The following tables summarize the inputs used as of October 31, 2009 in deter-  
The Southern Co., expiring 12/23/09 at USD 32.76,         mining the fair valuation of the Fund’s investments:      
  Broker Citibank NA   1,950   (56,560)            
Walt Disney Co., expiring 11/09/09 at USD 28.50,             Investments in  
  Broker Morgan Stanley Capital Services, Inc.   640   (14,400)     Valuation Inputs     Securities  
Wells Fargo & Co.,               Assets  
      expiring 11/20/09 at USD 30.75, Broker Deutsche       Level 1      
      Bank AG   1,390   (31,570)       Long-Term Investments 1   $604,104,432  
      expiring 12/23/09 at USD 31.50, Broker Credit           Short-Term Securities     24,567,455  
      Suisse International   350   (21,468)            
        Total Level 1     628,671,887  
Total Over-the-Counter Call Options Written     (2,017,206)            
        Level 2 — Short-Term Securities     217,283  
Total Options Written                
(Premiums Received — $9,193,459) — (1.0)%     (6,377,146)     Level 3     —  
Total Investments, Net of Outstanding Options Written — 100.7%   622,512,024     Total   $628,889,170  
Liabilities in Excess of Other Assets — (0.7)%     (4,050,310)       1     See above Schedule of Investments for values in each industry.    
Net Assets — 100.0%     $618,461,714            
            Other Financial  
* The cost and unrealized appreciation (depreciation) of investments as of October 31,     Valuation Inputs   Instruments 2  
        2009, as computed for federal income tax purposes, were as follows:           Liabilities  
        Aggregate cost     $ 715,152,338     Level 1   $ (4,359,940)  
        Gross unrealized appreciation     $ 6,130,287     Level 2     (2,017,206)  
        Gross unrealized depreciation     (92,393,455)     Level 3     —  
        Net unrealized depreciation     $ (86,263,168)     Total   $ (6,377,146)  
(a) Non-income producing security.           2     Other financial instruments are options, which are shown at market value.  
(b) Investments in companies considered to be an affiliate of the Fund, for purposes of            
        Section 2(a)(3) of the Investment Company Act of 1940, were as follows:            
  Net              
        Affiliate   Activity   Income            
        BlackRock Liquidity Funds, TempFund,                
Institutional Class   $24,567,455   $ 25,743            
        BlackRock Liquidity Series, LLC                
Cash Sweep Series   $(2,450,990)   $117,920            
  (c) 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 ratings group indexes, and/or as defined by Fund management.            
        This definition may not apply for purposes of this report, which may combine industry            
        sub-classifications for reporting ease.                
See Notes to Financial Statements.                
ANNUAL REPORT           OCTOBER 31, 2009     27  

Schedule of Investments October 31, 2009     BlackRock Floating Rate Income Trust (BGT)  
            (Percentages shown are based on Net Assets)  
                Par    
Common Stocks       Shares     Value   Corporate Bonds     (000)             Value  
Chemicals — 0.0%             Energy Equipment & Services — 0.0%        
British Vita Holding Co. (a)(b)       166   $ 977   Compagnie Generale de Geophysique-Veritas:        
Commercial Services & Supplies — 0.0%                 7.50%, 5/15/15   USD   70   $ 69,475  
Sirva (b)       554     5,540         7.75%, 5/15/17     50   49,500  
Construction & Engineering — 0.0%                 118,975  
USI United Subcontractors (b)       7,639     99,305   Food & Staples Retailing — 0.1%        
Metals & Mining — 0.0%             Duane Reade, Inc., 11.75%, 8/01/15 (a)     240   255,600  
Euramax International (b)       1,135     12,203   Food Products — 0.2%        
Paper & Forest Products — 0.1%           Smithfield Foods, Inc., 10.00%, 7/15/14 (a)     700   735,000  
Ainsworth Lumber Co. Ltd. (b)       55,855     90,850   Health Care Equipment & Supplies — 0.2%        
Ainsworth Lumber Co. Ltd. (a)(b)     62,685     102,419   DJO Finance LLC, 10.88%, 11/15/14     635   661,987  
          193,269   Health Care Providers & Services — 0.4%        
Total Common Stocks — 0.1%         311,294   DaVita, Inc., 6.63%, 3/15/13     1,070   1,053,950  
            Tenet Healthcare Corp. (a):        
                  9.00%, 5/01/15     95   100,462  
                  10.00%, 5/01/18     35   38,587  
      Par              
Corporate Bonds       (000)             1,192,999  
Air Freight & Logistics — 0.0%           Hotels, Restaurants & Leisure — 0.1%        
Park-Ohio Industries, Inc., 8.38%, 11/15/14   USD   125     98,125   American Real Estate Partners LP, 7.13%, 2/15/13     140   137,550  
            Greektown Holdings, LLC, 10.75%, 12/01/13 (a)(b)(d)     122   24,400  
Auto Components — 0.0%                    
Delphi International Holdings Unsecured,                 161,950  
12.00%, 10/06/14       39     37,992   Household Durables — 0.5%        
The Goodyear Tire & Rubber Co., 5.01%, 12/01/09 (c)     60     60,000   Beazer Homes USA, Inc., 12.00%, 10/15/17 (a)     1,500   1,575,000  
Lear Corp., 8.75%, 12/01/16 (b)(d)     30     20,400   Berkline/BenchCraft, LLC, 4.50%, 11/03/12 (b)(d)(e)     400   —  
          118,392         1,575,000  
Building Products — 0.0%             IT Services — 0.2%        
CPG International I, Inc., 10.50%, 7/01/13     90     76,500   SunGard Data Systems, Inc., 4.88%, 1/15/14     763   686,700  
Capital Markets — 0.6%             Independent Power Producers & Energy Traders — 1.6%      
E*Trade Financial Corp. (a):             AES Ironwood LLC, 8.86%, 11/30/25     82   78,071  
12.50%, 11/30/17 (e)       138     153,180   Calpine Construction Finance Co. LP,        
3.34%, 8/31/19 (f)(g)       439     629,416   8.00%, 6/01/16 (a)     2,580   2,618,700  
Marsico Parent Co., LLC, 10.63%, 1/15/16 (a)     1,501     915,610   NRG Energy, Inc., 7.25%, 2/01/14     2,200   2,183,500  
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (a)(e)     645     145,226         4,880,271  
Marsico Parent Superholdco, LLC,                  
14.50%, 1/15/18 (a)(e)       445     100,213   Machinery — 0.1%        
            Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (a)     210   161,700  
        1,943,645   Synventive Molding Solutions Sub-Series A,        
Chemicals — 0.3%             14.00%, 1/14/11 (e)     986   246,504  
American Pacific Corp., 9.00%, 2/01/15     125     116,250         408,204  
Ames True Temper, Inc., 4.28%, 1/15/12 (c)     1,100     968,000          
            Media — 1.0%        
        1,084,250   Affinion Group, Inc., 10.13%, 10/15/13     50   51,250  
Commercial Banks — 4.1%             CSC Holdings, Inc., 8.50%, 4/15/14 (a)     550   580,937  
SNS Bank NV Series EMTN, 2.88%, 1/30/12   EUR   8,500   12,711,922   Charter Communications Holdings II, LLC (b)(d):        
Commercial Services & Supplies — 0.3%                 10.25%, 9/15/10     260   314,600  
DI Finance Series B, 9.50%, 2/15/13   USD   307     313,140         Series B, 10.25%, 9/15/10     45   54,225  
The Geo Group, Inc., 7.75%, 10/15/17 (a)     675     685,125   Charter Communications Operating, LLC,        
              10.00%, 4/30/12 (a)(b)(d)     210   213,150  
          998,265   EchoStar DBS Corp.:        
Containers & Packaging — 0.1%                 7.00%, 10/01/13     158   158,000  
Berry Plastics Corp., 4.17%, 9/15/14 (c)     300     236,250         7.13%, 2/01/16     230   230,000  
Impress Holdings BV, 3.41%, 9/15/13 (a)(c)     150     142,687   Local Insight Regatta Holdings, Inc., 11.00%, 12/01/17     770   377,300  
          378,937   Nielsen Finance LLC, 10.00%, 8/01/14     400   412,000  
            Rainbow National Services LLC, 8.75%, 9/01/12 (a)     750   761,250  
Diversified Financial Services — 0.1%                  
FCE Bank Plc, 7.13%, 1/16/12   EUR   200     282,556         3,152,712  
Diversified Telecommunication Services — 1.8%           Metals & Mining — 0.2%        
PAETEC Holding Corp., 8.88%, 6/30/17 (a)   USD   700     693,000   Foundation PA Coal Co., 7.25%, 8/01/14     505   506,894  
Qwest Corp., 8.38%, 5/01/16 (a)     1,840   1,899,800   Oil, Gas & Consumable Fuels — 5.4%        
Telefonica Emisiones SAU, 5.43%, 2/03/14   EUR   2,000   3,164,192   Gazprom OAO, 9.63%, 3/01/13     11,530   12,770,628  
        5,756,992   Repsol International Finance BV, 6.50%, 3/27/14   EUR   1,500   2,444,048  
            SandRidge Energy, Inc., 3.91%, 4/01/14 (c)   USD   1,400   1,239,308  
            Whiting Petroleum Corp., 7.25%, 5/01/13     300   300,375  
                  16,754,359  
See Notes to Financial Statements.                  
28   ANNUAL REPORT                                                     OCTOBER 31, 2009        

Schedule of Investments (continued)   BlackRock Floating Rate Income Trust (BGT)  
        (Percentages shown are based on Net Assets)  
    Par         Par    
Corporate Bonds     (000)   Value   Floating Rate Loan Interests (c)     (000)   Value  
Paper & Forest Products — 2.4%         Beverages (concluded)        
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (a)(e)   USD   482 $   275,858   Le-Nature’s, Inc., Tranche B Term Loan,        
NewPage Corp.:           9.50%, 3/01/11 (b)(d)   USD   1,000 $   390,000  
      6.53%, 5/01/12 (c)     1,500   960,000   Orangina SA:        
      11.38%, 12/31/14 (a)     5,470   5,456,325         Term Loan B2, 2.61%, 12/31/13   EUR   559   801,916  
Verso Paper Holdings LLC Series B, 4.03%, 8/01/14 (c)     1,215   795,825         Term Loan C2, 3.61%, 12/31/14     534   765,047  
      7,488,008         4,443,353  
Pharmaceuticals — 0.5%         Building Products — 1.9%        
Angiotech Pharmaceuticals, Inc., 4.11%, 12/01/13 (c)     1,750   1,452,500   Building Materials Corp. of America, Term Loan        
Real Estate Investment Trusts (REITs) — 1.4%           Advance, 3.00%, 2/22/14   USD   2,679   2,460,208  
Rouse Co. LP, 5.38%, 11/26/13 (b)(d)     4,835   4,254,800   Custom Building Products, Inc., Loan (Second Lien),        
          10.75%, 4/20/12     1,500   1,421,250  
Specialty Retail — 0.1%         Goodman Global Holdings Term Loan B,        
General Nutrition Centers, Inc., 5.18%, 3/15/14 (c)(e)     500   446,250     6.25%, 2/13/14     900   900,675  
Lazy Days’ R.V. Center, Inc., 11.75%, 5/15/12 (b)(d)     375   3,750   Momentive Performance Materials (Blitz 06-103        
      450,000     GMBH), Tranche B-1 Term Loan, 2.50%, 12/04/13     1,218   1,007,952  
Textiles, Apparel & Luxury Goods — 0.6%         United Subcontractors, Inc., First Lien Term Loan,        
Levi Strauss & Co., 8.63%, 4/01/13   EUR   1,300   1,894,012     1.79%, 6/30/15     179   152,293  
Tobacco — 1.4%               5,942,378  
Imperial Tobacco Finance Plc, 4.38%, 11/22/13     1,500   2,238,020   Capital Markets — 0.4%        
Reynolds American, Inc., 7.63%, 6/01/16   USD   2,000   2,154,312   Marsico Parent Co., LLC, Term Loan,        
      4,392,332     5.00% – 5.06%, 12/15/14     458   309,239  
        Nuveen Investments, Inc., First Lien Term Loan,        
Wireless Telecommunication Services — 1.3%           3.28%, 11/13/14     1,174   1,009,334  
Cricket Communications, Inc., 7.75%, 5/15/16 (a)     3,000   2,992,500          
iPCS, Inc., 2.41%, 5/01/13 (c)     1,155   1,010,625         1,318,573  
      4,003,125   Chemicals — 8.0%        
        Ashland Inc., Term B Borrowing, 7.65%, 5/13/14     1,071   1,085,440  
Total Corporate Bonds — 25.0%       78,475,012   Brenntag AG, Second Lien Term Loan,        
          4.25%, 7/17/15     1,000   937,500  
        Brenntag Holding GmbH & Co. KG:        
              Acquisition Facility 1, 2.25% – 2.99%, 1/20/14     384   363,650  
Floating Rate Loan Interests (c)               Acquisition Facility 2, 3.21%, 1/20/14   EUR   443   616,722  
Aerospace & Defense — 1.1%               Facility B2, 2.25%, 1/20/14   USD   1,572   1,489,371  
Avio SpA, Dollar Mezzanine Term Loan,               Facility B6A and B6B, 3.02%, 1/20/14   EUR   489   689,643  
  4.24%, 12/13/16     1,062   806,784   Cognis GmbH:        
Hawker Beechcraft Acquisition Co. LLC:               Facility A, 2.77%, 11/17/13     803   1,068,996  
      Credit Linked Deposit, 0.18%, 3/26/14     163   127,717         Facility B (French), 2.77%, 11/16/13     197   261,795  
      Term Loan, 2.24% – 2.28%, 3/26/14     2,750   2,158,412   ElectricInvest Holding Co. Ltd. (Viridian Group Plc),        
IAP Worldwide Services, Inc., Term Loan (First-Lien),           Junior Term Facility:        
  9.25%, 12/30/12 (e)     232   193,722         4.93%, 12/20/12     1,787   2,025,325  
              5.01%, 12/21/12   GBP   1,800   2,274,779  
      3,286,635   Huish Detergents Inc.:        
Airlines — 0.3%               Loan (Second Lien), 4.50%, 10/26/14   USD   750   710,625  
US Airways Group, Inc., Loan, 2.78%, 3/21/14     1,460   965,425         Tranche B Term Loan, 2.00%, 4/26/14     1,725   1,650,055  
Auto Components — 2.7%         Ineos US Finance LLC, Term A4 Facility,        
Allison Transmission, Inc., Term Loan,           7.00%, 12/14/12     1,236   1,091,535  
  3.00% – 3.04%, 8/07/14     5,778   5,166,397   Matrix Acquisition Corp. (MacDermid, Inc.), Tranche C        
Dana Holding Corp., Term Advance, 7.25%, 1/31/15     2,874   2,532,390     Term Loan, 2.64%, 12/15/13   EUR   1,616   1,839,021  
Dayco Products LLC — (Mark IV Industries, Inc.):         Nalco Co., Term Loan, 6.50%, 5/13/16   USD   1,891   1,918,858  
      Replacement Term B Loan, 8.75%, 6/21/11 (b)(d)     853   382,583   PQ Corp. (fka Niagara Acquisition, Inc.):        
      US Lien Term Loan, 8.50%, 5/01/10     101   100,806         Loan (Second Lien), 6.75%, 7/30/15     2,250   1,839,375  
      US Term Loan, 8.50%, 6/01/11     20   10,081         Term Loan (First Lien), 3.50% – 3.54%, 7/30/14     2,716   2,411,475  
GPX International Tire Corp. (b)(d):         Rockwood Specialties Group, Inc., Tranche H Term Loan,        
      Amendment Fee, 12.00%, 4/11/12     12   3,454     6.00%, 5/15/14     1,229   1,241,848  
      Tranche B Term Loan, 10.25%, 3/30/12     640   192,052   Solutia Inc., Loan, 7.25%, 2/28/14     1,472   1,492,343  
      8,387,763         25,008,356  
Automobiles — 0.5%         Commercial Services & Supplies — 3.1%        
Ford Motor Co., Term Loan, 3.25% – 3.29%, 12/15/13     1,690   1,502,202   Aramark Corp.:        
              Facility Letter of Credit, 0.29%, 1/26/14     155   141,829  
Beverages — 1.4%               U.S. Term Loan, 2.12% – 2.16%, 1/26/14     2,359   2,161,562  
Culligan International Co., Loan (Second Lien),         Casella Waste Systems, Inc., Term B Loan,        
  5.19%, 4/24/13   EUR   1,000   533,473     7.00%, 4/08/14     1,097   1,102,736  
Inbev NV Bridge Loan, 1.43%, 7/15/11   USD   1,000   986,250          
Inbev NV/SA, Bridge Loan, 1.72%, 7/15/13     1,000   966,667          
See Notes to Financial Statements.                
                                                          ANNUAL REPORT                                                             OCTOBER 31, 2009       29  

Schedule of Investments (continued)     BlackRock Floating Rate Income Trust (BGT)  
          (Percentages shown are based on Net Assets)  
      Par         Par    
Floating Rate Loan Interests (c)     (000)   Value   Floating Rate Loan Interests (c)     (000)       Value  
Commercial Services & Supplies (concluded)         Diversified Telecommunication Services — 3.8%        
EnviroSolutions Real Property Holdings, Inc., Initial         BCM Ireland Holdings Ltd. (Eircom):        
    Term Loan, 11.00%, 7/07/12 (e)   USD   2,030 $   1,502,171         Facility B, 2.30%, 8/14/14   EUR   500 $   641,441  
John Maneely Co., Term Loan,               Facility C, 2.55%, 8/14/15     500   641,441  
    3.50% – 3.53%, 12/09/13     1,380   1,259,076   Cavtel Holdings, LLC, Term Loan, 10.50%, 12/31/12   USD   1,162   865,414  
SIRVA Worldwide, Inc., Loan (Second Lien),         Hawaiian Telcom Communications, Inc., Tranche C        
    12.00%, 5/12/15     133   13,339     Term Loan, 4.75%, 5/30/14     1,223   868,143  
Synagro Technologies, Inc., Term Loan (First Lien),         Integra Telecom Holdings, Inc., Term Loan (First Lien),        
    2.24%, 4/02/14     1,971   1,584,205     10.50%, 8/31/13     1,870   1,829,318  
West Corp. Incremental Term Loan B-3,         Nordic Telephone Co. Holdings APS:        
    7.25%, 11/08/13     1,995   1,998,661         Facility B2 Swiss, 1.93%, 11/29/13   EUR   885   1,238,990  
        9,763,579         Facility C2 Swiss, 2.56%, 11/29/14     1,058   1,480,351  
          PAETEC Holding Corp.:        
Computers & Peripherals — 0.3%               Incremental Term Loan, 2.74%, 2/28/13   USD   132   124,349  
Intergraph Corp.:               Replacement Term Loan, 2.74%, 2/28/13     310   292,941  
  Initial Term Loan (First Lien), 2.37%, 5/29/14     350   333,795   Wind Telecomunicazioni SpA:        
  Second-Lien Term Loan, 6.24% – 6.37%, 11/28/14     750   718,125         A1 Term Loan Facility, 2.90% – 2.93%, 9/22/12   EUR   848   1,180,221  
        1,051,920         B1 Term Loan Facility, 3.69%, 9/22/13     1,000   1,404,009  
Construction & Engineering — 0.7%               C1 Term Loan Facility, 4.68%, 9/22/14     1,000   1,404,009  
Airport Development and Investment Ltd. (BAA) Facility               11,970,627  
  (Second Lien), 4.56%, 4/07/11   GBP   566   843,498   Electric Utilities — 0.3%        
Brand Energy & Infrastructure Services, Inc. (FR Brand         Astoria Generating Co. Acquisitions, LLC, Term B Facility,        
  Acquisition Corp.):           2.04% – 2.05%, 2/23/13   USD   378   362,655  
  Loan (Second Lien), 6.31% – 6.44%, 2/07/15   USD   1,000   791,250   TPF Generation Holdings, LLC:        
  Synthetic Letter of Credit Term Loan (First Lien),               Synthetic Letter of Credit Deposit (First Lien),        
  0.31%, 2/07/14     500   449,375         0.18%, 12/15/13     151   143,016  
        2,084,123         Synthetic Revolving Deposit, 0.19%, 12/15/11     47   44,832  
Containers & Packaging — 1.9%               Term Loan (First Lien), 2.24%, 12/15/13     409   388,847  
Atlantis Plastic Films, Inc., Term Loan (Second Lien),               939,350  
  12.25%, 3/22/12 (b)(d)     500   —   Electrical Equipment — 0.4%        
Graham Packaging Co., L.P.:         Electrical Components International Holdings Co. (ECI),        
  B Term Loan, 2.50% – 2.56%, 10/07/11     232   225,705     Term Loan (Second Lien), 11.50%, 5/01/14     500   25,000  
  C Term Loan, 6.75%, 4/05/14     828   826,876   Generac Acquisition Corp., Term Loan (First Lien),        
OI European Group BV, Tranche D Term Loan,           2.78%, 11/10/13     1,464   1,315,114  
  1.93%, 6/14/13   EUR   1,915   2,672,599          
Smurfit Kappa Acquisitions (JSG):               1,340,114  
  C1 Term Loan Facility, 4.05% – 4.46%, 12/01/14     724   1,017,226   Electronic Equipment, Instruments        
  Term B1, 3.80% – 4.73%, 12/02/13     724   1,017,446   & Components — 1.2%        
Smurfit-Stone Container Canada, Inc.:         Flextronics International Ltd.:        
  Tranche C, 2.50%, 11/01/11   USD   26   25,153         A Closing Date Loan, 2.49% – 2.54%, 10/01/14     2,666   2,459,646  
  Tranche C-1 Term Loan, 2.50%, 11/01/11     8   7,605         Delay Draw Term Loan, 2.53%, 10/01/14     766   706,795  
Smurfit-Stone Container Enterprises, Inc.:         Matinvest 2 SAS (Deutsche Connector), Second Lien,        
  Deposit Funded Facility, 4.50%, 11/01/10     12   11,754     4.97%, 12/22/15     500   235,000  
  Tranche B, 2.50%, 11/01/11     14   13,376   Safenet, Inc., Loan (Second Lien), 6.25%, 4/12/15     500   426,250  
  U.S. Term Loan Debtor in Possession,         Tinnerman Palnut Engineered Products, LLC, Loan        
  10.00%, 1/28/10     145   145,108     (Second Lien), 13.00%, 11/01/11 (b)(d)     2,407   24,068  
Smurfit-Stone Container, Revolving Credit:               3,851,759  
  2.75% – 4.50%, 11/01/09     60   58,913          
  2.75% – 5.00%, 11/01/09     20   19,540   Energy Equipment & Services — 0.9%        
          Dresser, Inc., Term Loan (Second Lien), 6.00%, 5/04/15   1,500   1,348,125  
        6,041,301   MEG Energy Corp., Initial Term Loan, 2.29%, 4/03/13     483   454,756  
Distributors — 0.2%         Trinidad USA Partnership LLLP, Term Facility,        
Keystone Automotive Operations, Inc., Loan,           2.74%, 5/01/11     1,019   876,748  
    3.75% – 5.75%, 1/12/12     1,026   608,109         2,679,629  
Diversified Consumer Services — 2.5%         Food & Staples Retailing — 2.8%        
Coinmach Laundry Corp, Delay Draw Term Loan,         AB Acquisitions UK Topco 2 Ltd. (fka Alliance Boots),        
    3.25% – 3.43%, 11/14/14     497   424,528     Facility B1, 3.52%, 7/09/15   GBP   2,500   3,596,399  
Coinmach Service Corp., Term Loan B, 3.43%, 11/14/14   2,539   2,094,394   Birds Eye Iglo Group Ltd. (Liberator Midco Ltd.),        
Education Management Corp, Term Loan C,           Mezzanine Credit Facility, 8.51%, 11/03/16     411   626,759  
    2.06%, 6/01/13     1,197   1,118,950   DSW Holdings, Inc., Term Loan,        
Laureate Education New Incremental Term Loan,           4.29%, 3/02/12   USD   1,000   861,667  
7.00%, 12/31/14     4,250   4,234,063   McJunkin Corp., Term Loan, 3.49%, 1/31/14     497   481,060  
        7,871,935   Pierre Foods Term Loan B, 8.50%, 9/23/14     817   821,085  
Diversified Financial Services — 0.1%         Rite Aid Corp., Tranche 4 Term Loan, 9.50%, 6/10/15     1,000   1,030,417  
Professional Service Industries, Inc., Term Loan                
    (First Lien), 3.00%, 10/31/12     620   310,223          
See Notes to Financial Statements.                
30                                                     ANNUAL REPORT                                                   OCTOBER 31, 2009        

Schedule of Investments (continued)   BlackRock Floating Rate Income Trust (BGT)  
        (Percentages shown are based on Net Assets)  
    Par         Par    
Floating Rate Loan Interests (c)     (000)       Value   Floating Rate Loan Interests (c)     (000)   Value  
Food & Staples Retailing (concluded)         Hotels, Restaurants & Leisure (concluded)        
Roundy’s Supermarkets, Inc., Tranche B Term Loan,         Penn National Gaming, Inc., Term Loan B,        
  3.01% – 3.04%, 11/03/11   USD   501 $   492,229     1.99% – 2.21%, 10/03/12   USD   2,497 $   2,404,745  
WM. Bolthouse Farms, Inc., Term Loan (First Lien),         QCE, LLC (Quiznos), Term Loan (First Lien),        
  2.56%, 12/16/12     843   819,272     2.56%, 5/05/13     997   797,107  
      8,728,888         7,841,788  
Food Products — 1.6%         Household Durables — 1.7%        
Dole Food Co., Inc.:         American Residential Services LLC, Term Loan        
      Credit-Linked Deposit, 0.28%, 4/12/13     192   193,556     (Second Lien), 10.00%, 4/17/15     2,051   1,927,183  
      Tranche B Term Loan, 8.00%, 4/12/13     335   338,055   Berkline/Benchcraft, LLC., Term Loan,        
FSB Holdings, Inc. (Fresh Start Bakeries), Term Loan           6.58%, 11/03/11 (b)(d)     107   5,373  
  (Second Lien), 6.00%, 3/29/14     500   415,000   Jarden Corp., Term Loan B3, 2.78%, 1/24/12     952   930,272  
Solvest, Ltd. (Dole), Tranche C Term Loan,         Simmons Bedding Co., Tranche D Term Loan,        
  8.00%, 4/12/13     1,205   1,214,151     10.50%, 12/19/11     1,500   1,477,500  
Wm. Wrigley Jr. Co., Tranche B Term Loan,         Yankee Candle Co., Inc., Term Loan, 2.25%, 2/06/14     1,047   974,582  
  6.50%, 9/30/14     2,924   2,956,946         5,314,910  
      5,117,708   Household Products — 0.2%        
Health Care Equipment & Supplies — 1.8%         VI-JON, Inc. (VJCS Acquisition, Inc.), Tranche B        
Bausch & Lomb Incorporated:           Term Loan, 2.25%, 4/24/14     674   630,379  
      Delayed Draw Term Loan, 3.50% – 3.53%, 4/24/15     93   88,814   IT Services — 4.1%        
      Parent Term Loan, 3.53%, 4/24/15     384   365,729   Amadeus IT Group SA/Amadeus Verwaltungs GmbH:        
Biomet, Inc., Euro Term Loan,               Term B3 Facility, 2.44%, 6/30/13   EUR   615   833,122  
  3.39% – 3.71%, 3/25/15   EUR   2,521   3,523,547         Term B4 Facility, 2.44%, 6/30/13     489   663,217  
DJO Finance LLC (ReAble Therapeutics Fin LLC),               Term C3 Facility, 2.94%, 6/30/14     615   833,122  
  Term Loan, 3.24% – 3.28%, 5/20/14   USD   1,485   1,426,110         Term C4 Facility, 2.94%, 6/30/14     489   663,217  
Hologic, Inc., Tranche B Term Loan, 3.50%, 3/31/13     270   263,940   Audio Visual Services Group, Inc., Loan (Second Lien),        
      5,668,140     6.79%, 2/28/14   USD   1,059   105,867  
Health Care Providers & Services — 4.1%         Ceridian Corp, US Term Loan,        
CCS Medical, Inc. (Chronic Care):           3.24% – 3.28%, 11/09/14     1,977   1,753,567  
      Loan Debtor in Possession, 11.00%, 11/16/09     31   30,309   First Data Corp.:        
      Term Loan (First Lien), 4.35%, 9/30/12 (b)(d)     675   328,500         Initial Tranche B-1 Term Loan,        
CCS Medical Return of Capital, 0.00%, 9/30/11 (b)(d)     475   231,167         2.99% – 3.04%, 9/24/14     2,454   2,106,768  
CHS/Community Health Systems, Inc.:               Initial Tranche B-2 Term Loan,        
      Delayed Draw Term Loan, 2.49%, 7/25/14     229   213,335         3.03% – 3.04%, 9/24/14     1,590   1,361,812  
      Funded Term Loan, 2.49% – 2.62%, 7/25/14     4,491   4,181,777         Initial Tranche B-3 Term Loan,        
Fresenius SE:               3.03% – 3.04%, 9/24/14     975   834,104  
      Tranche B1 Term Loan, 6.75%, 9/26/14     968   973,779   RedPrairie Corp.:        
      Tranche B2 Term Loan, 6.75%, 9/26/14     521   524,586         Loan (Second Lien), 6.97%, 1/20/13     1,250   1,081,250  
HCA Inc., Tranche A-1 Term Loan, 1.78%, 11/17/12     3,084   2,869,645         Term Loan B, 3.44% – 5.25%, 7/20/12     861   826,320  
HealthSouth Corp., Tranche 1 Term Loan-Assignment         SunGard Data Systems Inc (Solar Capital Corp.),        
  2.54% – 2.55%, 3/10/13     798   757,573     Incremental Term Loan, 6.75%, 2/28/14     1,694   1,706,074  
HealthSouth Corp., Tranche 2 Term Loan-Assignment               12,768,440  
  4.04% – 4.05%, 3/15/14     657   632,965   Independent Power Producers & Energy Traders — 2.4%      
Surgical Care Affiliates, LLC, Term Loan,         Dynegy Holdings Inc.:        
  2.28%, 12/29/14     392   357,114         Term Letter of Credit Facility Term Loan,        
Vanguard Health Holding Co. II, LLC (Vanguard               4.00%, 4/02/13     1,110   1,063,811  
  Health System, Inc.), Replacement Term Loan,               Tranche B Term Loan, 4.00%, 4/02/13     90   85,856  
  2.49%, 9/23/11     1,637   1,594,878   Texas Competitive Electric Holdings Co., LLC (TXU):        
      12,695,628         Initial Tranche B-1 Term Loan,        
Hotels, Restaurants & Leisure — 2.5%               3.74% – 3.78%, 10/10/14     2,477   1,918,853  
BLB Worldwide Holdings, Inc. (Wembley, Inc.) (b)(d):               Initial Tranche B-2 Term Loan,        
      First Priority Term Loan, 4.75%, 7/18/11     2,418   1,426,744         3.74% – 3.78%, 10/10/14     3,261   2,520,589  
      Second Priority Term Loan, 7.06%, 7/18/12     1,500   67,500         Initial Tranche B-3 Term Loan,        
Golden Nugget, Inc.:               3.74% – 3.78%, 10/10/14     2,485   1,903,001  
      Additional Term Advance (First Lien),               7,492,110  
      2.25% – 2.29%, 6/30/14     271   185,651   Insurance — 0.5%        
      Second Lien Term Loan, 3.50%, 12/31/14     500   200,000   Alliant Holdings I, Inc. Term Loan, 3.28%, 8/21/14     980   908,950  
      Term Advance (First Lien), 2.25%, 6/30/14     476   326,114   Conseco, Inc, Term Loan, 6.50%, 10/10/13     728   651,745  
Green Valley Ranch Gaming, LLC, Loan (Second Lien),                
  3.55%, 8/16/14     1,500   367,500         1,560,695  
Harrah’s Operating Co., Inc., Term B-3 Loan,         Internet & Catalog Retail — 0.3%        
  3.28%, 1/28/15     726   576,991   FTD Group, Inc., Base Prime, 6.75%, 8/26/14     688   686,239  
Harrah’s Operating Term B-4 Loan, 9.50%, 10/31/16     1,500   1,462,709   Oriental Trading Co., Inc., Loan (Second Lien),        
OSI Restaurant Partners, LLC, Pre-Funded RC Loan,           6.24%, 1/31/14     500   110,000  
  0.12% – 2.56%, 6/14/13     32   26,727         796,239  
See Notes to Financial Statements.                
                                                          ANNUAL REPORT                                                             OCTOBER 31, 2009       31  

Schedule of Investments (continued)     BlackRock Floating Rate Income Trust (BGT)  
          (Percentages shown are based on Net Assets)  
      Par         Par    
Floating Rate Loan Interests (c)     (000)     Value   Floating Rate Loan Interests (c)     (000)             Value  
Leisure Equipment & Products — 0.3%         Media (concluded)        
24 Hour Fitness Worldwide, Inc., Tranche B Term Loan,         Insight Midwest Holdings, LLC, B Term Loan,        
  2.75% – 2.79%, 6/08/12     USD   965 $   894,234     2.29%, 4/07/14   USD   700   $ 663,500  
Life Sciences Tools & Services — 0.8%         Kabel Deutschland GMBH, A Facility-Assignment,        
Life Technologies Corp., Term B Facility,           2.18%, 6/01/12   EUR   4,000   5,605,645  
  5.25%, 11/23/15       2,378   2,385,424   Lamar Media Corp.:        
                Series B Incremental Loan, 5.50%, 9/28/12   USD   2,875   2,851,569  
Machinery — 1.7%                 Term Loan, 5.50%, 9/30/12     641   635,871  
Accuride Term Loan, 6.00%, 1/31/12   GBP   1,150   1,139,579   Lavena Holding 3 GmbH (Prosiebensat.1 Media AG):        
Blount, Inc., Term Loan B, 2.00% – 3.25%, 8/09/10   USD   533   506,600         Facility B, 3.53%, 6/28/15   EUR   337   323,548  
LN Acquisition Corp. (Lincoln Industrial):               Facility C, 3.78%, 6/30/16     674   647,096  
      Delayed Draw Term Loan (First Lien),         Liberty Cablevision of Puerto Rico, Ltd., Initial Term        
      2.79%, 7/11/14       254   220,823     Facility, 2.25%, 6/17/14   USD   1,466   1,238,981  
      Initial U.S. Term Loan (First Lien), 2.79%, 7/11/14     659   573,043   Local TV Finance, LLC, Term Loan, 2.25%, 5/07/13     739   590,317  
NACCO Materials Handling Group, Inc., Loan,         MCC Iowa LLC (Mediacom Broadband Group),        
  2.24% – 3.41%, 3/21/13       484   372,488     Tranche E Term Loan, 6.50%, 1/03/16     597   598,470  
Oshkosh Truck Corp., Term B Loan,         MCNA Cable Holdings LLC (OneLink Communications),        
  6.29% – 6.33%, 12/06/13       2,115   2,108,175     Loan, 7.23%, 3/01/13 (e)     1,933   773,361  
Standard Steel, LLC:           Mediacom Illinois, LLC (fka Mediacom        
      Delayed Draw Term Loan, 8.25%, 7/02/12     74   63,030     Communications, LLC), Tranche D Term Loan,        
      Initial Term Loan, 9.00%, 7/02/12     368   312,724     5.50%, 3/31/17     1,250   1,251,563  
        5,296,462   Mediannuaire Holding (Pages Jaunes):        
Marine — 1.1%                 Term Loan B2, 3.03%, 1/11/15   EUR   438   457,955  
Delphi Acquisition Holding I B.V. (fka Dockwise):               Term Loan C, 3.53%, 1/11/16     905   947,420  
      Facility B1, 2.28%, 1/12/15     688   649,708         Term Loan D, 5.03%, 1/11/17     500   448,853  
      Facility B2, 2.28%, 1/12/15     470   443,100   Metro-Goldwyn-Mayer Inc., Tranche B Term Loan,        
      Facility C1, 3.16%, 1/11/16     577   544,590     20.50%, 4/09/12   USD   1,905   1,082,186  
      Facility C2, 3.16%, 1/11/16     470   443,100   Mission Broadcasting, Inc., Term B Loan,        
      Facility D1, 4.78%, 1/11/16     650   513,500     5.00%, 10/01/12     1,099   923,069  
      Facility D2, 4.78%, 1/11/16     1,000   790,000   Multicultural Radio Broadcasting, Inc., Term Loan,        
            2.99%, 12/04/13     313   219,100  
        3,383,998   NTL Inc.:        
Media — 25.9%                 C Facility, 3.58%, 7/17/13   GBP   3,875   5,848,420  
Acosta, Inc., 2006 Term Loan, 2.50%, 7/28/13     1,185   1,120,156         Term Loan B1, 2.89%, 9/03/12     434   684,184  
Affinion Group Holdings, Inc. Loan, 8.27%, 3/01/12 (e)     1,021   903,991         Term Loan B2, 2.89%, 9/03/12     508   799,702  
Amsterdamse Beheer — En Consultingmaatschappij BV         NVT Networks LLC, Exit Term Loan, 13.00%, 10/01/12   USD   160   160,050  
  (Casema) Casema:           Newsday, LLC:        
      B1 Term Loan Facility, 2.93%, 11/02/14   EUR   625   873,332         Fixed Rate Term Loan, 10.50%, 8/01/13     1,500   1,570,001  
      C Term Loan Facility, 3.43%, 11/02/15     625   873,332         Floating Rate Term Loan, 6.53%, 8/01/13     1,250   1,231,250  
Atlantic Broadband Finance, LLC, Tranche B-2-A         Nexstar Broadcasting, Inc, Term B Loan,        
  Term Loan, 2.54%, 9/01/11   USD   69   68,033     5.00% – 6.25%, 10/01/12     1,039   976,204  
Atlantic Broadband Tranche B-2-B Term Loan,         Nielson Finance LLC, Dollar Term Loan:        
  6.75%, 6/01/13       1,866   1,848,493         Class A, 2.24%, 8/09/13     1,178   1,093,676  
Bresnan Communications, LLC, Term Loan               Class B, 3.99%, 5/01/16     2,292   2,145,880  
  (Second Lien), 4.75%, 3/29/14     250   235,625   Penton Media, Inc.:        
Catalina Marketing Corp., Initial Term Loan,               Institutional Loan (Second Lien), 5.28%, 1/29/10     1,000   210,000  
  3.00%, 10/01/14       1,345   1,276,398         Term Loan (First Lien), 2.53% – 2.62%, 11/30/09     1,097   744,047  
Cengage Learning Acquisitions, Inc. (Thomson Learning),         Puerto Rico Cable Acquisition Co. Inc. (D/B/A        
  Tranche 1 Incremental Term Loan, 7.50%, 7/03/14     5,411   5,151,017     Choice TV), Term Loan (Second Lien), 7.75%, 2/15/12   692   564,231  
Cequel Communications, LLC, Term Loan,         Quebecor Media, Facility B, 2.28%, 1/17/13     722   682,172  
  2.24% – 4.25%, 11/05/13       4,850   4,619,926   Springer:        
Charter Communications Operating, LLC, New Term Loan,             Term Loan B, 3.14%, 9/16/11   EUR   910   1,247,398  
  6.25%, 3/06/14       1,299   1,177,279         Term Loan C, 3.52%, 9/17/12     1,188   1,627,908  
Charter Communications, Incremental Term Loan,         Sunshine Acquisition Ltd. (aka HIT Entertainment),        
  9.25%, 3/25/14       2,996   3,021,893     Term Facility, 2.73%, 3/20/12   USD   1,998   1,735,807  
FoxCo Acquisition Sub, LLC, Term Loan, 7.50%, 7/14/15     2,391   2,166,610   TWCC Holding Corp., Term Loan, 7.25%, 9/14/15     1,736   1,757,846  
HIT Entertainment, Inc., Term Loan (Second Lien),         Telecommunications Management, LLC:        
  5.98%, 2/26/13       1,000   532,500         Multi-Draw Term Loan, 3.49%, 6/30/13     232   171,473  
HMH Publishing Co. Ltd.:                 Term Loan, 3.49%, 6/30/13     919   680,153  
      Mezzanine, 17.50%, 11/14/14     1,063   292,405   UPC Financing Partnership, Facility U,        
      Tranche A Term Loan, 5.28%, 6/12/14     2,648   2,281,948     4.44%, 12/31/17   EUR   3,767   5,085,895  
Hanley-Wood, LLC (FSC Acquisition), Term Loan,         World Color USA Corp. (fka Quebecor World Inc.),        
  2.49% – 2.53%, 3/08/14       2,212   922,069     9.00%, 7/23/12   USD   1,622   1,622,066  
Hargray Acquisition Co./DPC Acquisition LLC/HCP         Yell Group Plc, Term Loan B1, 3.28%, 10/27/12     2,500   1,760,715  
  Acquisition LLC:                 80,896,838  
      Loan (Second Lien), 5.97%, 1/29/15     500   312,500          
      Term Loan (First Lien), 2.72%, 6/27/14     368   343,708          
Harland Clarke Holdings Corp. (fka Clarke                
  American Corp.), Tranche B Term Loan,                
  2.74% – 2.78%, 6/30/14       1,459   1,218,041          
See Notes to Financial Statements.                
32   ANNUAL REPORT                                                   OCTOBER 31, 2009        

Schedule of Investments (continued)     BlackRock Floating Rate Income Trust (BGT)  
        (Percentages shown are based on Net Assets)  
    Par         Par    
Floating Rate Loan Interests (c)     (000)   Value   Floating Rate Loan Interests (c)     (000)   Value  
Metals & Mining — 0.6%         Software — 0.2%        
Essar Steel Algoma Inc. (fka Algoma Steel Inc.),         Bankruptcy Management Solutions, Inc.:        
  Term Loan, 8.00%, 6/20/13   USD   1,934 $   1,813,014   Loan (Second Lien), 6.49%, 7/31/13   USD   485 $   97,909  
Multi-Utilities — 0.6%         Term Loan (First Lien), 4.25%, 7/31/12     945   567,149  
FirstLight Power Resources, Inc. (fka NE Energy, Inc.):               665,058  
      Synthetic Letter of Credit, 0.16%, 11/01/13     159   145,457   Specialty Retail — 0.6%        
      Term Advance (Second Lien), 4.81%, 5/01/14     750   609,375   Adesa, Inc. (KAR Holdings, Inc.), Initial Term Loan,        
      Term B Advance (First Lien), 2.81%, 11/01/13     1,230   1,128,922     2.50%, 10/21/13     500   477,500  
Mach Gen, LLC Synthetic Letter of Credit Loan         General Nutrition Centers, Inc., Term Loan,        
  (First Lien), 0.03%, 2/22/13     69   63,696     2.50% – 2.54%, 9/16/13     261   240,795  
      1,947,450   Orchard Supply Hardware, Term Loan B,        
Multiline Retail — 1.8%           2.70%, 12/21/10     1,500   1,276,350  
Dollar General Corp.:               1,994,645  
      Tranche B-1 Term Loan, 2.99% – 3.03%, 7/07/14     1,247   1,190,066   Trading Companies & Distributors — 0.4%        
      Tranche B-2 Term Loan, 2.99%, 7/07/14     499   473,685   Beacon Sales Acquisition, Inc., Term B Loan,        
Hema BV Term Loan B (Euro), 5.43%, 1/01/17     EUR   3,800   3,914,585     2.24% – 2.29%, 9/30/13     1,188   1,110,373  
      5,578,336   Wireless Telecommunication Services — 1.5%        
Oil, Gas & Consumable Fuels — 1.9%         Digicel International Finance Ltd., Tranche A,        
Big West Oil, LLC:           2.81%, 3/30/12     1,938   1,855,193  
      Delayed Advance Loan, 4.50%, 5/15/14     USD   920   878,365   MetroPCS Wireless, Inc., Tranche B Term Loan,        
      Initial Advance Loan, 4.50%, 5/15/14     732   698,602     2.50% – 2.75%, 11/03/13     1,605   1,505,191  
Coffeyville Resources, LLC Tranche D Term Loan,         Ntelos Inc., Term B Advance, 5.75%, 8/07/15     1,250   1,253,125  
  8.50%, 12/30/13     1,037   1,036,440         4,613,509  
Drummond Co., Inc., Term Advance, 1.49%, 2/14/11     950   921,500          
Niska Gas Storage Canada ULC, Canadian Term Loan B,       Total Floating Rate Loan Interests — 95.7%       298,940,865  
  2.00%, 5/12/13     450   428,733          
Niska Gas Storage US, LLC:                
      US Term B Loan, 2.00%, 5/12/13     47   45,047          
      Wild Goose Acquisition Draw-US Term B,         Foreign Government Obligations        
      2.00%, 5/12/13     32   30,514   Brazilian Government International Bond,        
Vulcan Energy Term Loan B, 5.50%, 9/30/15     1,750   1,760,938     10.25%, 6/17/13     475   585,200  
      5,800,139   Colombia Government International Bond,        
Paper & Forest Products — 1.0%           3.84%, 3/17/13 (c)(h)     1,200   1,230,000  
Georgia-Pacific LLC, Term B Loan,         Mexican Bonos Series M, 9.00%, 12/22/11   MXN 13,520   1,100,441  
  2.28% – 2.46%, 12/22/12     3,263   3,136,698   Republic of Venezuela, 1.28%, 4/20/11 (c)(h)   USD   4,000   3,440,000  
Verso Paper Finance Holdings LLC, Loan,         South Africa Government International Bond,        
  6.73% – 7.48%, 2/01/13 (e)     360   120,629     7.38%, 4/25/12     2,400   2,634,000  
        Turkey Government International Bond,        
      3,257,327     7.00%, 9/26/16     2,735   3,022,175  
Personal Products — 0.4%         Uruguay Government International Bond,        
American Safety Razor Co., LLC, Loan (Second Lien),           6.88%, 1/19/16   EUR   950   1,460,979  
  6.54%, 1/30/14     1,525   1,212,375   Total Foreign Government Obligations — 4.3%       13,472,795  
Pharmaceuticals — 2.3%                
Catalent Pharma Solutions, Inc. (fka Cardinal                
  Health 409, Inc.), Euro Term Loan, 2.68%, 4/15/14     EUR   2,444   3,164,780     Beneficial    
Warner Chilcott:             Interest    
      Delay Draw Term Loan, 3.78%, 4/12/10     USD   524   524,673   Other Interests (i)     (000)    
      Term Loan A1, 5.50%, 10/14/14     1,390   1,391,134          
      Term Loan B1, 5.75%, 3/30/15     695   695,567   Auto Components — 0.6%        
      Term Loan B2, 5.75%, 4/30/15     1,529   1,530,248   Delphi Debtor in Possession Hold Co. LLP Class B        
          Membership Interests   USD   268   1,963,437  
      7,306,402          
        Diversified Financial Services — 0.1%        
Professional Services — 0.3%         JG Wentorth LLC Preferred Equity Interests     515   434,273  
Booz Allen Hamilton Inc., Tranche B Term Loan,                
  7.50%, 7/31/15     992   1,000,643   Health Care Providers & Services — 0.0%        
        Critical Care Systems International, Inc.     947   190  
Real Estate Management & Development — 0.6%                
Enclave, First Lien Term Loan, 6.14%, 3/01/12     2,000   248,072   Household Durables — 0.0%        
Georgian Towers, Term Loan, 6.14%, 3/01/12     2,000   234,496   Berkline Benchcraft Equity LLC     6,155   —  
Pivotal Promontory, LLC, Second Lien Term Loan,         Media — 0.1%        
  12.00%, 8/31/11 (b)(d)     750   37,500   New Vision LLC Holdings     40,441   328,381  
Realogy Corp. Second Lien Term Loan,         Total Other Interests — 0.8%       2,726,281  
  13.50%, 10/15/17     1,250   1,282,291          
      1,802,359          
See Notes to Financial Statements.                
                                                          ANNUAL REPORT                                                           OCTOBER 31, 2009       33  

Schedule of Investments (continued)             BlackRock Floating Rate Income Trust (BGT)  
                    (Percentages shown are based on Net Assets)  
Preferred Securities                                
Preferred Stocks     Shares   Value   (f) Represents a zero-coupon bond. Rate shown reflects the current yield as of  
          report date.                    
Capital Markets — 0.0%                                
Marsico Parent Superholdco, LLC, 16.75% (a)   100 $   22,500   (g) Convertible security.                
Total Preferred Securities — 0.0%     22,500   (h) Restricted securities as to resale, representing 1.5% of net assets were as follows:  
                    Acquisition          
          Issue         Date     Cost     Value  
Warrants (j)           Colombia Government                
              International Bond,                
Chemicals — 0.0%               3.84%, 3/17/13     2/15/06   $ 1,277,303   $ 1,230,000  
British Vita Holding Co. (non expiring) (a)   166   —     Republic of Venezuela,                
Machinery — 0.0%               1.28%, 4/20/11     10/26/04   3,860,186   3,440,000  
Synventive Molding Solutions (expires 1/15/13)   2   —     Total             $ 5,137,489   $ 4,670,000  
Media — 0.0%                                
Cumulus Media Warrants (expires 12/31/19)   2,315   2,176   (i) Other interests represent beneficial interest in liquidation trusts and other reorgani-  
New Vision Holdings LLC (expires 9/30/14)   22,447   224     zation entities and are non-income producing.          
      2,400   (j) Warrants entitle the Fund to purchase a predetermined number of shares of com-  
          mon stock and are non-income producing. The purchase price and number of  
Total Warrants — 0.0%       2,400     shares are subject to adjustment under certain conditions until the expiration date.  
Total Long-Term Investments         (k) Investments in companies considered to be an affiliate of the Fund, for purposes of  
(Cost — $433,669,495) — 125.9%     393,951,147     Section 2(a)(3) of the Investment Company Act of 1940, were as follows:    
                          Net      
          Affiliate             Activity     Income  
Short-Term Securities           BlackRock Liquidity Funds, TempFund,            
BlackRock Liquidity Funds, TempFund,             Institutional Class         $ 9,320,934   $ 16,254  
  Institutional Class, 0.18% (k)(l)   9,320,934   9,320,934                          
        (l) Represents the current yield as of report date.          
Total Short-Term Securities                                
(Cost — $9,320,934) — 3.0%       9,320,934   •   For Fund compliance purposes, the Fund industry classifications refer to any one  
          or more of the industry sub-classifications used by one or more widely recognized  
          market indexes or ratings group indexes, and/or as defined by Fund management.  
          This definition may not apply for purposes of this report, which may combine  
          industry sub-classifications for reporting ease.          
Options Purchased     Contracts                            
Over-the-Counter Call Options       •   Foreign currency exchange contracts as of October 31, 2009 were as follows:  
Marsico Parent Superholdco LLC, expiring 12/21/19         Currency     Currency       Settlement   Unrealized  
  at USD 942.86, Broker Goldman Sachs Group, Inc.   26   6,110     Purchased       Sold   Counterparty   Date   Depreciation  
Total Options Purchased (Cost — $25,422) — 0.0%     6,110     EUR   248,000   USD   365,155   Citibank NA   11/03/09 $   (186)  
Total Investments (Cost — $443,015,851*) — 128.9%     403,278,191     USD70,188,421   EUR 48,087,500   Citibank NA   11/18/09     (576,271)  
Liabilities in Excess of Other Assets — (10.1)%     (31,593,957)     USD   9,468,195   GBP   5,811,500   Citibank NA   1/27/10     (65,153)  
Preferred Shares, at Redemption Value — (18.8)%     (58,812,035)     USD   1,038,130   MXN 14,000,000   Citibank NA   1/27/10     (9,353)  
Net Assets Applicable to Common Shares — 100.0%   $ 312,872,199     Total                 $ (650,963)  
* The cost and unrealized appreciation (depreciation) of investments as of October 31,   •   Credit default swaps on single-name issue — buy protection oustanding as of  
        2009, as computed for federal income tax purposes, were as follows:       October 31, 2009 were as follows:            
        Aggregate cost     $ 443,044,301                          
                Pay         Notional      
        Gross unrealized appreciation   $ 12,539,776           Fixed   Counter-       Amount   Unrealized  
        Gross unrealized depreciation     (52,305,886)     Issuer     Rate   party   Expiration   (000)   Appreciation  
        Net unrealized depreciation   $ (39,766,110)     Ford Motor Co.   5.00%   Deutsche   September        
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933.               Bank AG   2014   USD 275   $ 4,930  
These securities may be resold in transactions exempt from registration to qualified                          
        institutional investors.         •   Credit default swaps on single-name issues — sold protection outstanding as of  
          October 31, 2009 were as follows:            
(b) Non-income producing security.                              
  (c) Variable rate security. Rate shown is as of report date.           Receive           Notional      
              Fixed   Counter-     Credit   Amount   Unrealized  
(d) Issuer filed for bankruptcy and/or is in default of interest payments.                            
          Issuer   Rate   party Expiration Rating 1 (000) 2 Depreciation  
  (e) Represents a payment-in-kind security which may pay interest/dividends in                          
        additional par/shares.           BAA Ferrovial                    
          Junior Term       Deutsche            
            Loan   2.00%   Bank AG March 2012   NR     GPB 1,800 $   (388,694)  
            1   Using Standard & Poor’s rating of the issuer.        
            2   The maximum potential amount the Fund may pay should a negative credit  
            event take place as defined under the terms of the agreement.      
See Notes to Financial Statements.                              
34   ANNUAL REPORT               OCTOBER 31, 2009          

Schedule of Investments (concluded)           BlackRock Floating Rate Income Trust (BGT)  
  •   Credit default swaps on index issue — buy protection oustanding as of October 31,     The following table summarizes the inputs used as of October 31, 2009 in  
  2009 were as follows:               determining the fair valuation of the Fund’s investments:    
                  Valuation         Investments in  
    Pay       Notional                    
                  Inputs             Securities  
    Fixed   Counter-     Amount   Unrealized                
  Issuer   Rate   party   Expiration   (000)   Depreciation                     Assets  
                  Level 1          
  LCDX North                   Long-Term Investments:        
    America Index                     Common Stocks       $ 90,850  
    Series 12     Credit Suisse       June             Short-Term Securities       9,320,934  
    Volume 1   5.00% International   2014   USD 465   $ (65,282)     Total Level 1         9,411,784  
  •   Fair Value Measurements — Various inputs are used in determining the fair value of     Level 2          
  investments, which are as follows:               Long-Term Investments:        
                      Common Stocks       107,959  
  • Level 1 — price quotations in active markets/exchanges for identical assets         Corporate Bonds       78,186,766  
      and liabilities                     Floating Rate Loan Interests       214,513,792  
  • Level 2 — other observable inputs (including, but not limited to: quoted prices for         Foreign Government Obligations       13,472,795  
      similar assets or liabilities in markets that are active, quoted prices for identical         Preferred Securities       22,500  
      or similar assets or liabilities in markets that are not active, inputs other than         Warrants         2,176  
      quoted prices that are observable for the assets or liabilities (such as interest     Total Level 2         306,305,988  
      rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and     Level 3          
      default rates) or other market-corroborated inputs)             Long-Term Investments:        
  • Level 3 — unobservable inputs based on the best information available in the         Common Stocks       112,485  
                      Corporate Bonds       288,246  
      circumstances, to the extent observable inputs are not available (including the         Floating Rate Loan Interests       84,427,073  
      Fund’s own assumptions used in determining the fair value of investments)         Other Interests         2,726,281  
  The inputs or methodology used for valuing securities are not necessarily an indica-         Warrants         224  
  tion of the risk associated with investing in those securities. For information about     Total Level 3         87,554,309  
  the Fund’s policy regarding valuation of investments and other significant accounting     Total         $ 403,272,081  
  policies, please refer to Note 1 of the Notes to Financial Statements.                  
                  Valuation       Other Financial  
                  Inputs       Instruments 1  
                          Assets   Liabilities  
                  Level 1       —   —  
                  Level 2     $ 11,040   $ (716,245)  
                  Level 3       1,531   (461,174)  
                  Total     $ 12,571   $ (1,177,419)  
                    1   Other financial instruments are swaps, foreign currency exchange contracts,  
                    unfunded loan commitments and options. Swaps, foreign currency exchange  
                    contracts and unfunded loan commitments are valued at the unrealized appre-  
                    ciation/depreciation on the instrument and options are shown at market value.  
  The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:          
                      Investments in Securities      
              Common     Corporate   Floating Rate     Other      
                Stocks     Bonds   Loan Interests   Interests   Warrants   Total  
  Balance, as of October 31, 2008           —     — $120,800,878 $   318   —   $ 120,801,196  
  Accrued discounts/premiums           —     —   103,138   —   —   103,138  
  Realized gain (loss)               —     —   (20,210,121)   —   —   (20,210,121)  
  Change in unrealized appreciation/depreciation 2         —     —   34,906,002   (2,383,496) $   (8,051)   32,514,455  
  Net purchases (sales)             —     —   (44,870,950)   2,383,369   8,051   (42,479,530)  
  Net transfers in/out of Level 3         $ 112,485     $ 288,246   (6,301,874)   2,726,090   224   (3,174,829)  
  Balance as of October 31, 2009         $ 112,485     $ 288,246 $ 84,427,073 $   2,726,281 $   224   $ 87,554,309  
    2 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.          
            Investments in                
          Other Financial                
            Instruments                
        Assets     Liabilities                
  Balance, as of October 31, 2008     —   $ (543,254)                
  Accrued discounts/premiums     —     —                
  Realized gain (loss)         —     —                
  Change in unrealized appreciation/depreciation       154,560                
  Net purchases (sales)       —     —                
  Net transfers in/out of Level 3   $ 1,531     (72,480)                
  Balance, as of October 31, 2009   $ 1,531   $ (461,174)                
See Notes to Financial Statements.                        
      ANNUAL REPORT               OCTOBER 31, 2009     35  

Statements of Assets and Liabilities            
    BlackRock   BlackRock   BlackRock   BlackRock   BlackRock   BlackRock  
    Credit   Credit   Credit   Credit   Enhanced   Floating  
    Allocation   Allocation   Allocation   Allocation   Capital   Rate  
    Income   Income   Income   Income   and Income   Income  
    Trust I, Inc.   Trust II, Inc.   Trust III   Trust IV   Fund, Inc.   Trust  
October 31, 2009     (PSW)   (PSY)   (BPP)   (BTZ)   (CII)   (BGT)  
      Assets                
Investments at value — unaffiliated 1   $ 80,372,818   $ 399,129,254   $ 172,356,269   $ 555,220,835   $ 604,321,715   $ 393,957,257  
Investments at value — affiliated 2   33,286,296   41,019,397   51,450,797   267,832,781   24,567,455   9,320,934  
Unrealized appreciation on swaps   —   —   —   —   —   4,930  
Cash     —   —   702   320   —   179,334  
Cash collateral pledged for options written   —   —   —   —   1,228,905   —  
Cash collateral for swaps     —   —   —   600,000   —   600,000  
Swap premiums paid     —   —   —   —   —   102,776  
Foreign currency at value 3     424   —   529   49   7,407   9,337,968  
Investments sold receivable     38,531,774   141,858,976   62,124,877   117,670,917   18,280,263   6,625,542  
Interest receivable     1,232,806   6,597,165   2,228,881   7,302,689   —   3,131,832  
Dividends receivable     129,555   133,293   58,707   832,499   1,348,426   —  
Margin variation receivable     26,000   36,719   20,563   197,020   —   —  
Income receivable — affiliated     —   204   256   304   —   341  
Swaps receivable     —   —   —   —   —   6,893  
Principal paydown receivable     —   —   —   —   —   2,934  
Other assets     —   52,733   55,181   81,418   —   124,654  
Prepaid expenses     54,878   86,085   41,606   119,075   55,894   127,541  
Total assets     153,634,551   588,913,826   288,338,368   949,857,907   649,810,065   423,522,936  
      Liabilities                
Unrealized depreciation on swaps   168,952   337,904   168,952   675,809   —   453,976  
Unrealized depreciation on unfunded loan commitments   —   —   —   —   —   70,949  
Unrealized depreciation on foreign currency              
    exchange contracts     —   —   —   —   —   650,963  
Loan payable     —   —   —   —   —   14,000,000  
Options written at value 4     —   —   —   166,210   6,377,146   —  
Reverse repurchase agreements   4,972,041   9,510,590   13,234,688   61,576,368   —   —  
Investments purchased payable   12,023,936   —   —   —   24,384,912   35,248,237  
Investment advisory fees payable   71,449   303,207   159,933   522,028   469,580   206,219  
Income dividends payable — Common Shares   36,588   196,712   69,120   550,627   —   51,113  
Swaps payable     6,067   12,133   6,067   24,267   —   4,317  
Interest payable     1,761   3,368   4,687   21,808   —   40,826  
Other affiliates payable     728   3,172   1,636   5,428   3,882   2,224  
Officer’s and Directors’ fees payable   181   53,660   56,606   82,674   1,287   78,876  
Other accrued expenses payable   45,591   109,424   76,539   189,457   111,544   185,052  
Other liabilities     —   —   —   —   —   845,950  
Total liabilities     17,327,294   10,530,170   13,778,228   63,814,676   31,348,351   51,838,702  
      Preferred Shares at Redemption Value              
$25,000 per share liquidation preferrence, plus              
    unpaid dividends 5,6,7     40,258,949   169,090,727   70,426,884   231,044,104   —   58,812,035  
Net Assets Applicable to Common Shareholders   $ 96,048,308   $ 409,292,929   $ 204,133,256   $ 654,999,127   $ 618,461,714   $ 312,872,199  
      Net Assets Applicable to Common Shareholders Consist of              
Paid-in capital 8,9,10     $ 237,664,112   $ 942,700,922   $ 423,649,824   $1,138,011,175   $ 808,123,162   $ 427,560,397  
Undistributed (distributions in excess of) net              
    investment income     636,666   2,088,988   952,028   1,348,832   —   (397,610)  
Accumulated net realized loss     (128,402,541)   (451,276,374)   (187,666,466)   (403,003,336)   (131,729,362)   (73,097,284)  
Net unrealized appreciation/depreciation   (13,849,929)   (84,220,607)   (32,802,130)   (81,357,544)   (57,932,086)   (41,193,304)  
Net Assets Applicable to Common Shareholders   $ 96,048,308   $ 409,292,929   $ 204,133,256   $ 654,999,127   $ 618,461,714   $ 312,872,199  
Net asset value per Common Share   $ 9.31   $ 10.03   $ 11.05   $ 12.64   $ 14.40   $ 13.29  
      1 Investments at cost — unaffiliated   $ 94,148,823   $ 483,046,802   $ 205,009,029   $ 637,401,845   $ 665,068,380   $ 433,694,917  
      2 Investments at cost — affiliated   $ 33,286,296   $ 41,019,397   $ 51,450,797   $ 267,832,781   $ 24,567,455   $ 9,320,934  
      3 Foreign currency at cost     $ 368   —   $ 459   $ 43   $ 9,142   $ 9,386,817  
      4 Premiums received     —   —   —   $ 828,039   $ 9,193,459   —  
      5 Preferred Shares par value per share   $ 0.10   $ 0.10   $ 0.001   $ 0.001   —   $ 0.001  
      6 Preferred Shares outstanding   1,610   6,761   2,817   9,240   —   2,352  
      7 Preferred Shares authorized   5,460   22,000   unlimited   unlimited   —   unlimited  
      8 Common Shares par value per share   $ 0.10   $ 0.10   $ 0.001   $ 0.001   $ 0.10   $ 0.001  
      9 Common Shares outstanding   10,311,941   40,807,418   18,467,785   51,828,157   42,953,312   23,545,239  
    10 Common Shares authorized   199,994,540   199,978,000   unlimited   unlimited   200 million   unlimited  
See Notes to Financial Statements.              
36   ANNUAL REPORT       OCTOBER 31, 2009      

Statements of Operations                
  BlackRock   BlackRock   BlackRock   BlackRock     BlackRock   BlackRock  
        Credit         Credit         Credit           Credit       Enhanced         Floating  
  Allocation   Allocation   Allocation   Allocation     Capital           Rate  
        Income         Income         Income         Income     and Income         Income  
  Trust I, Inc.   Trust II, Inc.         Trust III         Trust IV       Fund, Inc.           Trust  
Year Ended October 31, 2009         (PSW)           (PSY)         (BPP)           (BTZ)       (CII)           (BGT)  
      Investment Income                
Interest   $ 7,416,978   $ 37,527,272   $ 17,161,194   $ 41,120,279   $ 1,342   $ 26,881,305  
Dividends   2,464,323   11,794,850   5,227,665   18,091,488   17,659,173   —  
Foreign taxes withheld   —   —   —   —     (115,844)   —  
Income — affiliated   130,058   155,313   133,485   486,591     143,663   23,848  
Facility and other fees   —   —   —   —     —   503,103  
Total income   10,011,359   49,477,435   22,522,344   59,698,358   17,688,334   27,408,256  
      Expenses                
Investment advisory   732,203   3,091,438   1,631,690   5,363,633     4,832,658   2,774,485  
Commissions for Preferred Shares   74,688   348,733   134,702   375,820     —   102,063  
Professional   66,950   72,163   79,888   142,814     75,892   253,450  
Transfer agent   46,330   126,203   37,871   35,582     93,722   29,425  
Accounting services   21,930   120,409   84,218   163,930     161,229   58,206  
Printing   14,291   58,934   55,147   147,566     45,877   73,520  
Officer and Directors   10,058   53,432   35,932   90,453     70,049   49,794  
Registration   9,180   13,907   9,278   17,673     14,571   10,416  
Custodian   6,980   24,134   15,059   36,325     52,648   55,304  
Borrowing costs 1   —   —   —   —     —   391,557  
Miscellaneous   61,634   107,378   63,515   130,998     52,161   117,808  
Total expenses excluding interest expense   1,044,244   4,016,731   2,147,300   6,504,794     5,398,807   3,916,028  
Interest expense   102,223   229,496   389,341   1,784,509     —   1,140,406  
Total expenses   1,146,467   4,246,227   2,536,641   8,289,303     5,398,807   5,056,434  
Less fees waived by advisor   (14,003)   (14,491)   (21,506)   (95,646)     (7,172)   (709,042)  
Less fees paid indirectly   (1,843)   (852)   (3,758)   (1,210)     —   —  
Total expenses after fees waived and                
    paid indirectly   1,130,621   4,230,884   2,511,377   8,192,447     5,391,635   4,347,392  
Net investment income   8,880,738   45,246,551   20,010,967   51,505,911   12,296,699   23,060,864  
      Realized and Unrealized Gain (Loss)                
Net realized gain (loss) from:                
    Investments   (55,149,960)   (188,070,488)   (112,478,894)   (248,073,396)   (103,821,441)   (44,719,252)  
    Financial futures contracts and swaps   (1,780,676)   (8,923,503)   (3,915,858)   (2,741,351)     (617,742)   (1,014,281)  
    Foreign currency transactions   4,366   34,450   1,348   22,255     —   (2,653,326)  
    Options written   —   —   -   3,763,345   52,995,108   —  
  (56,926,270)   (196,959,541)   (116,393,404)   (247,029,147)   (51,444,075)   (48,386,859)  
Net change in unrealized appreciation/depreciation on:                
    Investments   77,627,511   284,111,656   160,001,314   372,102,104   142,551,744   118,712,825  
    Financial futures contracts and swaps   527,517   1,647,334   906,527   4,642,624     —   371,495  
    Foreign currency transactions   (4,229)   (32,957)   (990)   (158,256)     (948)   (6,642,896)  
    Options written   —   —   —   2,230,492     5,758,405   —  
    Unfunded corporate loans   —   —   —   —     —   96,088  
  78,150,799   285,726,033   160,906,851   378,816,964   148,309,201   112,537,512  
Total realized and unrealized gain   21,224,529   88,766,492   44,513,447   131,787,817   96,865,126   64,150,653  
      Dividends to Preferred Shareholders From                
Net investment income   (774,824)   (3,570,342)   (577,861)   (3,828,948)     —   (971,243)  
Net Increase in Net Assets Applicable to Common                
    Shareholders Resulting from Operations   $ 29,330,443   $ 130,442,701   $ 63,946,553   $ 179,464,780   $ 109,161,825   $ 86,240,274  
1 See Note 8 of the Notes to the Financial Statements for details of borrowings.              
See Notes to Financial Statements.                
                                                          ANNUAL REPORT         OCTOBER 31, 2009     37  

Statements of Changes in Net Assets              
      BlackRock Credit Allocation   BlackRock Credit Allocation  
      Income Trust I, Inc. (PSW)   Income Trust II, Inc. (PSY)  
Increase (Decrease) in Net Assets     Year Ended October 31,   Year Ended October 31,  
Applicable to Common Shareholders:     2009     2008   2009   2008  
      Operations                
Net investment income       $ 8,880,738   $ 17,531,692   $ 45,246,551   $ 70,160,283  
Net realized loss       (56,926,270)     (40,404,468)   (196,959,541)   (147,042,661)  
Net change in unrealized appreciation/depreciation     78,150,799     (83,863,786)   285,726,033   (333,625,419)  
Dividends to Preferred Shareholders from net investment income     (774,824)     (4,921,335)   (3,570,342)   (19,937,495)  
Net increase (decrease) in net assets applicable to Common Shareholders              
    resulting from operations       29,330,443     (111,657,897)   130,442,701   (430,445,292)  
      Dividends and Distributions to Common Shareholders From              
Net investment income       (8,498,069)     (12,521,666)   (45,358,157)   (46,831,403)  
Tax return of capital       (1,345,345)     (545,246)   (116,310)   (9,002,427)  
Decrease in net assets resulting from dividends and distributions              
    to Common Shareholders       (9,843,414)     (13,066,912)   (45,474,467)   (55,833,830)  
      Capital Share Transactions              
Reinvestment of common dividends     131,419     —   1,192,453   —  
      Net Assets Applicable to Common Shareholders              
Total increase (decrease) in net assets     19,618,448     (124,724,809)   86,160,687   (486,279,122)  
Beginning of year       76,429,860     201,154,669   323,132,242   809,411,364  
End of year       $ 96,048,308   $ 76,429,860   $ 409,292,929   $ 323,132,242  
Undistributed net investment income     $ 636,666   $ 1,283,192   $ 2,088,988   $ 7,207,075  
    BlackRock Credit Allocation   BlackRock Credit Allocation  
      Income Trust III (BPP)     Income Trust IV (BTZ)  
    Year   Period     Year      
    Ended   January 1, 2008     Ended   Year Ended  
Increase (Decrease) in Net Assets   October 31,   to October 31,     December 31,   October 31,  
Applicable to Common Shareholders:   2009   2008     2007   2009   2008  
      Operations                
Net investment income     $ 20,010,967   $ 27,233,861   $ 37,729,277   $ 51,505,911   $ 68,908,426  
Net realized loss     (116,393,404)   (47,985,932)     (24,690,221)   (247,029,147)   (113,133,432)  
Net change in unrealized appreciation/depreciation   160,906,851   (149,715,592)     (61,889,014)   378,816,964   (408,221,553)  
Dividends and distributions to Preferred Shareholders from:              
    Net investment income     (577,861)   (5,653,232)     (11,458,715)   (3,828,948)   (17,100,517)  
    Net realized gain     —   —     (87,490)   —   —  
Net increase (decrease) in net assets applicable to Common Shareholders              
    resulting from operations     63,946,553   (176,120,895)     (60,396,163)   179,464,780   (469,547,076)  
      Dividends and Distributions to Common Shareholders From              
Net investment income     (17,461,459)   (15,206,928)     (29,219,599)   (48,398,817)   (46,857,132)  
Net realized gain     —   —     (312,510)   —   —  
Tax return of capital     (4,250,036)   (5,480,035)     (2,820,986)   (24,678,883)   (43,518,226)  
Decrease in net assets resulting from dividends and distributions              
    to Common Shareholders     (21,711,495)   (20,686,963)     (32,353,095)   (73,077,700)   (90,375,358)  
      Capital Share Transactions              
Reinvestment of common dividends   587,363   101,702     770,755   —   —  
      Net Assets Applicable to Common Shareholders              
Total increase (decrease) in net assets   42,822,421   (196,706,156)     (91,978,503)   106,387,080   (559,922,434)  
Beginning of period     161,310,835   358,016,991     449,995,494   548,612,047   1,108,534,481  
End of period     $ 204,133,256   $ 161,310,835   $ 358,016,991   $ 654,999,127   $ 548,612,047  
Undistributed (distributions in excess of) net investment income   $ 952,028   $ 2,846,583   $ (2,571,328)   $ 1,348,832   $ 3,486,479  
See Notes to Financial Statements.              
38   ANNUAL REPORT     OCTOBER 31, 2009      

Statements of Changes in Net Assets (concluded)          
  BlackRock Enhanced Capital     BlackRock    
  and Income Fund, Inc. (CII)   Floating Rate Income Trust (BGT)  
  Year   Period January 1,   Year   Year   Period   Year  
  Ended   2008 to   Ended   Ended   January 1, 2008   Ended  
Increase (Decrease) in Net Assets       October 31,   October 31,   December 31,   October 31,   to October 31,   December 31,  
Applicable to Common Shareholders:   2009   2008   2007   2009   2008   2007  
      Operations              
Net investment income   $ 12,296,699   $ 2,834,944   $ 3,828,423   $ 23,060,864   $ 33,370,850   $ 47,903,772  
Net realized gain (loss)   (51,444,075)   5,942,502   24,442,607   (48,386,859)   (19,428,459)   (10,326,522)  
Net change in unrealized appreciation/depreciation   148,309,201   (83,432,417)   (17,410,396)   112,537,512   (136,762,427)   (22,345,656)  
Dividends to Preferred Shareholders from net              
    investment income   —   —   —   (971,243)   (5,542,312)   (12,723,631)  
Net increase (decrease) in net assets applicable to              
    Common Shareholders resulting from operations   109,161,825   (74,654,971)   10,860,634   86,240,274   (128,362,348)   2,507,963  
      Dividends and Distributions to Common Shareholders From              
Net investment income   (12,510,205)   (2,820,467)   (4,178,081)   (27,963,106)   (24,133,870)   (26,833,571)  
Net realized gain   (50,728,478)   (7,621,956)   (25,569,419)   —   —   —  
Tax return of capital   (19,660,314)   (7,292,188)   —   (9,994,857)   —   (8,473,282)  
Decrease in net assets resulting from dividends and              
    distributions to shareholders   (82,898,997)   (17,734,611)   (29,747,500)   (37,957,963)   (24,133,870)   (35,306,853)  
      Capital Share Transactions              
Value of shares resulting from reorganization   420,968,153   —   —   —   —   —  
Reinvestment of common dividends   3,234,875   —   —   —   —   820,433  
Net increase in net assets derived from              
    capital share transactions   424,203,028   —   —   —   —   820,433  
      Net Assets Applicable to Common Shareholders              
Total increase (decrease) in net assets   450,465,856   (92,389,582)   (18,886,866)   48,282,311   (152,496,218)   (31,978,457)  
Beginning of period   167,995,858   260,385,440   279,272,306   264,589,888   417,086,106   449,064,563  
End of period   $ 618,461,714   $ 167,995,858   $ 260,385,440   $ 312,872,199   $ 264,589,888   $ 417,086,106  
Undistributed (distributions in excess of)              
    net investment income   —   $ 205,627   —   $ (397,610)   $ 8,661,698   $ 219,332  
See Notes to Financial Statements.              
                                                          ANNUAL REPORT         OCTOBER 31, 2009   39  

Statement of Cash Flows      
            BlackRock  
      Floating Rate  
      Income  
Year Ended October 31, 2009         Trust (BGT)  
      Cash Provided by Operating Activities      
Net increase in net assets resulting from operations, excluding dividends to Preferred Shareholders     $ 87,211,517  
Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities:    
    Decrease in interest receivable     2,477,996  
    Decrease in commitment fees receivable     2,301  
    Increase in other assets       (37,618)  
    Increase in income receivable — affiliated     (341)  
    Increase in prepaid expenses     (74,683)  
    Decrease in swaps receivable     19,241  
    Decrease in swaps payable       (150,019)  
    Decrease in investment advisor payable     (37,245)  
    Decrease in interest expense payable     (86,768)  
    Decrease in other affiliates payable     (884)  
    Increase in accrued expenses payable     24,637  
    Increase in other liabilities       838,450  
    Increase in Officer’s and Directors’ payable     30,273  
    Net realized and unrealized gain     (67,171,527)  
    Amortization of premium and discount on investments     (2,498,618)  
    Paid-in-kind income       (890,200)  
    Increase in cash collateral on swaps     (600,000)  
    Net periodic and termination payments of swaps     (340,836)  
Proceeds from sales and paydowns of long-term investments     262,712,645  
Purchases of long-term investments     (131,639,514)  
Net purchases of short-term securities     (7,820,185)  
Cash provided by operating activities     141,968,622  
      Cash Used for Financing Activities      
Cash receipts from borrowings       163,209,375  
Cash payments from borrowings     (272,359,375)  
Cash dividends paid to Common Shareholders     (38,016,260)  
Cash dividends paid to Preferred Shareholders     (980,133)  
Cash used for financing activities     (148,146,393)  
      Cash Impact from Foreign Exchange Fluctuations      
Cash impact from foreign exchange fluctuations     146,028  
      Cash:        
Net decrease in cash       (6,031,743)  
Cash and foreign currency at beginning of year     15,549,045  
Cash and foreign currency at end of year     $ 9,517,302  
      Cash Flow Information:        
Cash paid during the year for interest     $ 1,227,174  
      A Statement of Cash Flows is presented when a Fund had a significant amount of borrowing during the year, based on the average borrowing outstanding    
      in relation to total assets.        
See Notes to Financial Statements.      
40   ANNUAL REPORT   OCTOBER 31, 2009    

Financial Highlights     BlackRock Credit Allocation Income Trust I, Inc. (PSW)  
    Year Ended October 31,        
  2009   2008   2007     2006     2005  
      Per Share Operating Performance                
Net asset value, beginning of year   $ 7.43   $ 19.54   $ 22.25   $ 22.36   $ 23.69  
Net investment income   0.86 1   1.70 1   2.01 1     2.14 1     2.16  
Net realized and unrealized gain (loss)   2.06   (12.06)   (2.41)     0.07     (1.09)  
Dividends to Preferred Shareholders from net investment income   (0.08)   (0.48)   (0.71)     (0.63)     (0.40)  
Net increase (decrease) from investment operations   2.84   (10.84)   (1.11)     1.58     0.67  
Dividends and distributions to Common Shareholders from:                
    Net investment income   (0.83)   (1.22)   (1.18)     (1.69)     (2.00)  
Tax return of capital   (0.13)   (0.05)   (0.42)     —     —  
Total dividends and distributions   (0.96)   (1.27)   (1.60)     (1.69)     (2.00)  
Net asset value, end of year   $ 9.31   $ 7.43   $ 19.54   $ 22.25   $ 22.36  
Market price, end of year   $ 8.24   $ 7.00   $ 17.29   $ 21.26   $ 21.03  
      Total Investment Return 2                
Based on net asset value   46.46%   (58.09)%   (5.03)%     7.97%     3.25%  
Based on market price   37.59%   (55.38)%   (12.05)%     9.69%     0.73%  
      Ratios to Average Net Assets Applicable to Common Shareholders                
Total expenses 3   1.61%   2.00%   1.32%     1.29%     1.26%  
Total expenses after fees waived and paid indirectly 3   1.59%   2.00%   1.32%     1.29%     1.26%  
Total expenses after fees waived and paid indirectly and excluding                
interest expense 3   1.44%   1.48%   1.29%     1.29%     1.26%  
Net investment income 3   12.45%   10.79%   9.38%     9.70%     9.23%  
Dividends to Preferred Shareholders   1.09%   3.03%   3.29%     2.84%     1.71%  
Net investment income to Common Shareholders   11.36%   7.76%   6.09%     6.86%     7.52%  
      Supplemental Data                
Net assets applicable to Common Shareholders, end of year (000)   $ 96,048   $ 76,430   $ 201,155   $ 228,734   $ 229,850  
Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)   $ 40,250   $ 68,250   $ 136,500   $ 136,500   $ 136,500  
Borrowings outstanding, end of year (000)   $ 4,972   $ 4,024   $ 590     —     —  
Average borrowings outstanding, during the year (000)   $ 5,321   $ 25,692   $ 2,690     —     —  
Portfolio turnover   36%   119%   88%     19%     25%  
Asset coverage per Preferred Share at $25,000 liquidation preference, end of year   $ 84,663   $ 53,009   $ 61,846   $ 66,907   $ 67,115  
      1 Based on average shares outstanding.                
      2 Total investment returns based on market value, 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.          
      3 Do not reflect the effect of dividends to Preferred Shareholders.                
See Notes to Financial Statements.                
                                                          ANNUAL REPORT     OCTOBER 31, 2009       41  

Financial Highlights     BlackRock Credit Allocation Income Trust II, Inc. (PSY)  
      Year Ended October 31,        
    2009   2008   2007     2006     2005  
      Per Share Operating Performance                
Net asset value, beginning of year   $ 7.96   $ 19.93   $ 22.36   $ 22.26   $ 23.48  
Net investment income 1     1.11   1.73   2.02     2.03     2.09  
Net realized and unrealized gain (loss)   2.17   (11.84)   (2.35)     0.32     (0.91)  
Dividends to Preferred Shareholders from net investment income   (0.09)   (0.49)   (0.73)     (0.65)     (0.40)  
Net increase (decrease) from investment operations   3.19   (10.60)   (1.06)     1.70     0.78  
Dividends and distributions to Common Shareholders from:                
    Net investment income     (1.12)   (1.15)   (1.16)     (1.51)     (2.00)  
Tax return of capital     — 2   (0.22)   (0.21)     (0.09)     —  
Total dividends and distributions   (1.12)   (1.37)   (1.37)     (1.60)     (2.00)  
Net asset value, end of year     $ 10.03   $ 7.96   $ 19.93   $ 22.36   $ 22.26  
Market price, end of year     $ 8.90   $ 8.10   $ 16.94   $ 20.12   $ 21.20  
      Total Investment Return 3                  
Based on net asset value     48.36%   (55.71)%   (4.35)%     8.77%     3.73%  
Based on market price     29.37%   (46.97)%   (9.65)%     2.77%     1.43%  
      Ratios to Average Net Assets Applicable to Common Shareholders                
Total expenses 4     1.41%   1.90%   1.27%     1.23%     1.20%  
Total expenses after fees waived and paid indirectly 4   1.41%   1.90%   1.27%     1.23%     1.20%  
Total expenses after fees waived and paid indirectly and excluding                
interest expense 4     1.33%   1.40%   1.23%     1.23%     1.20%  
Net investment income 4     15.05%   10.71%   9.29%     9.26%     8.96%  
Dividends to Preferred Shareholders   1.19%   3.04%   3.34%     2.96%     1.73%  
Net investment income to Common Shareholders   13.86%   7.67%   5.95%     6.30%     7.23%  
      Supplemental Data                  
Net assets applicable to Common Shareholders, end of year (000)   $ 409,293   $ 323,132   $ 809,411   $ 907,897   $ 903,601  
Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)   $ 169,025   $ 275,000   $ 550,000   $ 550,000   $ 550,000  
Borrowings outstanding, end of year (000)   $ 9,511   $ 54,369   —     —     —  
Average borrowings outstanding, during the year (000)   $ 15,842   $ 94,908   $ 14,375     —     —  
Portfolio turnover     16%   120%   81%     18%     28%  
Asset coverage per Preferred Share at $25,000 liquidation preference, end of year   $ 85,547   $ 54,408   $ 61,817   $ 66,294   $ 66,077  
      1 Based on average shares outstanding.                
      2 Amount is less than $(0.01) per share.                
      3 Total investment returns based on market value, 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.          
      4 Do not reflect the effect of dividends to Preferred Shareholders.                
See Notes to Financial Statements.                
42   ANNUAL REPORT     OCTOBER 31, 2009          

Financial Highlights       BlackRock Credit Allocation Income Trust III (BPP)  
    Period              
  Year   January 1,              
  Ended   2008 to              
  October 31,   October 31,     Year Ended December 31,      
  2009   2008   2007   2006     2005     2004  
      Per Share Operating Performance                  
Net asset value, beginning of period   $ 8.77   $ 19.47   $ 24.52   $ 24.43   $ 25.88   $ 25.58  
Net investment income   1.09 1   1.48 1   2.05   2.05     2.11     2.22  
Net realized and unrealized gain (loss)   2.40   (10.74)   (4.72)   0.62     (0.82)     0.33  
Dividends and distributions to Preferred Shareholders from:                  
    Net investment income   (0.03)   (0.31)   (0.62)   (0.46)     (0.26)     (0.16)  
    Net realized gain   —   —   —   (0.12)     (0.13)     (0.02)  
Net increase (decrease) from investment operations   3.46   (9.57)   (3.29)   2.09     0.90     2.37  
Dividends and distributions to Common Shareholders from:                  
    Net investment income   (0.95)   (0.83)   (1.59)   (1.58)     (1.74)     (2.00)  
    Net realized gain   —   —   (0.02)   (0.42)     (0.61)     (0.07)  
    Tax return of capital   (0.23)   (0.30)   (0.15)   —     —     —  
Total dividends and distributions   (1.18)   (1.13)   (1.76)   (2.00)     (2.35)     (2.07)  
Net asset value, end of period   $ 11.05   $ 8.77   $ 19.47   $ 24.52   $ 24.43   $ 25.88  
Market price, end of period   $ 9.94   $ 8.51   $ 17.31   $ 26.31   $ 24.20   $ 25.39  
      Total Investment Return 2                  
Based on net asset value   47.16%   (51.22)% 3   (13.86)%   8.89%     3.81%     10.15%  
Based on market price   36.42%   (46.76)% 3   (28.62)%   17.98%     4.83%     11.01%  
      Ratios to Average Net Assets Applicable to Common Shareholders                  
Total expenses 4   1.66%   1.96% 5   1.46%   1.62%     1.51%     1.44%  
Total expenses after fees waived and paid indirectly 4   1.64%   1.96% 5   1.45%   1.62%     1.51%     1.44%  
Total expenses after fees waived and paid indirectly and excluding                  
    interest expense 4   1.39%   1.39% 5   1.24%   1.25%     1.22%     1.19%  
Net investment income 4   13.08%   10.53% 5   8.90%   8.46%     8.37%     8.66%  
Dividends paid to Preferred Shareholders   0.38%   2.19% 5   2.70%   1.89%     1.27%     0.62%  
Net investment income to Common Shareholders   12.70%   8.34% 5   6.20%   6.58%     7.10%     8.04%  
      Supplemental Data                  
Net assets applicable to Common Shareholders, end of period (000)   $ 204,133   $ 161,311   $ 358,017   $ 449,995   $ 447,190   $ 473,809  
Preferred Shares outstanding at $25,000 liquidation preference,                  
    end of period (000)   $ 70,425   $ 110,400   $ 220,800   $ 220,800   $ 220,800   $ 220,800  
Borrowings outstanding, end of period (000)   $ 13,235   $ 44,281   —   —     —     —  
Average borrowings outstanding, during the period (000)   $ 16,330   $ 51,995   $ 903   $ 1,303   $ 2,904   $ 782  
Portfolio turnover   16%   121%   97%   91%     77%     88%  
Asset coverage per Preferred Share at $25,000 liquidation preference,                  
    end of period   $ 97,465   $ 61,540   $ 65,554   $ 75,965   $ 75,642   $ 78,650  
      1 Based on average shares outstanding.                  
      2 Total investment returns based on market value, 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.          
      3 Aggregate total investment return.                  
      4 Do not reflect the effect of dividends to Preferred Shareholders.                  
      5 Annualized.                  
See Notes to Financial Statements.                  
                                                          ANNUAL REPORT       OCTOBER 31, 2009       43  

Financial Highlights   BlackRock Credit Allocation Income Trust IV (BTZ)  
        Period  
        December 27,  
        2006 1 to  
    Year Ended October 31,   October 31,  
                                  2009             2008             2007  
      Per Share Operating Performance        
Net asset value, beginning of period   $ 10.59   $ 21.39   $ 23.88 2  
Net investment income     0.99 3   1.33 3   1.25  
Net realized and unrealized gain (loss)   2.54   (10.06)   (1.86)  
Dividends to Preferred Shareholders from net investment income   (0.07)   (0.33)   (0.31)  
Net increase (decrease) from investment operations   3.46   (9.06)   (0.92)  
Dividends and distributions to Common Shareholders from:        
    Net investment income     (0.93)   (0.90)   (0.93)  
    Tax return of capital     (0.48)   (0.84)   (0.47)  
Total dividends and distributions   (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     $ 12.64   $ 10.59   $ 21.39  
Market price, end of period     $ 10.96   $ 9.36   $ 18.65  
      Total Investment Return 4          
Based on net asset value     41.06%   (44.27)%   (4.42)% 5  
Based on market price     38.38%   (43.51)%   (20.34)% 5  
      Ratios to Average Net Assets Applicable to Common Shareholders        
Total expenses 6     1.60%   1.65%   1.90% 7  
Total expenses after fees waived and paid indirectly 6   1.58%   1.65%   1.88% 7  
Total expenses after fees waived and paid indirectly and excluding interest expense 6   1.24%   1.21%   1.04% 7  
Net investment income 6     9.93%   7.63%   6.50% 7  
Dividends to Preferred Shareholders   0.74%   1.89%   1.64% 7  
Net investment income to Common Shareholders   9.19%   5.74%   4.86% 7  
      Supplemental Data          
Net assets applicable to Common Shareholders, end of period (000)   $ 654,999   $ 548,612   $ 1,108,534  
Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)   $ 231,000   $ 231,000   $ 462,000  
Borrowings outstanding, end of period (000)   $ 61,576   $ 223,512   $ 88,291  
Average borrowings outstanding, during the period (000)   $ 76,521   $ 107,377   $ 96,468  
Portfolio turnover     30%   126%   35%  
Asset coverage per Preferred Share at $25,000 liquidation preference, end of period   $ 95,892   $ 84,384   $ 89,737  
      1 Commencement of operations. This information includes the initial investment by BlackRock Funding, Inc.        
      2 Net asset value, beginning of period, reflects a deduction of $1.12 per share sales charge from initial offering price of $25.00 per share.      
      3 Based on average shares outstanding.        
      4 Total investment returns based on market value, 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.      
      5 Aggregate total investment return.        
      6 Do not reflect the effect of dividends to Preferred Shareholders.        
      7 Annualized.          
See Notes to Financial Statements.        
44   ANNUAL REPORT   OCTOBER 31, 2009      

Financial Highlights     BlackRock Enhanced Capital and Income Fund, Inc. (CII)  
    Period             Period  
  Year   January 1,             April 30,  
  Ended   2008 to             2004 1 to  
      Year Ended December 31,        
  October 31,   October 31,           December 31,  
  2009   2008   2007   2006     2005     2004  
      Per Share Operating Performance                  
Net asset value, beginning of period   $ 13.78   $ 21.36   $ 22.91   $ 20.31   $ 20.76   $ 19.10 2  
Net investment income   0.29 3   0.23 3   0.31 3   0.37 3     0.46 3     0.46  
Net realized and unrealized gain (loss)   2.27   (6.36)   0.58   3.69     0.29     1.84  
Net increase (decrease) from investment operations   2.56   (6.13)   0.89   4.06     0.75     2.30  
Dividends and distributions from:                  
    Net investment income   (0.29)   (0.23)   (0.34)   (0.33)     (0.47)     (0.48)  
    Net realized gain   (1.19)   (0.62)   (2.10)   (1.13)     (0.73)     (0.11)  
    Tax return of capital   (0.46)   (0.60)   —   —     —     (0.01)  
Total dividends and distributions   (1.94)   (1.45)   (2.44)   (1.46)     (1.20)     (0.60)  
Capital charges with respect to the issuance of shares   —   —   —   —     —     (0.04)  
Net asset value, end of period   $ 14.40   $ 13.78   $ 21.36   $ 22.91   $ 20.31   $ 20.76  
Market price, end of period   $ 13.76   $ 12.37   $ 20.06   $ 20.41   $ 17.21   $ 18.32  
      Total Investment Return 4                  
Based on net asset value   22.01%   (29.46)% 5   4.79%   21.70%     4.69%     12.30% 5  
Based on market price   29.88%   (32.58)% 5   10.47%   27.95%     0.52%     (5.36)% 5  
      Ratios to Average Net Assets                  
Total expenses   0.95%   1.10% 6   1.96%   3.54%     2.96%     2.19% 6  
Total expenses after fees waived and paid indirectly   0.95%   1.10% 6   1.96%   3.54%     2.96%     1.96% 6  
Total expenses after fees waived and paid indirectly                  
    and excluding interest expense   0.95%   1.01% 6   1.19%   1.42%     1.47%     1.20% 6  
Net investment income   2.16%   1.46% 6   1.36%   1.75%     2.28%     3.52% 6  
      Supplemental Data                  
Net assets, end of period (000)   $ 618,462   $ 167,996   $ 260,385   $ 279,272   $ 260,638   $ 266,345  
Borrowings outstanding, end of period (000)   —   —   —   $ 100,000   $ 109,000   $ 109,000  
Average borrowings outstanding, during the period (000)   —   —   $ 38,788   $ 107,504   $ 109,000   $ 98,750  
Portfolio turnover   138%   45%   63%   38%     61%     20%  
Asset coverage, end of period per $1,000   —   —   —   $ 3,793   $ 3,391   $ 3,444  
      1 Commencement of operations. This information includes the initial investment by BlackRock Investment Managers, LLC.            
      2 Net asset value, beginning of period, reflects a deduction of $0.90 per share sales charge from initial offering price of $20.00 per share.          
      3 Based on average shares outstanding.                  
      4 Total investment returns based on market value, 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.          
      5 Aggregate total investment return.                  
      6 Annualized.                  
See Notes to Financial Statements.                  
                                                          ANNUAL REPORT       OCTOBER 31, 2009       45  

Financial Highlights       BlackRock Floating Rate Income Trust (BGT)  
      Period             Period  
    Year   January 1,           August 30,  
    Ended   2008 to             2004 1 to  
        Year Ended December 31,        
    October 31,   October 31,           December 31,  
    2009   2008   2007   2006     2005     2004  
      Per Share Operating Performance                  
Net asset value, beginning of period   $ 11.24   $ 17.71   $ 19.11   $ 19.13   $ 19.21   $ 19.10 2  
Net investment income     0.98 3   1.42 3   2.03   1.99     1.64     0.33  
Net realized and unrealized gain (loss)   2.72   (6.62)   (1.39)   (0.06)     (0.17)     0.35  
Dividends and distributions to Preferred Shareholders from:                  
    Net investment income     (0.04)   (0.24)   (0.54)   (0.48)     (0.33)     (0.04)  
    Net realized gain     —   —   —   (0.01)     (0.00) 4     —  
Net increase (decrease) from investment operations   3.66   (5.44)   0.10   1.44     1.14     0.64  
Dividends and distributions to Common Shareholders from:                  
    Net investment income     (1.19)   (1.03)   (1.14)   (1.44)     (1.22)     (0.37)  
    Net realized gain     —   —   —   (0.02)     (0.00) 4     —  
    Tax return of capital     (0.42)   —   (0.36)   —     —     —  
Total dividends and distributions   (1.61)   (1.03)   (1.50)   (1.46)     (1.22)     (0.37)  
Capital charges with respect to issuance of:                  
    Common Shares     —   —   —   —     —     (0.04)  
    Preferred Shares     —   —   —   —     —     (0.12)  
Total capital charges     —   —   —   —     —     (0.16)  
Net asset value, end of period     $ 13.29   $ 11.24   $ 17.71   $ 19.11   $ 19.13   $ 19.21  
Market price, end of period     $ 12.58   $ 9.63   $ 15.78   $ 19.27   $ 17.16   $ 18.63  
      Total Investment Return 5                    
Based on net asset value     39.51%   (31.62)% 6   0.98%   7.93%     6.63%     2.57% 6  
Based on market price     54.14%   (34.24)% 6   (10.92)%   21.31%     (1.34)%     (5.00)% 6  
      Ratios to Average Net Assets Applicable to Common Shareholders                  
Total expenses 7     1.96%   2.22% 8   1.67%   1.75%     1.56%     1.26% 8  
Total expenses after fees waived and paid indirectly 7   1.68%   1.89% 8   1.33%   1.43%     1.23%     0.97% 8  
Total expenses after fees waived and paid indirectly and excluding                  
    interest expense 7     1.24%   1.21% 8   1.16%   1.19%     1.15%     0.97% 8  
Net investment income 7     8.92%   10.56% 8   10.83%   10.38%     8.52%     5.04% 8  
Dividends to Preferred Shareholders   0.38%   1.75% 8   2.88%   2.51%     1.71%     0.62% 8  
Net investment income to Common Shareholders   8.54%   8.81% 8   7.95%   7.87%     6.81%     4.42% 8  
      Supplemental Data                    
Net assets applicable to Common Shareholders, end of period (000)   $ 312,872   $ 264,590   $ 417,086   $ 449,065   $ 449,219   $ 451,126  
Preferred Shares outstanding at $25,000 liquidation preference,                  
    end of period (000)     $ 58,800   $ 58,800   $ 243,450   $ 243,450   $ 243,450   $ 243,450  
Borrowings outstanding, end of period (000)   $ 14,000   $ 123,150   —   $ 26,108     —     —  
Average borrowings outstanding during the period (000)   $ 53,156   $ 71,780   $ 10,524   $ 19,562   $ 10,722   $ 114  
Portfolio turnover     42%   25%   41%   50%     46%     11%  
Asset coverage per Preferred Share at $25,000 liquidation preference,                  
    end of period     $ 158,029   $ 137,505   $ 67,849   $ 73,810   $ 71,139   $ 71,330  
      1 Commencement of operations. This information includes the initial investment by BlackRock Funding, Inc.              
      2 Net asset value, beginning of period, reflects a deduction of $0.90 per share sales charge from initial offering price of $20.00 per share.          
      3 Based on average shares outstanding.                  
      4 Amount is less than $(0.01) per share.                  
      5 Total investment returns based on market value, 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.          
      6 Aggregate total investment return.                  
      7 Do not reflect the effect of dividends to Preferred Shareholders.                  
      8 Annualized.                    
See Notes to Financial Statements.                  
46   ANNUAL REPORT       OCTOBER 31, 2009          

Notes to Financial Statements

1. Organization and Significant Accounting Policies:

BlackRock Credit Allocation Income Trust I, Inc. (formerly BlackRock
Preferred and Corporate Income Strategies Fund, Inc.) (“PSW”), BlackRock
Credit Allocation Income Trust II, Inc. (formerly BlackRock Preferred Income
Strategies Fund, Inc.) (“PSY”) and BlackRock Enhanced Capital and
Income Fund, Inc. (“CII”) are registered as diversified, closed-end manage-
ment investment companies under the Investment Company Act of 1940,
as amended (the “1940 Act”). BlackRock Credit Allocation Income Trust III
(formerly BlackRock Preferred Opportunity Trust) (“BPP”), BlackRock Credit
Allocation Income Trust IV (formerly BlackRock Preferred and Equity
Advantage Trust) (“BTZ”) and BlackRock Floating Rate Income Trust (for-
merly BlackRock Global Floating Rate Income Trust) (“BGT”) are registered
as non-diversified, closed-end management investment companies under
the 1940 Act. PSW, PSY and CII are organized as Maryland corporations.
BPP, BTZ and BGT are organized as Delaware statutory trusts. PSW, PSY,
BPP, BTZ, CII and BGT are collectively referred to as the “Funds” or individu-
ally as the “Fund.” The Funds’ financial statements are prepared in con-
formity with accounting principles generally accepted in the United States
of America, which may require the use of management accruals and esti-
mates. Actual results may differ from these estimates. The Board of Directors
and Board of Trustees of the Funds, as applicable, are referred to throughout
this report as the “Board of Directors” or the “Board.” The Funds determine
and make available for publication the net asset value of their Common
Shares on a daily basis.

CII Reorganization: The Board and the shareholders of each of BlackRock
Enhanced Equity Yield Fund, Inc. (“EEF”), BlackRock Enhanced Equity Yield
and Premium Fund, Inc. (“ECV”) (the “Target Funds”) and CII approved the
reorganization of each Target Fund into CII (the “Reorganizations”). The Reor-
ganizations were tax-free events and were effective as of the opening for
business of the New York Stock Exchange (“NYSE”) on November 3, 2008.

Target Funds         Acquiring Fund  
EEF         CII  
ECV         CII  
Under the agreement and plan of reorganization between each Target  
Fund and CII, the shares of each Target Fund (“Target Fund Shares”) were  
exchanged for CII shares. The conversion ratios for Target Fund Shares  
were as follows:          
EEF/CII         0.80653563  
ECV/CII         0.81144752  
The net assets of CII before and after the Reorganizations and CII shares  
issued and Target Fund Shares redeemed in connection with the Reorgani-  
zations were as follows:        
  Net Assets   Net Assets     Target Funds  
Acquiring   After the   Prior to the     Shares  
Fund   Reorganizations   Reorganizations   Shares Issued   Redeemed  
CII   $591,399,963   $170,431,810   30,542,706   37,766,622  

Included in the net assets acquired by CII were the following components:  
Target   Paid-In   Realized   Net Unrealized    
Funds   Capital   Loss   Depreciation   Net Assets  
EEF   $329,483,362   $(16,478,636)   $(80,066,510)   $232,938,216  
ECV   $270,207,354   $(15,306,983)   $(66,870,434)   $188,029,937  
The following is a summary of significant accounting policies followed by  
the Funds:          

Valuation: The Funds value their bond investments on the basis of last avail-
able bid prices or current market quotations provided by dealers or pricing
services selected under the supervision of each Fund’s Board. 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 informa-
tion with respect to transactions in such investments, quotations from deal-
ers, pricing matrixes, market transactions in comparable investments, various
relationships observed in the market between investments and calculated
yield measures based on valuation technology commonly employed in the
market for such investments. Swap agreements are valued utilizing quotes
received daily by the Funds’ pricing service or through brokers, which are
derived using daily swap curves and trades of underlying securities. Invest-
ments in open-end investment companies are valued at net asset value
each business day. Short-term securities with maturities less than 60 days
may be valued at amortized cost, which approximates fair value. The Funds
value their investments in the Cash Sweep Series of BlackRock Liquidity
Series, LLC at fair value, which is ordinarily based upon their pro rata own-
ership in the net assets of the underlying fund.

Securities and other assets and liabilities denominated in foreign curren-
cies are translated into U.S. dollars using exchange rates determined as
of the close of business on the NYSE. Foreign currency exchange contracts
are valued at the mid 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 quo-
tations are not available.

Equity investments traded on a recognized securities exchange or the
NASDAQ Global Market System 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.

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
such prior day’s price no longer reflects the fair value of the option. Over-
the-counter (“OTC”) options are valued by an independent pricing service
or through brokers using a mathematical model which incorporates a

ANNUAL REPORT OCTOBER 31, 2009 47

Notes to Financial Statements (continued)

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 is not available, the investment will be
valued by a method approved by the Board as reflecting fair value (“Fair
Value Assets”). When determining the price for Fair Value Assets, the invest-
ment advisor and/or 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 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. The values
of such instruments used in computing the net assets of each Fund are
determined as of such times. Occasionally, events affecting the values of
such instruments may occur between the times at which they are deter-
mined 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 com-
pany announcement, market volatility or a natural disaster) occur during
such periods that are expected to materially affect the value of such instru-
ments, those instruments may be Fair Value Assets and be valued at their
fair value as determined in good faith by the Board or by the investment
advisor using a pricing service and/or procedures approved by the Board.

Foreign Currency Transactions: Foreign currency amounts are translated
into United States dollars on the following basis: (i) market value of invest-
ment securities, assets and liabilities at the current rate of exchange; and
(ii) purchases and sales of investment securities, income and expenses at
the rates of exchange prevailing on the respective dates of such transactions.

The Funds report foreign currency related transactions as components of
realized gain (loss) for financial reporting purposes, whereas such compo-
nents are treated as ordinary income for federal income tax purposes.

Capital Trusts and Trust Preferreds: 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 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 can have a rating that is
slightly below that of the issuing company’s senior debt securities.

Preferred Stock: Certain 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 convert-
ible preferred stock generally also reflects some element of conversion
value. Because preferred stock is junior to debt securities and other obli-
gations 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: Certain Funds may invest in floating rate
loans, which are generally non-investment grade, made by banks, other
financial institutions, and privately and publicly offered corporations.
Floating rate loans are senior in the debt structure of a corporation.
Floating rate loans 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 (i) the lending rate offered by one or
more European banks, such as LIBOR (London InterBank Offered Rate),
(ii) the prime rate offered by one or more US banks or (iii) the certificate
of deposit rate. The Funds consider these investments to be investments
in debt securities for purposes of their investment policies.

The Funds earn and/or pay facility and other fees on floating rate loans.
Other fees earned/paid include commitment, amendment, consent and
prepayment penalty fees. Facility, commitment and amendment fees are
typically amortized over the term of the loan. Consent fees and various
other fees are recorded as income. Prepayment penalty fees are recorded
as realized gains. When a Fund buys a floating rate loan it may receive a
facility fee and when it sells a floating rate loan 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 portion of a floating rate
loan. In certain circumstances, the Funds may receive a prepayment
penalty fee upon the prepayment of a floating rate loan by a borrower.
Other fees received by the Funds may include covenant waiver fees and
covenant modification fees.

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 loans are usually freely callable at the issuer’s option. The
Funds may invest in such loans in the form of participations in loans
(“Participations”) and 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

48 ANNUAL REPORT OCTOBER 31, 2009

Notes to Financial Statements (continued)

agreement relating to the loans, 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’ investments in loan
participation interests involve the risk of insolvency of the financial interme-
diaries who are parties to the transactions. In the event of the insolvency of
the lender selling the Participation, the Funds may be treated as a general
creditor of the lender and may not benefit from any offset between the
lender and the borrower.

Reverse Repurchase Agreements: Certain 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 bro-
ker-dealer and agree to repurchase the securities at a mutually agreed
upon date and price. Interest on the value of the reverse repurchase agree-
ments issued and outstanding is based upon competitive market rates
determined at the time of issuance. The Funds may utilize reverse repur-
chase 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 agree-
ments involve leverage risk and also the risk that the market value of
the securities that the Funds are obligated to repurchase under the agree-
ment 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 from 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.

Defensive Positions: Each of PSW, PSY, BPP and BTZ may vary its invest-
ment policies for temporary defensive purposes during periods in which
the investment advisor believes that conditions in the securities markets or
other economic, financial or political conditions warrant. Under such condi-
tions, the Funds for temporary defensive purposes may invest up to 100%
of its total assets in, as applicable and described in each Fund’s prospec-
tus, U.S. government securities, certificates of deposit, repurchase agree-
ments that involve purchases of debt securities, bankers’ acceptances and
other bank obligations, commercial paper, money market funds and/or
other debt securities deemed by the investment advisor to be consistent
with a defensive posture, or may hold its assets in cash.

Zero-Coupon Bonds: Certain 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.

Segregation and Collateralization: In cases in which the 1940 Act and
the interpretive positions of the Securities and Exchange Commission
(“SEC”) require that a Fund either deliver collateral or segregate assets in
connection with certain investments (e.g., written options, foreign currency
exchange contracts, financial futures contracts and swaps), or certain bor-
rowings (e.g., reverse repurchase agreements and loan payable) each Fund

will, consistent with SEC rules and/or certain interpretive letters issued by
the SEC, segregate collateral or designate on its books and records cash or
other 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 has requirements to deliver/deposit secu-
rities as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting
purposes, investment transactions are recorded on the dates the trans-
actions are entered into (the trade dates). Realized gains and losses on
investment transactions are determined on the identified cost basis. Divi-
dend 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 have determined the ex-dividend date. Interest
income is recognized on the accrual basis. The Funds amortize all premiums
and discounts on debt securities. 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. Consent fees are compensation for agreeing to changes in
the terms of debt instruments and are included in interest income in the
Statements of Operations.

Dividends and Distributions: Dividends from net investment income are
declared and paid monthly (quarterly for CII). Distributions of capital gains
are recorded on the ex-dividend dates. If the total dividends and distribu-
tions made in any tax year exceeds net investment income and accumu-
lated realized capital gains, a portion of the total distribution may be
treated as a tax return of capital.

Income Taxes: It is each Fund’s policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies
and to distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Under the applicable
foreign tax laws, a withholding tax may be imposed on interest, dividends
and capital gains at various rates.

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 PSW’s and PSY’s US federal tax returns remains open for the four years
ended October 31, 2009. The statute of limitations on BPP’s, CII’s and BGT’s
US federal tax returns remains open for the two years ended December 31,
2007, the period ended October 31, 2008 and year ended October 31,
2009. The statute of limitations on BTZ’s US Federal tax returns remains
open for the two years ended October 31, 2009 and the period ended
October 31, 2007. The statutes of limitations on the Funds’ state and
local tax returns may remain open for an additional year depending upon
the jurisdiction.

Recent Accounting Standards: In June 2009, amended guidance was
issued by the Financial Accounting Standards Board for transfers of finan-
cial assets. This guidance is intended to improve the relevance, representa-
tional faithfulness and comparability of the information that a reporting

ANNUAL REPORT OCTOBER 31, 2009 49

Notes to Financial Statements (continued)

entity provides in its financial statements about a transfer of financial
assets; the effects of a transfer on its financial position, financial perform-
ance, and cash flows; and a transferor’s continuing involvement, if any, in
transferred financial assets. The amended guidance is effective for financial
statements for fiscal years and interim periods beginning after November 15,
2009. Earlier application is prohibited. The recognition and measurement
provisions of this guidance must be applied to transfers occurring on or
after the effective date. Additionally, the enhanced disclosure provisions of
the amended guidance should be applied to transfers that occurred both
before and after the effective date of this guidance. The impact of this
guidance on the Funds’ financial statements and disclosures, if any, is
currently being assessed.

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

The deferred compensation plan is not funded and obligations there-
under represent general unsecured claims against the general assets of
each Fund. Each Fund may, however, elect to invest in common shares of
other certain BlackRock Closed-End Funds selected by the Independent
Directors or Trustees in order to match its deferred compensation obliga-
tions. Investments to cover each Fund’s deferred compensation liability,
if any, are included in other assets in the Statements of Assets and
Liabilities. Dividends and distributions from the BlackRock Closed-End
Fund investments under the plan 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.
Pursuant to the terms of the custody agreement, custodian fees may be
reduced by amounts calculated on uninvested cash balances, which are
shown in the Statements of Operations as fees paid indirectly.

2. Derivative Financial Instruments:

The Funds may engage in various portfolio investment strategies both to
increase the returns of the Funds and to economically hedge, or protect,
their exposure to certain risks such as credit risk, equity risk, interest rate
risk and foreign currency exchange rate risk. Losses may arise if the value
of the contract decreases due to an unfavorable change in the price of
the underlying security or if the counterparty does not perform under the
contract. The Funds may mitigate counterparty risk through master net-
ting agreements included within an International Swaps and Derivatives
Association, Inc. (“ISDA”) Master Agreement between a Fund and each
of its counterparties. The ISDA Master Agreement allows each Fund to
offset with its counterparty certain derivative financial instruments’ pay-
ables and/or receivables with collateral held with each counterparty. The

amount of collateral moved to/from applicable counterparties is 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 con-
tractually or otherwise, the Funds bear the risk of loss from counterparty
non-performance. See Note 1 “Segregation and Collateralization” for addi-
tional information with respect to collateral practices.

The Funds’ maximum risk of loss from counterparty credit risk on over-
the-counter derivatives is generally the aggregate unrealized gain in excess
of any collateral pledged by the counterparty to the Funds. For over-the-
counter purchased options, the Funds bear the risk of loss in the amount
of the premiums paid and change in market value of the options should
the counterparty not perform under the contracts. Options written by the
Funds do not give rise to counterparty credit risk, as written options obli-
gate the Funds to perform and not the counterparty. Certain ISDA Master
Agreements allow counterparties to over-the-counter derivatives to termi-
nate derivative contracts prior to maturity in the event a Fund’s net assets
decline by a stated percentage or a Fund fails to meet the terms of its
ISDA Master Agreements, which would cause the Fund to accelerate pay-
ment of any net liability owed to the counterparty. Counterparty risk related
to exchange-traded financial futures contracts and options is minimal
because of the protection against defaults provided by the exchange on
which they trade.

Financial Futures Contracts: Certain Funds may purchase or sell financial
futures contracts and options on financial futures contracts to gain expo-
sure to, or economically hedge against, changes in the value of interest
rates (interest rate risk) or foreign currencies (foreign currency exchange
rate risk). Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield. 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 margin variation and are recognized by
the Funds as unrealized gains or losses. 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: Certain Funds may enter into foreign
currency exchange contracts as an economic hedge against either specific
transactions or portfolio positions (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 a Fund, help to manage the
overall exposure to the currency backing some of the investments held by
a Fund. The contract is marked-to-market daily and the change in market
value is recorded by a Fund as an unrealized gain or loss. When the con-
tract is closed, a Fund records a realized gain or loss equal to the differ-
ence 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 counterparties may not meet the terms of the agreement or
unfavorable movements in the value of a foreign currency relative to the
US dollar.

50 ANNUAL REPORT OCTOBER 31, 2009

Notes to Financial Statements (continued)

Options: Certain Funds may purchase and write call and put options to
increase or decrease their exposure to underlying instruments. A call option
gives the purchaser of the option the right (but not the obligation) to buy,
and obligates the seller to sell (when the option is exercised), the underly-
ing instrument at the exercise price at any time or at a specified time dur-
ing 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 price
at any time or at a specified time during the option period. When a Fund
purchases (writes) an option, an amount equal to the premium paid
(received) by a Fund 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 instru-
ment acquired or deducted from (or added to) the proceeds of the instru-
ment sold. When an option expires (or a Fund enters into a closing
transaction), a Fund realizes a gain or loss on the option to the extent of
the premiums received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium received or paid). When a Fund
writes a call option, such option is “covered,” meaning that a Fund holds
the underlying instrument subject to being called by the option counter-
party, or cash in an amount sufficient to cover the obligation. When a Fund
writes a put option, such option is covered by cash in an amount sufficient
to cover the obligation.

In purchasing and writing options, a Fund bears the risk of an unfavorable
change in the value of the underlying instrument or the risk that a Fund
may not be able to enter into a closing transaction due to an illiquid mar-
ket. Exercise of a written option could result in a Fund purchasing or selling
a security at a price different from the current market value. The Funds may
execute transactions in both listed and OTC options.

Swaps: Certain Funds may enter into swap agreements, in which a Fund
and a counterparty agree to make periodic net payments on a specified
notional amount. These periodic payments received or made by the Funds
are recorded in the Statements of Operations as realized gains or losses,
respectively. Swaps are marked-to-market daily and changes in value are
recorded as unrealized appreciation (depreciation). When the swap is ter-
minated, the Fund will record a realized gain or loss equal to the difference
between the proceeds from (or cost of) the closing transaction and the
Fund’s basis in the contract, if any. 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 agree-
ments, 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 — Certain Funds may enter into credit default
swaps to manage its exposure to the market or certain sectors of the
market, to reduce their 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 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) or
traded indexes. Credit default swaps on single-name issuers are agree-
ments in which the buyer pays fixed periodic payments to the seller in
consideration for a guarantee from the seller to make a specific pay-
ment should a negative credit event take place (e.g., bankruptcy, failure
to pay, obligation accelerators, repudiation, moratorium or restructur-
ing). 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 of an 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 securi-
ties comprising of an 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 secu-
rity or underlying securities comprising of an index or pay a net settle-
ment of cash equal to the notional amount of the swap less the recovery
value of the security or underlying securities comprising of an index.

• Interest rate swaps — Certain Funds may enter into interest rate swaps
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 floating rate of interest on a notional princi-
pal amount and receives a fixed rate of interest on the same notional
principal amount for a specified period of time. In more complex swaps,
the notional principal amount may decline (or amortize) over time.

Derivatives Categorized by Risk Exposure:                
Values of Derivative Instruments as of October 31, 2009*
Asset Derivatives
  Statements of Assets              
  and Liabilities Location   PSW     PSY   BPP   BTZ   BGT  
Interest rate contracts**   Net unrealized appreciation/depreciation   $ 94,972   $ 34,845   $ 19,513   $ 982,873   —  
Credit contracts   Unrealized appreciation on swaps   —     —   —   —   $ 4,930  
Equity contracts   Investments at value — unaffiliated   —     —   —   —   6,110  
Total     $ 94,972   $ 34,845   $ 19,513   $ 982,873   $ 11,040  

ANNUAL REPORT OCTOBER 31, 2009 51

Notes to Financial Statements (continued)                  
Derivatives Categorized by Risk Exposure (concluded):                      
Liability Derivatives
    Statements of Assets                      
    and Liabilities Location       PSW     PSY     BPP   BTZ   CII   BGT  
Foreign currency exchange contracts   Unrealized depreciation on foreign                      
    currency exchange contracts       —     —     —   —   —   $ 650,963  
Credit contracts   Unrealized depreciation on swaps     $ 168,952     $ 337,904   $ 168,952   $ 675,809   —   453,976  
Equity contracts**   Net unrealized appreciation/depreciation/                    
    Options written — at value       —     —     —   311,644   $6,377,146   —  
Total         $ 168,952     $ 337,904   $ 168,952   $ 987,453   $6,377,146   $1,104,939  
*   For open derivative instruments as of October 31, 2009, see the Schedules of Investments, which is also indicative of activity for the year ended October 31, 2009.  
    **   Includes cumulative appreciation/depreciation of the financial futures contracts as reported in Schedules of Investments. Only current day’s margin variation is reported within the  
  Statements of Assets and Liabilities.                        
The Effect of Derivative Instruments on the Statements of Operations
Year Ended October 31, 2009
Net Realized Gain (Loss) From
          PSW     PSY     BPP   BTZ   CII   BGT  
Interest rate contracts:                        
    Financial futures contracts     $ (3,986,014) $(23,855,057) $(11,138,251) $(22,441,107)   —   —  
    Swaps         1,958,406     13,723,072     6,758,008   17,501,084   —   —  
Foreign currency exchange contracts:                        
    Foreign currency exchange contracts         4,366     34,450     1,348   9,785   —   $ (2,429,013)  
Credit contracts:                        
    Swaps         246,932     1,208,482     464,385   1,004,951   —   (1,014,281)  
Equity contracts:                        
    Financial futures contracts         —     —     —   1,193,721   $ (617,742)   —  
    Options***         —     —     —   3,769,225   52,938,361   —  
Total       $ (1,776,310) $ (8,889,053) $ (3,914,510)   $ 1,037,659   $52,320,619   $ (3,443,294)  
Net Change in Unrealized Appreciation/Depreciation on
          PSW     PSY     BPP   BTZ   CII   BGT  
Interest rate contracts:                        
    Financial futures contracts     $ 584,149   $ 3,572,427   $ 1,716,894   $ 7,820,983   —   —  
    Swaps         248,398     (911,039)     (503,217)   (1,216,856)   —   —  
Foreign currency exchange contracts:                        
    Foreign currency exchange contracts         (4,287)     (32,964)     (1,062)   (7,689)   —   $ (6,893,115)  
Credit contracts:                        
    Swaps         (305,030)     (1,014,054)     (307,150)   (1,086,163)   —   371,495  
Equity contracts:                        
    Financial futures contracts         —     —     —   (875,340)   —   —  
    Options***         —     —     —   2,230,493   $ 5,758,405   (37,700)  
Total       $ 523,230   $ 1,614,370   $ 905,465   $ 6,865,428   $ 5,758,405   $ (6,559,320)  
  ***   Options purchased are included in the net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.    

3. Investment Advisory Agreement and Other Transactions
with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”) and Bank of America
Corporation (“BAC”) are the largest stockholders of BlackRock, Inc.
(“BlackRock”). BAC became a stockholder of BlackRock following its
acquisition of Merrill Lynch & Co., Inc. (“Merrill Lynch”) on January 1,
2009. Prior to that date, both PNC and Merrill Lynch were considered
affiliates of the Funds under the 1940 Act. Subsequent to the acquisition,
PNC remains an affiliate, but due to the restructuring of Merrill Lynch’s
ownership interest of BlackRock, BAC is not deemed to be an affiliate
under the 1940 Act.

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 the Funds. For such services,
each Fund pays the Manager a monthly fee at the following annual rates of
each Fund’s average daily (weekly for BPP, BTZ and BGT) net assets (includ-
ing any assets attributable to borrowings or the proceeds from the issuance
of Preferred Shares) minus the sum of liabilities (other than borrowings
representing financial leverage) as follows:

PSW   0.60%  
PSY   0.60%  
BPP   0.65%  
BTZ   0.65%  
CII   0.85%  
BGT   0.75%  

The Manager has 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 as follows: 0.20% for the first six years of the Fund’s operations
(through August 30, 2010), 0.10% in year seven (through August 30, 2011)
and 0.05% in year eight (through August 30, 2012). For the year ended
October 31, 2009, the Manager waived $706,594, which is included in
fees waived by advisor in the Statements of Operations.

52 ANNUAL REPORT OCTOBER 31, 2009

Notes to Financial Statements (continued)  
The Manager has voluntarily agreed to waive its advisory fees by the amount  
of investment advisory fees each Fund pays to the Manager indirectly through  
its investment in affiliated money market funds. These amounts are included  
in fees waived by advisor in the Statements of Operations as follows:  
PSW     $14,003  
PSY     $14,491  
BPP     $21,506  
BTZ     $95,646  
CII     $ 7,172  
BGT     $ 2,448  
The Manager has entered into a separate sub-advisory agreement with  
BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Manager,  
with respect to PSW, PSY, BPP, BTZ and BGT. BFM and BlackRock Invest-  
ment Management, LLC (“BIM”), an affiliate of the Manager, serve as sub-  
advisors for CII. The Manager pays the sub-advisors for services they pro-  
vide, a monthly fee that is a percentage of the investment advisory fees  
paid by each Fund to the Manager.      
For the year ended October 31, 2009, the Funds reimbursed the Manager for  
certain accounting services, which are included in accounting services in  
the Statements of Operations. The reimbursements were as follows:  
    Accounting  
    Services  
PSW     $ 1,913  
PSY     $ 8,364  
BPP     $ 4,214  
BTZ     $14,113  
CII     $11,054  
BGT     $ 6,510  
Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a wholly  
owned subsidiary of Merrill Lynch, for the period November 1, 2008 to  
December 31, 2008 (after which time Merrill Lynch was no longer consid-  
ered an affiliate), earned commissions on transactions of securities  
as follows:      
BTZ     $ 5,223  
CII     $ 31,748  
Certain officers and/or directors or trustees 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.  
4. Investments:      
Purchases and sales of investments, including paydowns, excluding short-  
term securities and US government securities, for the year ended October 31,  
2009 were as follows:      
  Purchases   Sales  
PSW   $ 32,909,061   $ 103,719,933  
PSY   $ 73,975,856   $ 375,248,172  
BPP   $ 34,574,885   $ 194,230,481  
BTZ   $ 186,459,982   $ 541,219,389  
CII   $ 747,473,597   $ 737,185,021  
BGT   $ 157,239,797   $ 250,200,520  
For the year ended October 31, 2009, purchases and sales of US govern-  
ment securities were as follows:      

    Purchases     Sales  
BTZ     $ 494,173   $ 482,813  
Transactions in options written for the year ended October 31, 2009 for  
BTZ and CII were as follows:            
                    BTZ     CII  
          Premiums       Premiums  
Call Options Written   Contracts   Received Contracts     Received  
Outstanding options written,            
    beginning of year   1,150   $ 4,556,037   1,225 $ 3,449,258  
Options written   14,750   32,565,145   696,648     122,618,221  
Options exercised   —   —   (247,949)     (19,106,119)  
Options expired   (1,905)   (4,347,543) (182,483)     (21,102,291)  
Options closed   (13,595)   (31,945,600) (150,354)     (76,665,610)  
Outstanding options written,            
end of year   400   $828,039   117,087     $9,193,459  
        CII  
          Premiums  
Put Options Written       Contracts     Received  
Outstanding options written, beginning of year     —     —  
Options written             1,350 $   80,744  
Options exercised       (1,350)     (80,744)  
Outstanding options written, end of year     —     —  
5. Commitments:            
BGT invests in floating rate loans. In connection with these investments,  
the Fund may, with its Manager, also enter into unfunded corporate loans  
(“commitments”). Commitments may obligate the Fund to furnish temporary  
financing to a borrower until permanent financing can be arranged. In con-  
nection with these commitments, the Fund earns a commitment fee, typi-  
cally set as a percentage of the commitment amount. Such fee income,  
which is classified in the Statements of Operations as facility and other  
fees, is recognized ratably over the commitment period. As of October 31,  
2009, the Fund had the following unfunded loan commitments:  
          Value of  
    Underlying     Underlying  
    Commitment     Loan  
    (000)     (000)  
Delphi Acquisition Holding IBV     $368     $306  
NVT Networks LLC Exit Term Loan     $ 50     $ 51  
Smurfit-Stone Container Enterprises, Inc.,          
    U.S. Term Loan Debtor in Possession   $910     $900  
6. Concentration, Market and Credit Risk:        
PSY, BPP and BTZ invest a significant portion of their assets in securities  
in the financials sector and BGT invests a significant portion of its assets  
in securities in the media sector. Please see the Schedules of Investments  
for these securities. Changes in economic conditions affecting the finan-  
cials and media sectors would have a greater impact on the respective  
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 (credit  
risk). The value of securities held by the Funds may decline in response to  

ANNUAL REPORT OCTOBER 31, 2009 53

Notes to Financial Statements (continued)

certain events, including those directly involving the issuers whose securi-
ties are owned by the Funds; conditions affecting the general economy;
overall market changes; local, regional or global political, social or eco-
nomic instability; and currency and interest rate and price fluctuations.
Similar to credit risk, the Funds may be exposed to counterparty risk, or
the risk that an entity with which the Funds have unsettled or open trans-
actions may default. Financial assets, which potentially expose the Funds
to credit and counterparty risks, consist principally of investments and cash
due from counterparties. The extent of the Funds’ exposure to credit and
counterparty risks with respect to those financial assets is approximated by
their value recorded in the Funds’ Statements of Assets and Liabilities, less
any collateral held by the Funds.

7. Capital Share Transactions:

PSW, PSY and CII are authorized to issue 200 million of $0.10 par value
shares, all of which initially were classified as Common Shares. The Boards
of PSW and PSY are authorized to classify and reclassify any unissued
shares. In this regard, the Boards of PSW and PSY have reclassified 5,460
and 22,000 shares, respectively, of unissued shares as Preferred Shares.
There are an unlimited number of $0.001 par value shares authorized for
BPP, BTZ and BGT.

Common Shares        
At October 31, 2009, the shares owned by an affiliate of the Manager of  
the Funds were as follows:        
      Shares  
PSW       7,656  
PSY       7,927  
BTZ       4,817  
CII       23,362  
BGT       8,239  
Shares issued and outstanding during the years ended October 31, 2009  
and October 31, 2008 for PSW and PSY and the year ended October 31,  
2009, the period January 1, 2008 to October 31, 2008 and the year ended  
December 31, 2007 for BPP, CII and BGT increased by the following  
amounts as a result of dividend reinvestment:      
  October 31,   October 31,   December 31,  
  2009   2008   2007  
PSW   20,060   —   N/A  
PSY   200,878   —   N/A  
BPP   76,154   5,794   30,981  
CII   221,870   —   —  
BGT   —   —   42,574  
Shares issued and outstanding remained constant for BTZ for the years  
ended October 31, 2009 and October 31, 2008.      

For the year ended October 31, 2009, shares issued and outstanding for
CII increased 30,542,706 as a result of a reorganization as discussed in
Note 1 “CII Reorganization”.

Preferred Shares

The Preferred Shares are redeemable at the option of each Fund, in whole
or in part, on any dividend payment date at $25,000 per share plus any
accumulated or unpaid dividends whether or not declared. The Preferred
Shares are also subject to mandatory redemption at their liquidation pref-

erence plus any accumulated or unpaid dividends, whether or not declared,
if certain requirements relating to the composition of the assets and liabili-
ties of the Fund, as set forth in the Fund’s Statement of Preferences/Articles
Supplementary (“Governing Instrument”), as applicable, are not satisfied.

From time to time in the future, the Funds that have issued Preferred
Shares may effect repurchases of such shares at prices below their liquida-
tion preferences as agreed upon by the Funds and seller. The Funds also
may redeem such shares from time to time as provided in the applicable
Governing Instrument. The Funds intend to effect such redemptions and/or
repurchases to the extent necessary to maintain applicable asset coverage
requirements or for such other reasons as the Board may determine.

The holders of Preferred Shares have voting rights equal to the holders of
Common Shares (one vote per share) and will vote together with holders
of Common Shares (one vote per share) as a single class. However, holders
of Preferred Shares, voting as a separate class, are also entitled to elect
two Directors/Trustees 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 subclassification as a closed-end investment com-
pany or change its fundamental investment restrictions or (c) change its
business so as to cease to be an investment company.

PSW, PSY, BPP, BTZ and BGT had the following series of Preferred Shares  
outstanding, effective yields and reset frequency as of October 31, 2009:  
        Reset  
    Preferred   Effective   Frequency  
  Series   Shares         Yield   Days  
PSW   M7   805         1.48%   7  
  T7   805         1.48%   7  
PSY   M7   861         1.48%   7  
  T7   861         1.48%   7  
  W7   861         1.47%   7  
  TH7   861         1.47%   7  
  F7   861         1.48%   7  
  W28   1,228         1.49%   28  
  TH28   1,228         1.49%   28  
BPP   T7   939         0.24%   7  
  W7   939         0.24%   7  
  R7   939         0.26%   7  
BTZ   T7   2,310         1.48%   7  
  W7   2,310         1.47%   7  
  R7   2,310         1.47%   7  
  F7   2,310         1.48%   7  
BGT   T7   784         1.48%   7  
  W7   784         1.47%   7  
  R7   784         1.47%   7  

Dividends on seven-day and 28-day Preferred Shares are cumulative at a
rate that is reset every seven or 28 days, respectively, based on the results
of an auction. If the Preferred Shares fail to clear the auction on an auction
date, the affected Fund is required to pay the maximum applicable rate on
the Preferred Shares to holders of such shares for successive dividend
periods until such time as the shares are successfully auctioned. The maxi-
mum applicable rate on Preferred Shares are as follows: for PSW, PSY and
BGT, the higher of 125% times or 1.25% plus the Telerate/BBA LIBOR rate;
for BPP 150% of the interest equivalent of the 30-day commercial paper
rate and for BTZ, the higher of 150% times or 1.25% plus the Telerate/BBA

54 ANNUAL REPORT OCTOBER 31, 2009

Notes to Financial Statements (continued)  
LIBOR rate. The low, high and average dividend rates for the year ended  
October 31, 2009, were as follows:        
  Series   Low   High   Average  
PSW   M7   1.48%   3.39%   1.62%  
  T7   1.48%   3.34%   1.63%  
PSY   M7   1.48%   3.39%   1.63%  
  T7   1.48%   3.34%   1.63%  
  W7   1.47%   3.27%   1.63%  
  TH7   1.47%   2.89%   1.62%  
  F7   1.48%   2.57%   1.62%  
  W28   1.49%   4.53%   1.70%  
  TH28   1.49%   5.76%   1.84%  
BPP   T7   0.23%   4.21%   0.64%  
  W7   0.24%   4.07%   0.60%  
  R7   0.20%   4.09%   0.59%  
BTZ   T7   1.48%   3.34%   1.63%  
  W7   1.47%   3.27%   1.66%  
  R7   1.47%   2.89%   1.65%  
  F7   1.48%   2.57%   1.64%  
BGT   T7   1.48%   3.34%   1.62%  
  W7   1.47%   3.27%   1.66%  
  R7   1.47%   2.89%   1.64%  

Since February 13, 2008, the Preferred Shares of the Funds failed to clear
any of their auctions. As a result, the Preferred Shares dividend rates were
reset to the maximum applicable rate, which ranged from 0.20% to 5.76%.
A failed auction is not an event of default for the Funds but it has a nega-
tive impact on the liquidity of Preferred Shares. A failed auction occurs
when there are more sellers of a fund’s auction rate preferred shares than
buyers. It is impossible to predict how long this imbalance will last. A suc-
cessful auction for the Funds’ Preferred Shares may not occur for some time,
if ever, and even if liquidity does resume, Preferred Shareholders may not
have the ability to sell the Preferred Shares at their liquidation preference.

The Funds may not declare dividends or make other distributions on
Common Shares or purchase any such shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to the
outstanding Preferred Shares is less than 200%.

Prior to December 22, 2008, the Funds paid commissions to certain
broker-dealers at the end of each auction at an annual rate of 0.25%,
calculated on the aggregate principal amount. On December 22, 2008,
commissions paid to broker-dealers on Preferred Shares that experience a
failed auction were reduced to 0.15% on the aggregate principal amount.
Subsequently, certain broker-dealers have individually agreed to further
reduce commissions for failed auctions. The Funds will continue to pay
commissions of 0.25% on the aggregate principal amount of all shares
that successfully clear their auctions. MLPF&S earned commissions for the
period November 1, 2008 to December 31, 2008 (after which time Merrill
Lynch was no longer considered an affiliate) as follows:

  Commissions  
PSW   $14,200  
PSY   $42,997  
BPP   $13,434  
BTZ   $41,221  
BGT   $ 683  
During the year ended October 31, 2009 the Funds announced the follow-  
ing redemptions, as of the date indicated, of Preferred Shares at a price of  
$25,000 per share plus any accrued and unpaid dividends through the  
redemption dates:    

March 26, 2009          
    Redemption   Shares   Aggregate  
  Series   Date   Redeemed   Principal  
PSY   M7   4/14/09   107   $2,675,000  
  T7   4/15/09   107   $2,675,000  
  W7   4/16/09   107   $2,675,000  
  TH7   4/13/09   107   $2,675,000  
  F7   4/13/09   107   $2,675,000  
  W28   5/07/09   153   $3,825,000  
  TH28   4/24/09   153   $3,825,000  
BPP   T7   4/15/09   267   $6,675,000  
  W7   4/16/09   267   $6,675,000  
  R7   4/17/09   267   $6,675,000  
February 24, 2009          
    Redemption   Shares   Aggregate  
  Series   Date   Redeemed   Principal  
PSW   M7   3/17/09   160   $ 4,000,000  
  T7   3/18/09   160   $ 4,000,000  
PSY   M7   3/17/09   203   $ 5,075,000  
  T7   3/18/09   203   $ 5,075,000  
  W7   3/19/09   203   $ 5,075,000  
  TH7   3/13/09   203   $ 5,075,000  
  F7   3/16/09   203   $ 5,075,000  
  W28   4/09/09   292   $ 7,300,000  
  TH28   3/27/09   292   $ 7,300,000  
November 25, 2008          
    Redemption   Shares   Aggregate  
  Series   Date   Redeemed   Principal  
PSW   M7   12/16/08   400   $10,000,000  
  T7   12/17/08   400   $10,000,000  
PSY   M7   12/16/08   229   $ 5,725,000  
  T7   12/17/08   229   $ 5,725,000  
  W7   12/18/08   229   $ 5,725,000  
  TH7   12/12/08   229   $ 5,725,000  
  F7   12/15/08   229   $ 5,725,000  
  W28   12/18/08   327   $ 8,175,000  
  TH28   1/02/09   327   $ 8,175,000  
BPP   T7   12/17/08   266   $ 6,650,000  
  W7   12/18/08   266   $ 6,650,000  
  R7   12/19/08   266   $ 6,650,000  
During the period ended October 31, 2008, the Funds announced the fol-  
lowing redemptions as of May 19, 2008 of Preferred Shares at a price of  
$25,000 per share plus any accrued and unpaid dividends through the  
redemption date:          
    Redemption   Shares   Aggregate  
  Series   Date   Redeemed   Principal  
PSW   M7   6/10/2008   1,365   $34,125,000  
  T7   6/11/2008   1,365   $34,125,000  
PSY   M7   6/10/2008   1,400   $35,000,000  
  T7   6/11/2008   1,400   $35,000,000  
  W7   6/05/2008   1,400   $35,000,000  
  TH7   6/06/2008   1,400   $35,000,000  
  F7   6/09/2008   1,400   $35,000,000  
  W28   6/05/2008   2,000   $50,000,000  
  TH28   6/20/2008   2,000   $50,000,000  
BPP   T7   6/11/2008   1,472   $36,800,000  
  W7   6/12/2008   1,472   $36,800,000  
  R7   6/13/2008   1,472   $36,800,000  
BTZ   T7   6/11/2008   2,310   $57,750,000  
  W7   6/12/2008   2,310   $57,750,000  
  R7   6/13/2008   2,310   $57,750,000  
  F7   6/09/2008   2,310   $57,750,000  
BGT   T7   6/11/2008   2,462   $61,550,000  
  W7   6/12/2008   2,462   $61,550,000  
  R7   6/13/2008   2,462   $61,550,000  

ANNUAL REPORT OCTOBER 31, 2009 55

Notes to Financial Statements (continued)

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

Preferred Shares issued and outstanding for the year ended December 31,
2007 for BGT and BPP remained constant.

8. Borrowings:

On May 16, 2008, BGT renewed its revolving credit and security Agreement
(“Citicorp Agreement”) pursuant to a commercial paper asset securitization
program with Citicorp North America, Inc. (“Citicorp”), as Agent, certain sec
ondary backstop lenders and certain asset securitization conduits, as
lenders (the “Lenders”). The agreement was renewed for one year and at
the time of renewal had a maximum limit of $190 million.

Under the Citicorp Agreement, the conduits funded advances to the Fund
through the issuance of highly rated commercial paper. The Fund had
granted a security interest in substantially all of its assets to, and in favor
of, the Lenders as security for its obligations to the Lenders. The interest
rate on the Fund’s borrowings was based on the interest rate carried by
commercial paper plus a program fee. Effective December 5, 2008, the
Fund renegotiated certain terms of the Citicorp Agreement and reduced
the commitment amount to $134 million.

On March 5, 2009, BGT terminated its revolving credit agreement with
Citicorp and entered into a senior committed secured, 364-day revolving

line of credit and a separate security agreement with State Street Bank
and Trust Company (“SSB”). The SSB line of credit provides the Fund with
a maximum commitment of $134 million. The Fund has granted a security
interest in substantially all of its assets to SSB.

Advances are made by SSB to BGT at BGT’s option at either (a) the higher
of 1.00% above the Fed Effective Rate or 1.00% above the Overnight LIBOR
Rate and (b) 1.00% above 7-day, 30-day, or 60-day LIBOR Rate. In addi-
tion, BGT pays a facility fee and a commitment fee based upon SSB’s total
commitment to BGT. The fees associated with each of the agreements are
included in the Statements of Operations as borrowing costs. Advances to
BGT as of October 31, 2009 are shown in the Statements of Assets and
Liabilities as loan payable. For the year ended October 31, 2009, the daily
weighted average interest rate was 2.15%.

Under the Investment Company Act of 1940, BGT may not declare divi-
dends or make other distributions on Common Shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to the
outstanding indebtedness is less than 300%.

For the year ended October 31, 2009, the daily weighted average interest
rates for Funds with reverse repurchase agreements were as follows:

PSW   1.93%  
PSY   1.45%  
BPP   2.38%  
BTZ   2.33%  

9. Income Tax Information:

Reclassifications: Accounting principles generally accepted in the United States of America require that certain components of net assets be adjusted to
reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The
following permanent differences as of October 31, 2009 attributable to accounting for swap agreements, the classification of investments, foreign currency
transactions and non-deductible expenses were reclassified to the following accounts:

    PSW   PSY   BPP   BTZ   CII   BGT  
Paid-in capital     —   $ (3,858)   —   —   $ (7,879)   —  
Undistributed (distributions in excess of) net investment income   $ (254,371)   $ (1,436,139)   $ (3,866,202)   $ (1,415,793)   $ 7,879   $ (3,185,823)  
Accumulated net realized loss     $ 254,371   $ 1,439,997   $ 3,866,202   $ 1,415,793   —   $ 3,185,823  
The tax character of distributions paid during the periods ended October 31, 2009 and 2008 for all Funds and December 31, 2007 for BPP, CII and BGT  
were as follows:                
    PSW   PSY   BPP   BTZ   CII   BGT  
Ordinary income                
10/31/2009     $ 9,272,893   $ 48,928,499   $ 18,039,320   $ 52,227,765   $ 52,962,484   $ 28,934,349  
10/31/2008     $ 17,443,001   $ 66,768,898   $ 20,860,160   $ 63,957,649   $ 7,846,070   $ 29,676,182  
12/31/2007     —   —   $ 40,678,314   —   $ 5,911,539   $ 39,557,202  
Long-term capital gains                
10/31/2009     —   —   —   —   $ 10,276,199   —  
10/31/2008     —   —   —   —   $ 2,596,353   —  
12/31/2007     —   —   $ 400,000   —   $ 23,835,961   —  
Tax return of capital                
10/31/2009     $ 1,345,345   $ 116,310   $ 4,250,036   $ 24,678,883   $ 19,660,314   $ 9,994,857  
10/31/2008     $ 545,246   $ 9,002,427   $ 5,480,035   $ 43,518,226   $ 7,292,188   —  
12/31/2007     —   —   $ 2,820,986   —   —   $ 8,473,282  
Total distributions                
10/31/2009     $ 10,618,238   $ 49,044,809   $ 22,289,356   $ 76,906,648   $ 82,898,997   $ 38,929,206  
10/31/2008     $ 17,988,247   $ 75,771,325   $ 26,340,195   $ 107,475,875   $ 17,734,611   $ 29,676,182  
12/31/2007     —   —   $ 43,899,300   —   $ 29,747,500   $ 48,030,484  
56   ANNUAL REPORT       OCTOBER 31, 2009      

Notes to Financial Statements (concluded)            
As of October 31, 2009, the tax components of accumulated net losses were as follows:          
    PSW   PSY   BPP   BTZ   CII   BGT  
Capital loss carryforwards     $(127,842,748)   $(447,757,170)   $(185,378,942)   $(387,036,152)   $(106,212,859)   $ (73,270,778)  
Net unrealized losses*     (13,773,056)   (85,650,823)   (34,137,626)   (95,975,896)   (83,448,589)   (41,417,420)  
Total     $(141,615,804)   $(533,407,993)   $(219,516,568)   $(483,012,048)   $(189,661,448)   $(114,688,198)  
* The differences between book-basis and tax-basis net unrealized losses were attributable primarily to the tax deferral of losses on wash sales, the amortization methods for premi-  
        ums and discounts on fixed income securities, the accrual of income on securities in default, the realization for tax purposes of unrealized gains/(losses) on certain futures and  
foreign currency contracts, the timing and recognition of partnership income, the accounting for swap agreements, the deferral of compensation to trustees and directors, the classi-  
        fication of investments and other temporary differences.              
As of October 31, 2009, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:  
Expires October 31,     PSW   PSY   BPP   BTZ   CII   BGT  
2011     $ 1,276,621   —   —   —   —   —  
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   $ 26,706,998   24,616,531  
2017     55,825,534   194,970,854   108,996,120   223,939,227   79,505,861   45,385,443  
Total     $ 127,842,748   $ 447,757,170   $ 185,378,942   $ 387,036,152   $ 106,212,859   $ 73,270,778  
10. Subsequent Events:                
Management’s evaluation of the impact of all subsequent events on the            
Funds’ financial statements was completed through December 28, 2009,            
the date the financial statements were issued.                
The Funds paid net investment income dividends on November 30, 2009            
to shareholders of record on November 13, 2009 as follows:              
    Common            
    Dividend            
    Per Share            
PSW     $0.0600            
PSY     $0.0750            
BPP     $0.0725            
BTZ     $0.1000            
BGT     $0.0675            
The dividends declared on Preferred Shares for the period November 1,            
2009 through November 30, 2009 were as follows:              
    Dividends            
  Series   Declared            
PSW   M7   $23,880            
  T7   $23,790            
PSY   M7   $25,541            
  T7   $25,445            
  W7   $25,452            
  TH7   $25,446            
  F7   $25,573            
  W28   $36,859            
  TH28   $36,888            
BPP   T7   $ 4,435            
  W7   $ 4,317            
  R7   $ 4,431            
BTZ   T7   $68,268            
  W7   $68,285            
  R7   $68,497            
  F7   $68,228            
BGT   T7   $23,175            
  W7   $23,172            
  R7   $23,175            
ANNUAL REPORT         OCTOBER 31, 2009   57  

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees/Directors of:
BlackRock Credit Allocation Income Trust I, Inc.
BlackRock Credit Allocation Income Trust II, Inc.
BlackRock Credit Allocation Income Trust III
BlackRock Credit Allocation Income Trust IV
Blackrock Enhanced Capital and Income Fund, Inc., and
BlackRock Floating Rate Income Trust
(Collectively the “Trusts”):

We have audited the accompanying statements of assets and liabilities
of BlackRock Credit Allocation Income Trust I, Inc. (formerly BlackRock
Preferred and Corporate Income Strategies Fund, Inc.) and BlackRock
Credit Allocation Income Trust II, Inc. (formerly BlackRock Preferred Income
Strategies Fund, Inc.), including the schedules of investments, as of
October 31, 2009, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of
the four years in the period then ended. We have also audited the accom-
panying statement of assets and liabilities of BlackRock Credit Allocation
Income Trust III (formerly BlackRock Preferred Opportunity Trust), including
the schedule of investments, as of October 31, 2009, and the related
statement of operations for the year then ended, the statements of
changes in net assets for the year then ended, for the period January 1,
2008 to October 31, 2008, and for the year ended December 31, 2007,
and the financial highlights for the year ended October 31, 2009, for the
period January 1, 2008 to October 31, 2008, and for each of the four
years in the period ended December 31, 2007. We have also audited the
accompanying statement of assets and liabilities of BlackRock Credit
Allocation Income Trust IV (formerly BlackRock Preferred and Equity
Advantage Trust), including the schedule of investments, as of October 31,
2009, and the related statements of operations for the year then ended,
the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the two years
in the period ended October 31, 2009, and for the period December 27,
2006 (commencement of operations) to October 31, 2007. We have also
audited the accompanying statement of assets and liabilities of BlackRock
Enhanced Capital and Income Fund, Inc., including the schedule of invest-
ments, as of October 31, 2009, and the related statement of operations
for the year then ended, the statements of changes in net assets for the
year then ended, for the period January 1, 2008 to October 31, 2008, and
for the year ended December 31, 2007, and the financial highlights for the
year ended October 31, 2009, for the period January 1, 2008 to October
31, 2008, for each of the three years in the period ended December 31,
2007, and for the period April 30, 2004 (commencement of operations) to
December 31, 2004. We have also audited the accompanying statements
of assets and liabilities of BlackRock Floating Rate Income Trust (formerly
BlackRock Global Floating Rate Income Trust), including the schedule of
investments, as of October 31, 2009, and the related statement of opera-
tions and cash flows for the year then ended, the statements of changes
in net assets for the year then ended, for the period January 1, 2008 to
October 31, 2008, and for the year ended December 31, 2007, and the
financial highlights for the year ended October 31, 2009, for the period
January 1, 2008 to October 31, 2008, for each of the three years in the

period ended December 31, 2007, and for the period August 30, 2004
(commencement of operations) to December 31, 2004. These financial
statements and financial highlights are the responsibility of the Trusts’ man-
agement. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial high-
lights of BlackRock Credit Allocation Income Trust I, Inc. and BlackRock
Credit Allocation Income Trust II, Inc., for the year ended October 31, 2005
were audited by other auditors whose report, dated December 9, 2005,
expressed an unqualified opinion on those financial highlights.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial highlights are free of
material misstatement. The Trusts are not required to have, nor were we
engaged to perform an audit of their internal control over financial report-
ing. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Trusts’ internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and signifi-
cant estimates made by management, as well as evaluating the overall
financial statement presentation. Our procedures include confirmation of
the securities owned as of October 31, 2009, by correspondence with the
custodian and financial intermediaries; where replies were not received
from financial intermediaries, we performed other auditing procedures. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
BlackRock Credit Allocation Income Trust I, Inc. and BlackRock Credit
Allocation Income Trust II, Inc., the results of their operations for the year
then ended, the changes in their net assets for each of the two years in
the period then ended, and the financial highlights for each of the four
years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America. Additionally, in our
opinion, the financial statements and financial highlights referred to above
present fairly, in all material respects, the financial position of BlackRock
Credit Allocation Income Trust III, the results of its operations for the year
then ended, the changes in its net assets for the year then ended,
for the period January 1, 2008 to October 31, 2008, and for the year
ended December 31, 2007, and the financial highlights for the year ended
October 31, 2009, for the period January 1, 2008 to October 31, 2008,
and for each of the four years in the period ended December 31, 2007,
in conformity with accounting principles generally accepted in the United
States of America. Additionally, in our opinion, the financial statements and
financial highlights referred to above present fairly, in all material respects,
the financial position of BlackRock Credit Allocation Income Trust IV, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial high-
lights for each of the two years in the period then ended, and for the period

58 ANNUAL REPORT OCTOBER 31, 2009

Report of Independent Registered Public Accounting Firm (concluded)

December 27, 2006 (commencement of operations) to October 31, 2007,
in conformity with accounting principles generally accepted in the United
States of America. Additionally, in our opinion, the financial statements and
financial highlights referred to above present fairly, in all material respects,
the financial position of BlackRock Enhanced Capital and Income Fund,
Inc., the results of its operations for the year then ended, the changes in
its net assets for the year then ended, for the period January 1, 2008 to
October 31, 2008, and for the year ended December 31, 2007, and the
financial highlights for the year ended October 31, 2009, for the period
January 1, 2008 to October 31, 2008, for each of the three years in the
period ended December 31, 2007, and for the period April 30, 2004
(commencement of operations) to December 31, 2004, in conformity with
accounting principles generally accepted in the United States of America.
Additionally, in our opinion, the financial statements and financial highlights

referred to above present fairly, in all material respects, the financial position
of BlackRock Floating Rate Income Trust, the results of its operations and
its cash flows for the year then ended, the changes in its net assets for the
year then ended, for the period January 1, 2008 to October 31, 2008, and
for the year ended December 31, 2007, and the financial highlights for the
year ended October 31, 2009, for the period January 1, 2008 to October
31, 2008, for each of the three years in the period ended December 31,
2007, and for the period August 30, 2004 (commencement of operations)
to December 31, 2004, in conformity with accounting principles generally
accepted in the United States of America.

Deloitte & Touche LLP
Princeton, New Jersey
December 28, 2009

      Important Tax Information (Unaudited)                
The following information is provided with respect to the ordinary income distributions paid by the Funds for the taxable year ended      
October 31, 2009:                
  PSW   PSY   BPP   BTZ   CII   BGT    
Qualified Dividend Income for Individuals*                
Months Paid:                
November – December 2008†   28.71%   32.86%   43.81%   38.14%   27.56%   —    
January – October 2009   28.16%   23.53%   55.05%   63.22%   33.97%   —    
Dividends Received Deductions for Corporations*                
Months Paid:                
November – December 2008†   14.15%   17.08%   13.42%   2.49%   26.00%   —    
January – October 2009   9.43%   11.78%   17.49%   37.17%   31.13%   —    
Interest-Related Dividends and Qualified Short-Term Capital Gains                
for Non-U.S. Residents**                
Months Paid:                
November – December 2008†   51.30%   55.03%   41.66%   29.12%   —   46.19%    
January – October 2009   61.37%   63.14%   53.10%   54.52%   100%   100%    
    * The Funds hereby designate the percentage indicated above or the maximum amount allowable by law.            
  ** Represents the portion of taxable ordinary income dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.      
    † Includes dividend paid on January 9, 2009 to PSW, PSY, BPP, BTZ, and BGT Common Shareholders.            
Additionally, of the CII distributions paid between March and September 2009, 16.53% represented long-term capital gains.        
                                                          ANNUAL REPORT         OCTOBER 31, 2009       59  

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

The Board of Directors or the Board of Trustees, as the case may be, (each,
a “Board” and, collectively, the “Boards,” and the members of which are
referred to as “Board Members”) of each of BlackRock Credit Allocation
Income Trust I, Inc. (formerly BlackRock Preferred and Corporate Income
Strategies Fund, Inc.) (“PSW”), BlackRock Credit Allocation Income Trust
II, Inc. (formerly BlackRock Preferred Income Strategies Fund, Inc.) (“PSY”),
BlackRock Credit Allocation Income Trust III (formerly BlackRock Preferred
Opportunity Trust) (“BPP”), BlackRock Credit Allocation Income Trust IV (for-
merly BlackRock Preferred and Equity Advantage Trust) (“BTZ”), BlackRock
Enhanced Capital and Income Fund, Inc. (“CII”) and BlackRock Floating
Rate Income Trust (“BGT,” and together with PSW, PSY, BPP, BTZ, and CII,
each a “Fund” and, collectively, the “Funds”) met on April 14, 2009,
May 28 – 29, 2009 and August 25 – 26, 2009 to consider the approval
of its respective Fund’s investment advisory agreement (each, an “Advisory
Agreement”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s
investment advisor. The Board of each of PSW, PSY, BPP, BTZ, CII and BGT
also considered the approval of a sub-advisory agreement (each, a “Sub-
Advisory Agreement”) among its respective Fund, the Manager and one
or both of the following sub-advisors, as the case may be: BlackRock
Financial Management, Inc.; and BlackRock Investment Management, LLC
(each, a “Sub-Advisor”). The Manager and the Sub-Advisors are referred
to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory
Agreements are referred to herein as the “Agreements.” Unless otherwise
indicated, references to actions taken by the “Board” or the “Boards” shall
mean each Board acting independently with respect to its Fund.

Activities and Composition of the Boards

Each Board consists of twelve individuals, ten of whom are not “interested
persons” of the Funds as defined in the Investment Company Act of 1940,
as amended (the “1940 Act”) (the “Independent Board Members”). The
Board Members of each Fund are responsible for the oversight of the oper-
ations of such Fund and perform the various duties imposed on the direc-
tors of investment companies by the 1940 Act. The Independent Board
Members have retained independent legal counsel to assist them in con-
nection with their duties. The Chairman of each Board is an Independent
Board Member. Each Board has established five standing committees: an
Audit Committee, a Governance and Nominating Committee, a Compliance
Committee, a Performance Oversight Committee and an Executive
Committee, each of which is composed of Independent Board Members
(except for the Executive Committee, which has one interested Board
Member) and is chaired by an Independent Board Member. In addition,
the Boards of certain of the Funds have established an Ad Hoc Committee
on Auction Market Preferred Shares.

The Agreements

Pursuant to the 1940 Act, each Board is required to consider the continuation
of the Agreements on an annual basis. In connection with this process, each
Board assessed, among other things, the nature, scope and quality of the
services provided to its respective Fund by the personnel of BlackRock and its
affiliates, including investment management, administrative and shareholder
services, oversight of fund accounting and custody, marketing services and
assistance in meeting applicable legal and regulatory requirements.

Throughout the year, the Boards, acting directly and through their commit-
tees, consider at each of their meetings factors that are relevant to their
annual consideration of the renewal of the Agreements, including the
services and support provided by BlackRock to the Funds and their share-
holders. Among the matters the Boards considered were: (a) investment
performance for one-, three- and five-year periods, as applicable, against
peer funds, and applicable benchmarks, if any, as well as senior manage-
ment and portfolio managers’ analysis of the reasons for any out perform-
ance or underperformance against its peers; (b) fees, including advisory
and other amounts paid to BlackRock and its affiliates by the Funds for
services such as call center and fund accounting; (c) the Funds’ operating
expenses; (d) the resources devoted to, and compliance reports relating to,
the Funds’ investment objectives, policies and restrictions; (e) the Funds’
compliance with their Code of Ethics and compliance policies and proce-
dures; (f) the nature, cost and character of non-investment management
services provided by BlackRock and its affiliates; (g) BlackRock’s and other
service providers’ internal controls; (h) BlackRock’s implementation of the
proxy voting policies approved by the Board; (i) execution quality of port-
folio transactions and, as applicable, the use of brokerage commissions;
(j) BlackRock’s implementation of the Funds’ valuation and liquidity proce-
dures; and (k) periodic updates on BlackRock’s business.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 14, 2009 meeting, each Board
requested and received materials specifically relating to the Agreements.
Each Board is engaged in an ongoing process with BlackRock to continu-
ously review the nature and scope of the information provided to better
assist their deliberations. The materials provided in connection with the
April meeting included (a) information independently compiled and pre-
pared by Lipper, Inc. (“Lipper”) on Fund fees and expenses, and the invest-
ment performance of each Fund as compared with a peer group of funds
as determined by Lipper and, where applicable, a customized peer group
selected by BlackRock (collectively, “Peers”); (b) information on the profit-
ability of the Agreements to BlackRock and a discussion of fall-out benefits
to BlackRock and its affiliates and significant shareholders; (c) a general
analysis provided by BlackRock concerning investment advisory fees charged
to other clients, such as institutional clients and open-end funds, under
similar investment mandates, as well as the performance of such other
clients; (d) the impact of economies of scale; (e) a summary of aggregate
amounts paid by each Fund to BlackRock; and (f) an internal comparison
of management fees classified by Lipper, if applicable.

At an in-person meeting held on April 14, 2009, each Board reviewed
materials relating to its consideration of the Agreements. As a result of the
discussions that occurred during the April 14, 2009 meeting, the Boards
presented BlackRock with questions and requests for additional informa-
tion and BlackRock responded to these requests with additional written
information in advance of the May 28 – 29, 2009 Board meeting.

At an in-person meeting held on May 28 – 29, 2009, the Boards of each
of BGT, BPP, BTZ and CII, including the Independent Board Members, unani-
mously approved the continuation of the Advisory Agreement between the

60 ANNUAL REPORT OCTOBER 31, 2009

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

Manager and such Fund and the Sub-Advisory Agreement among such
Fund, the Manager and the Sub-Advisor(s), as applicable, each for a one-
year term ending June 30, 2010. The Boards considered all factors they
believed relevant with respect to the Funds, including, among other factors:
(a) the nature, extent and quality of the services provided by BlackRock;
(b) the investment performance of the Fund and BlackRock portfolio man-
agement; (c) the advisory fee and the cost of the services and profits to
be realized by BlackRock and certain affiliates from their relationship with
the Fund; (d) economies of scale; and (e) other factors.

Each Board also considered other matters it deemed important to the
approval process, such as services related to the valuation and pricing
of its respective Fund’s portfolio holdings, direct and indirect benefits to
BlackRock and its affiliates and significant shareholders from their relation
ship with such Fund and advice from independent legal counsel with
respect to the review process and materials submitted for the Board’s
review. The Boards noted the willingness of BlackRock personnel to engage
in open, candid discussions with the Boards. The Boards did not identify
any particular information as controlling, and each Board Member may
have attributed different weights to the various items considered.

At the in-person meeting held on May 28 – 29, 2009, the Boards of each
of PSY and PSW held extended discussions of the long- and short-term
performance of PSY and PSW and the future prospects for the investment
policies of such Funds with respect to investing in primarily preferred
stocks. At such meeting, the Boards of each of PSY and PSW approved
the continuation of the Advisory Agreement between the Manager and
each such Fund and the Sub-Advisory Agreement among such Fund, the
Manager and the Sub-Advisor(s) on an interim basis for a three-month
period ended September 30, 2009. In taking such action, the Boards of
each of PSY and PSW noted that the interim approval of the Agreements
was intended to allow and encourage BlackRock to explore various alter-
natives for the future management of PSY and PSW, and to report back to
the Boards with recommendations at the Boards’ next regularly scheduled
in-person meetings.

At an in-person meeting of the Boards of each of PSY and PSW on
August 25 – 26, 2009, BlackRock recommended changing certain
investment policies of PSY and PSW by removing their non-fundamental
investment policies requiring that they invest at least 80% of their respec-
tive assets in preferred securities and adopting a new non-fundamental
policy requiring that PSY and PSW invest at least 80% of their respective
total assets in credit-related securities, including, but not limited to,
investment grade corporate bonds, high yield bonds, bank loans, preferred
securities or convertible bonds or derivatives with economic characteristics
similar to these credit-related securities. As a result of these investment
policy amendments, PSY and PSW were proposed to be renamed
BlackRock Credit Allocation Income Trust I, Inc. and BlackRock Credit
Allocation Income Trust II, Inc., respectively, to reflect their new
portfolio characteristics.

After considering BlackRock’s proposed changes for PSY and PSW and
recalling their deliberations with respect to PSY and PSW at the April
and May Board meetings, the Board of each such Fund, including the

Independent Board Members, unanimously approved the continuation of
the Advisory Agreement between the Manager and such Fund and the Sub-
Advisory Agreement among such Fund, the Manager and the Sub-Advisor(s),
each for a nine-month term ending June 30, 2010.

A. Nature, Extent and Quality of the Services: Each Board, including its
Independent Board Members, reviewed the nature, extent and quality of
services provided by BlackRock, including the investment advisory services
and the resulting performance of its respective Fund. Throughout the year,
each Board compared its respective Fund’s performance to the perform-
ance of a comparable group of closed-end funds, and the performance of
a relevant benchmark, if any. The Boards met with BlackRock’s senior man-
agement personnel responsible for investment operations, including the
senior investment officers. Each Board also reviewed the materials provided
by its respective Fund’s portfolio management team discussing such Fund’s
performance and such Fund’s investment objective, strategies and outlook.

Each Board considered, among other factors, the number, education and
experience of BlackRock’s investment personnel generally and its respective
Fund’s portfolio management team, investments by portfolio managers in the
funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s
use of technology, BlackRock’s commitment to compliance and BlackRock’s
approach to training and retaining portfolio managers and other research,
advisory and management personnel. Each Board also reviewed a general
description of BlackRock’s compensation structure with respect to its
respective Fund’s portfolio management team and BlackRock’s ability
to attract and retain high-quality talent.

In addition to advisory services, each Board considered the quality of the
administrative and non-investment advisory services provided to its respec-
tive Fund. BlackRock and its affiliates and significant shareholders provide
the Funds with certain administrative and other services (in addition to any
such services provided to the Funds by third parties) and officers and other
personnel as are necessary for the operations of the Funds. In addition to
investment advisory services, BlackRock and its affiliates provide the Funds
with other services, including (i) preparing disclosure documents, such as
the prospectus and the statement of additional information in connection
with the initial public offering and periodic shareholder reports; (ii) prepar-
ing communications with analysts to support secondary market trading of
the Funds; (iii) assisting with daily accounting and pricing; (iv) preparing
periodic filings with regulators and stock exchanges; (v) overseeing and
coordinating the activities of other service providers; (vi) organizing Board
meetings and preparing the materials for such Board meetings; (vii) pro-
viding legal and compliance support; and (viii) performing other adminis-
trative functions necessary for the operation of the Funds, such as tax
reporting, fulfilling regulatory filing requirements, and call center services.
The Boards reviewed the structure and duties of BlackRock’s fund adminis-
tration, accounting, legal and compliance departments and considered
BlackRock’s policies and procedures for assuring compliance with applica-
ble laws and regulations.

B. The Investment Performance of the Funds and BlackRock: Each Board,
including its Independent Board Members, also reviewed and considered
the performance history of its respective Fund. In preparation for the April 14,

ANNUAL REPORT OCTOBER 31, 2009 61

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

2009 meeting, the Boards were provided with reports, independently pre-
pared by Lipper, which included a comprehensive analysis of each Fund’s
performance. The Boards also reviewed a narrative and statistical analysis
of the Lipper data that was prepared by BlackRock, which analyzed various
factors that affect Lipper’s rankings. In connection with its review, each
Board received and reviewed information regarding the investment per-
formance of its respective Fund as compared to a representative group
of similar funds as determined by Lipper and to all funds in such Fund’s
applicable Lipper category and, where applicable, a customized peer group
selected by BlackRock. Each Board was provided with a description of the
methodology used by Lipper to select peer funds. Each Board regularly
reviews the performance of its respective Fund throughout the year.

The Board of BTZ noted that, in general, BTZ performed better than its Peers
in that the performance of BTZ was at or above the median of its customized
Lipper peer group in both the one-year and since inception periods reported.

The Board of CII noted that, in general, CII performed better than its Peers
in that the performance of CII was at or above the median of its Lipper
Performance Universe in two of the one-year, three-year and since incep-
tion periods reported.

The Board of BGT noted that, in general, BGT performed better than its
Peers in that the performance of BGT was at or above the median of its
Lipper Performance Universe in each of the one-year, three-year and since
inception periods reported.

The Board of each of PSW, PSY, and BPP noted that PSW, PSY, and BPP
performed below the median of their respective customized Lipper peer
group in the one-, three- and five-year periods reported. The Board of
each of PSW, PSY, and BPP, and BlackRock reviewed the reasons for PSW’s,
PSY’s, and BPP’s underperformance during these periods compared with
their respective Peers. Each Board was informed that, among other things,
PSW’s, PSY’s, and BPP’s respective underweight position to retail preferreds
negatively impacted each such Fund.

For PSW, PSY and BPP, the Board of each respective Fund and BlackRock
discussed BlackRock’s commitment to providing the resources necessary
to assist the portfolio managers and to improve each such Fund’s per-
formance, including the changes to PSW’s and PSY’s non-fundamental
investment policies.

C. Consideration of the Advisory Fees and the Cost of the Services
and Profits to be Realized by BlackRock and its Affiliates from their
Relationship with the Funds: Each Board, including its Independent
Board Members, reviewed its respective Fund’s contractual advisory fee
rates compared with the other funds in its respective Lipper category.
Each Board also compared its respective Fund’s total expenses, as well
as actual management fees, to those of other comparable funds. Each
Board considered the services provided and the fees charged by
BlackRock to other types of clients with similar investment mandates,
including separately managed institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s
financial condition and profitability with respect to the services it provided
the Funds. The Boards were also provided with a profitability analysis that

detailed the revenues earned and the expenses incurred by BlackRock for
services provided to the Funds. The Boards reviewed BlackRock’s profitabil-
ity with respect to the Funds and other funds the Boards currently oversee
for the year ended December 31, 2008 compared to available aggregate
profitability data provided for the year ended December 31, 2007. The
Boards reviewed BlackRock’s profitability with respect to other fund com-
plexes managed by the Manager and/or its affiliates. The Boards reviewed
BlackRock’s assumptions and methodology of allocating expenses in the
profitability analysis, noting the inherent limitations in allocating costs among
various advisory products. The Boards recognized that profitability may be
affected by numerous factors including, among other things, fee waivers by
the Manager, the types of funds managed, expense allocations and busi-
ness mix, and therefore comparability of profitability is somewhat limited.

The Boards noted that, in general, individual fund or product line profitability
of other advisors is not publicly available. Nevertheless, to the extent such
information is available, the Boards considered BlackRock’s overall operat-
ing margin, in general, compared to the operating margin for leading invest-
ment management firms whose operations include advising closed-end
funds, among other product types. The comparison indicated that operating
margins for BlackRock with respect to its registered funds are generally
consistent with margins earned by similarly situated publicly traded com-
petitors. In addition, the Boards considered, among other things, certain
third-party data comparing BlackRock’s operating margin with that of other
publicly-traded asset management firms, which concluded that larger asset
bases do not, in themselves, translate to higher profit margins.

In addition, the Boards considered the cost of the services provided to the
Funds by BlackRock, and BlackRock’s and its affiliates’ profits relating to the
management and distribution of the Funds and the other funds advised by
BlackRock and its affiliates. As part of their analysis, the Boards reviewed
BlackRock’s methodology in allocating its costs to the management of the
Funds. The Boards also considered whether BlackRock has the financial
resources necessary to attract and retain high quality investment manage-
ment personnel to perform its obligations under the Agreements and to con-
tinue to provide the high quality of services that is expected by the Boards.

The Boards of each of BGT, BPP, BTZ, CII, PSY and PSW noted that its
respective Fund paid contractual management fees, which do not take into
account any expense reimbursement or fee waivers, lower than or equal to
the median contractual management fees paid by such Fund’s Peers.

D. Economies of Scale: Each Board, including its Independent Board
Members, considered the extent to which economies of scale might be
realized as the assets of its respective Fund increase and whether there
should be changes in the advisory fee rate or structure in order to enable
such Fund to participate in these economies of scale, for example through
the use of breakpoints in the advisory fee based upon the assets of such
Fund. The Boards considered that the funds in the BlackRock fund complex
share some common resources and, as a result, an increase in the overall
size of the complex could permit each fund to incur lower expenses than
it would otherwise as a stand-alone entity. The Boards also considered
BlackRock’s overall operations and its efforts to expand the scale of, and
improve the quality of, its operations.

62 ANNUAL REPORT OCTOBER 31, 2009

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)

The Boards noted that most closed-end fund complexes do not have fund
level breakpoints because closed-end funds generally do not experience
substantial growth after the initial public offering and each fund is man-
aged independently, consistent with its own investment objectives. The
Boards noted that only one closed-end fund in the Fund Complex has
breakpoints in its fee structure. Information provided by Lipper also
revealed that only one closed-end fund complex used a complex-level
breakpoint structure.

E. Other Factors: The Boards also took into account other ancillary or “fall-
out” benefits that BlackRock or its affiliates and significant shareholders
may derive from their relationship with the Funds, both tangible and intan-
gible, such as BlackRock’s ability to leverage its investment professionals
who manage other portfolios, an increase in BlackRock’s profile in the
investment advisory community, and the engagement of BlackRock’s affili-
ates and significant shareholders as service providers to the Funds, includ-
ing for administrative and distribution services. The Boards also noted that
BlackRock may use third-party research obtained by soft dollars generated
by certain mutual fund transactions to assist itself in managing all or a
number of its other client accounts.

In connection with their consideration of the Agreements, the Boards also
received information regarding BlackRock’s brokerage and soft dollar prac-
tices. The Boards received reports from BlackRock, which included informa-
tion on brokerage commissions and trade execution practices throughout
the year.

Conclusion

Each Board, including its Independent Board Members, unanimously
approved the continuation of the Advisory Agreement between its respec-
tive Fund and the Manager for a one-year term ending June 30, 2010, in
the case of BGT, BPP, BTZ and CII, and for a three-month interim period
followed by a nine-month term ending June 30, 2010 for each of PSW
and PSY, and, where applicable, the Sub-Advisory Agreement among such
Fund, the Manager and such Fund’s Sub-Advisor(s) for a one-year term
ending June 30, 2010, in the case of BGT, BPP, BTZ and CII, and for a
three-month interim period followed by a nine-month term ending June 30,
2010 for each of PSW and PSY. Based upon its evaluation of all these fac-
tors in their totality, each Board, including its Independent Board Members,
was satisfied that the terms of the Agreements were fair and reasonable
and in the best interest of its respective Fund and its shareholders. In
arriving at a decision to approve the Agreements, each Board did not
identify any single factor or group of factors as all-important or controlling,
but considered all factors together, and different Board Members may
have attributed different weights to the various factors considered. The
Independent Board Members were also assisted by the advice of inde-
pendent legal counsel in making this determination. The contractual fee
arrangements for each Fund reflects the results of several years of review
by such Fund’s Board Members and predecessor Board Members, and
discussions between such Board Members (and predecessor Board
Members) and BlackRock. Certain aspects of the arrangements may be
the subject of more attention in some years than in others, and the Board
Members’ conclusions may be based in part on their consideration of these
arrangements in prior years.

ANNUAL REPORT OCTOBER 31, 2009 63

Automatic Dividend Reinvestment Plans

For PSW, PSY and CII

PSW, PSY and CII offer a Dividend Reinvestment Plan (the “Plan”) under
which income and capital gains dividends paid by a Fund are automati-
cally reinvested in additional Common Shares of the Fund. The Plan is
administered on behalf of the shareholders by BNY Mellon Shareowner
Services for CII and Computershare Trust Company, N.A. for PSW and PSY
(individually, the “Plan Agent” or together, the “Plan Agents”). Under the Plan,
whenever a Fund declares a dividend, participants in the Plan will receive
the equivalent in Common Shares of the Fund. The Plan Agents will acquire
the shares for the participant’s account either (i) through receipt of addi-
tional unissued but authorized shares of the Funds (“newly issued shares”)
or (ii) by purchase of outstanding Common Shares on the open market on
the New York Stock Exchange, as applicable, or elsewhere. If, on the divi-
dend payment date, the Fund’s net asset value per share is equal to or less
than the market price per share plus estimated brokerage commissions
(a condition often referred to as a “market premium”), the Plan Agents will
invest the dividend amount in newly issued shares. If the Fund’s net asset
value per share is greater than the market price per share (a condition often
referred to as a “market discount”), the Plan Agents will invest the dividend
amount by purchasing on the open market additional shares. If the Plan
Agents are unable to invest the full dividend amount in open market pur-
chases, or if the market discount shifts to a market premium during the
purchase period, the Plan Agents will invest any uninvested portion in
newly issued shares. The shares acquired are credited to each shareholder’s
account. The amount credited is determined by dividing the dollar amount
of the dividend by either (i) when the shares are newly issued, the net
asset value per share on the date the shares are issued or (ii) when shares
are purchased in the open market, the average purchase price per share.

Participation in the Plan is automatic, that is, a shareholder is automati-
cally enrolled in the Plan when he or she purchases shares of Common
Shares of the Funds unless the shareholder specifically elects not to partici-
pate in the Plan. Shareholders who elect not to participate will receive all
dividend distributions in cash. Shareholders who do not wish to participate
in the Plan must advise their Plan Agent in writing (at the address set forth
below) that they elect not to participate in the Plan. Participation in the
Plan is completely voluntary and may be terminated or resumed at any
time without penalty by writing to the Plan Agent.

The Plan provides an easy, convenient way for shareholders to make addi-
tional, regular investments in the Funds. The Plan promotes a long-term
strategy of investing at a lower cost. All shares acquired pursuant to the
Plan receive voting rights. In addition, if the market price plus commissions
of a Fund’s shares is above the net asset value, participants in the Plan will
receive shares of the Funds for less than they could otherwise purchase
them and with a cash value greater than the value of any cash distribution
they would have received. However, there may not be enough shares avail-
able in the market to make distributions in shares at prices below the net
asset value. Also, since the Funds do not redeem shares, the price on
resale may be more or less than the net asset value.

There are no enrollment fees or brokerage fees for participating in the
Plan. The Plan Agents’ service fees for handling the reinvestment of distri-
butions are paid for by the Funds. However, brokerage commissions may be
incurred when the Funds purchase shares on the open market and share-
holders will pay a pro rata share of any such commissions.

The automatic reinvestment of dividends and distributions will not relieve
participants of any federal, state or local income tax that may be payable
(or required to be withheld) on such dividends. Therefore, income and
capital gains may still be realized even though shareholders do not receive
cash. If, when the Funds’ shares are trading at a market premium, the
Funds issue shares pursuant to the Plan that have a greater fair market
value than the amount of cash reinvested, it is possible that all or a portion
of the discount from the market value (which may not exceed 5% of the
fair market value of the Funds’ shares) could be viewed as a taxable distri-
bution. If the discount is viewed as a taxable distribution, it is also possible
that the taxable character of this discount would be allocable to all the
shareholders, including shareholders who do not participate in the Plan.
Thus, shareholders who do not participate in the Plan might be required to
report as ordinary income a portion of their distributions equal to their allo-
cable share of the discount.

All correspondence concerning the Plan, including any questions about
the Plan, should be directed to the Plan Agent at the following addresses:
Shareholders of CII should contact BNY Mellon Shareowner Services, P.O.
Box 385035, Pittsburgh, PA 15252-8035 Telephone: (866) 216-0242
and shareholders of PSW and PSY should contact Computershare Trust
Company, N.A., P.O. Box 43078, Providence, RI 02940-3078 Telephone:
(800) 699-1BFM or overnight correspondence should be directed to the
Plan Agent at 250 Royall Street, Canton, MA 02021.

For BPP, BTZ and BGT

Pursuant to the Plan of BPP, BTZ and BGT (the “Funds”), shareholders are
automatically enrolled to have all distributions of dividends and capital
gains reinvested by Computershare Trust Company, N.A. (the “Plan Agent”)
in the respective Fund’s shares pursuant to the Plan. Shareholders who
do not participate in the Plan will receive all distributions in cash paid by
check and mailed directly to the shareholders of record (or if the shares
are held in street or other nominee name, then to the nominee) by the
Plan Agent, which serves as agent for the shareholders in administering
the Plan.

After the Funds declare a dividend or determine to make a capital gain
distribution, the Plan Agent will acquire shares for the participants’ account,
depending upon the circumstances described below, either (i) through
receipt of unissued but authorized shares from the Funds (“newly issued
shares”) or (ii) by open market purchases. If, on the dividend payment
date, the net asset value per share NAV is equal to or less than the market
price per share plus estimated brokerage commissions (such condition
being referred to herein as “market premium”), the Plan Agent will invest
the dividend amount in newly issued shares on behalf of the participants.
The number of newly issued shares to be credited to each participant’s

64 ANNUAL REPORT OCTOBER 31, 2009

Automatic Dividend Reinvestment Plans (concluded)

account will be determined by dividing the dollar amount of the dividend
by the NAV on the date the shares are issued. However, if the NAV is less
than 95% of the market price on the payment date, the dollar amount of
the dividend will be divided by 95% of the market price on the payment
date. If, on the dividend payment date, the NAV is greater than the market
value per share plus estimated brokerage commissions (such condition
being referred to herein as “market discount”), the Plan Agent will invest
the dividend amount in shares acquired on behalf of the participants in
open-market purchases.

The Plan Agent’s fees for the handling of the reinvestment of dividends and
distributions will be paid by each Fund. However, each participant will pay
a pro rata share of brokerage commissions incurred with respect to the
Plan Agent’s open market purchases in connection with the reinvestment

of dividends and distributions. The automatic reinvestment of dividends
and distributions will not relieve participants of any Federal income tax
that may be payable on such dividends or distributions.

Each Fund reserves the right to amend or terminate the Plan. There is
no direct service charge to participants in the Plan; however each Fund
reserves the right to amend the Plan to include a service charge payable
by the participants. Participants who request a sale of shares through the
Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold
brokerage commission. All correspondence concerning the Plan should be
directed to the Plan Agent at P.O. Box 43078, Providence, RI 02940-3078
or by calling (800) 699-1BFM. All overnight correspondence should be
directed to the Plan Agent at 250 Royall Street, Canton, MA 02021.

ANNUAL REPORT OCTOBER 31, 2009 65

Officers and Directors          
        Number of BlackRock-    
        Advised Registered    
    Length     Investment Companies    
  Position(s)   of Time     (“RICs”) Consisting of    
Name, Address   Held with   Served as     Investment Portfolios   Public  
and Year of Birth   Funds   a Director 2   Principal Occupation(s) During Past 5 Years   (“Portfolios”) Overseen   Directorships  
      Non-Interested Directors 1          
Richard E. Cavanagh   Chairman   Since   Trustee, Aircraft Finance Trust since 1999; Director, The Guardian   102 RICS consisting of   Arch Chemical  
40 East 52nd Street   of the Board   2007   Life Insurance Company of America since 1998; Trustee, Educational   100 Portfolios   (chemical and allied  
New York, NY 10022   and Director     Testing Service from 1997 to 2009 and Chairman from 2005 to 2009     products)  
1946       Senior Advisor, The Fremont Group since 2008 and Director thereof      
      since 1996; Adjunct Lecturer, Harvard University since 2007; President      
and Chief Executive Officer of The Conference Board, Inc. (global
      business research organization) from 1995 to 2007.      
Karen P. Robards   Vice Chair   Since   Partner of Robards & Company, LLC (financial advisory firm) since   102 RICs consisting of   AtriCure, Inc.  
40 East 52nd Street   of the Board,   2007   1987; Co-founder and Director of the Cooke Center for Learning and   100 Portfolios   (medical devices);  
New York, NY 10022   Chair of     Development, (a not-for-profit organization) since 1987; Director of     Care Investment  
1950   the Audit     Enable Medical Corp. from 1996 to 2005.     Trust, Inc. (health  
  Committee         care real estate  
  and Director         investment trust)  
G. Nicholas Beckwith, III   Director   Since   Chairman and Chief Executive Officer, Arch Street Management, LLC   102 RICs consisting of   None  
40 East 52nd Street     2007   (Beckwith Family Foundation) and various Beckwith property companies   100 Portfolios    
New York, NY 10022       since 2005; Chairman of the Board of Directors, University of Pittsburgh      
1945       Medical Center since 2002; Board of Directors, Shady Side Hospital      
Foundation since 1977; Board of Directors, Beckwith Institute for
      Innovation In Patient Care since 1991; Member, Advisory Council on      
      Biology and Medicine, Brown University since 2002; Trustee, Claude      
      Worthington Benedum Foundation (charitable foundation) since 1989;      
      Board of Trustees, Chatham University since 1981; Board of Trustees,      
University of Pittsburgh since 2002; Emeritus Trustee, Shady Side
      Academy since 1977; Chairman and Manager, Penn West Industrial      
      Trucks LLC (sales, rental and servicing of material handling equipment)      
      from 2005 to 2007; Chairman, President and Chief Executive Officer,      
      Beckwith Machinery Company (sales, rental and servicing of construction    
      and equipment) from 1985 to 2005; Member of the Board of Directors,      
      National Retail Properties (REIT) from 2006 to 2007.      
Kent Dixon   Director   Since   Consultant/Investor since 1988.   102 RICs consisting of   None  
40 East 52nd Street   and Member   2007     100 Portfolios    
New York, NY 10022   of the Audit          
1937   Committee          
Frank J. Fabozzi   Director   Since   Consultant/Editor of The Journal of Portfolio Management since 2006;   102 RICs consisting of   None  
40 East 52nd Street   and Member   2007   Professor in the Practice of Finance and Becton Fellow, Yale University,   100 Portfolios    
New York, NY 10022   of the Audit     School of Management, since 2006; Adjunct Professor of Finance      
1948   Committee     and Becton Fellow, Yale University from 1994 to 2006.      
Kathleen F. Feldstein   Director   Since   President of Economics Studies, Inc. (private economic consulting   102 RICs consisting of   The McClatchy  
40 East 52nd Street     2007   firm) since 1987; Chair, Board of Trustees, McLean Hospital from   100 Portfolios   Company  
New York, NY 10022       2000 to 2008 and Trustee Emeritus thereof since 2008; Member of     (publishing)  
1941       the Board of Partners Community Healthcare, Inc. since 2005;      
Member of the Corporation of Partners HealthCare since 1995;
      Trustee, Museum of Fine Arts, Boston since 1992; Member of the      
      Visiting Committee to the Harvard University Art Museum since 2003.      
James T. Flynn   Director   Since   Chief Financial Officer of JP Morgan & Co., Inc. from 1990 to 1995.   102 RICs consisting of   None  
40 East 52nd Street   and Member   2007     100 Portfolios    
New York, NY 10022   of the Audit          
1939   Committee          
Jerrold B. Harris   Director   Since   Trustee, Ursinus College since 2000; Director, Troemner LLC   102 RICs consisting of   BlackRock Kelso  
40 East 52nd Street     2007   (scientific equipment)since 2000.   100 Portfolios   Capital Corp.  
New York, NY 10022            
1942            
66             ANNUAL REPORT                                                                                                         OCTOBER 31, 2009    

Officers and Directors (continued)        
        Number of BlackRock-    
        Advised Registered    
    Length     Investment Companies    
  Position(s)   of Time     (“RICs”) Consisting of    
Name, Address   Held with   Served as     Investment Portfolios     Public  
and Year of Birth   Funds   a Director 2     Principal Occupation(s) During Past 5 Years   (“Portfolios”) Overseen     Directorships  
      Non-Interested Directors 1 (concluded)            
R. Glenn Hubbard   Director   Since     Dean, Columbia Business School since 2004; Columbia faculty   102 RICs consisting of   ADP (data and  
40 East 52nd Street     2007     member since 1988; Co-Director, Columbia Business School’s   100 Portfolios   information services),  
New York, NY 10022         Entrepreneurship Program from 1997 to 2004; Visiting Professor,       KKR Financial  
1958         John F. Kennedy School of Government at Harvard University and the       Corporation (finance),  
        Harvard Business School since 1985 and at the University of Chicago       Metropolitan Life  
        since 1994; Chairman, U.S. Council of Economic Advisers under the       Insurance Company  
        President of the United States from 2001 to 2003.       (insurance)  
W. Carl Kester   Director   Since     George Fisher Baker Jr. Professor of Business Administration, Harvard   102 RICs consisting of   None  
40 East 52nd Street   and Member   2007     Business School; Deputy Dean for Academic Affairs, since 2006; Unit   100 Portfolios    
New York, NY 10022   of the Audit       Head, Finance, Harvard Business School, from 2005 to 2006; Senior        
1951   Committee       Associate Dean and Chairman of the MBA Program of Harvard Business        
        School, from 1999 to 2005; Member of the faculty of Harvard Business        
        School since 1981; Independent Consultant since 1978.        
  1 Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.      
  2 Date shown is the earliest date a person has served as a director for the Funds covered by this annual report. Following the combination of Merrill Lynch  
    Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock Fund boards  
    were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows directors as joining the Funds’ board in 2007,  
    each director first became a member of the board of other legacy MLIM or legacy BlackRock Funds as follows: G. Nicholas Beckwith, III, 1999; Richard E.  
    Cavanagh, 1994; Kent Dixon, 1988; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard,  
    2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.        
      Interested Directors 3              
Richard S. Davis   President   Since   Managing Director, BlackRock, Inc. since 2005; Chief Executive Officer, State Street   171 RICs   None  
40 East 52nd Street   and   2007   Research & Management Company from 2000 to 2005; Chairman of the Board   consisting of    
New York, NY 10022   Director     of Trustees, State Street Research Mutual Funds from 2000 to 2005; Chairman,   282 Portfolios    
1945       SSR Realty from 2000 to 2004.        
Henry Gabbay   Director   Since   Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock,   171 RICs   None  
40 East 52nd Street     2007   Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC   consisting of    
New York, NY 10022       from 1998 to 2007; President of BlackRock Funds and BlackRock Bond     282 Portfolios    
1947       Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end      
      funds in the BlackRock fund complex from 1989 to 2006.        
  3 Mr. Davis is an “interested person,” as defined in the Investment Company Act of 1940, of the Funds based on his position with BlackRock, Inc. and its  
    affiliates. Mr. Gabbay is an “interested person” of the Funds based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership  
    of BlackRock, Inc. and PNC securities. Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.  
            ANNUAL REPORT   OCTOBER 31, 2009                                       67  

Officers and Directors (concluded)        
  Position(s)            
Name, Address   Held with   Length of          
and Year of Birth   Funds   Time Served Principal Occupation(s) During Past 5 Years      
Funds Officers 1              
Anne F. Ackerley   President   Since           Managing Director of BlackRock, Inc. since 2000; Vice President of the BlackRock-advised funds from 2007 to 2009;  
40 East 52nd Street   and Chief   2009           Chief Operating Officer of BlackRock’s Global Client Group (GCG) since 2009; Chief Operating Officer of BlackRock’s  
New York, NY 10022   Executive             U.S. Retail Group from 2006 to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006.  
1962   Officer            
Brendan Kyne   Vice   Since           Director of BlackRock, Inc. since 2008; Head of Product Development and Management for BlackRock’s U.S. Retail  
40 East 52nd Street   President   2009           Group since 2009, co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008;  
New York, NY 10022               Associate of BlackRock, Inc. from 2002 to 2004.      
1977              
Neal J. Andrews   Chief   Since           Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund  
40 East 52nd Street   Financial   2007           Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006.  
New York, NY 10022   Officer            
1966              
Jay M. Fife   Treasurer   Since           Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Assistant Treasurer of the Merrill Lynch  
40 East 52nd Street     2007           Investment Managers, L.P. (“MLIM”) and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of  
New York, NY 10022               MLIM Fund Services Group from 2001 to 2006.      
1970              
Brian P. Kindelan   Chief   Since           Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel  
40 East 52nd Street   Compliance   2007           of BlackRock, Inc. since 2005; Director and Senior Counsel of BlackRock Advisors, LLC from 2001 to 2004.  
New York, NY 10022   Officer            
1959              
Howard B. Surloff   Secretary   Since           Managing Director and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; General Counsel (U.S.)  
40 East 52nd Street     2007           of Goldman Sachs Asset Management, L.P. from 1993 to 2006.      
New York, NY 10022              
1965              
  1 Officers of the Funds serve at the pleasure of the Board.        
Investment Advisor       Custodians     Transfer Agent   Accounting Agent   Independent   Legal Counsel  
BlackRock Advisors, LLC       State Street Bank   Common Shares   State Street Bank   Registered Public   Skadden, Arps, Slate,  
Wilmington, DE 19809       and Trust Company 1   Computershare Trust Company, N.A. 1   and Trust Company   Accounting Firm   Meagher & Flom LLP  
      Boston, MA 02111   Canton, MA 02021   Princeton, NJ 08540   Deloitte & Touche LLP   New York, NY 10036  
Sub-Advisor              
          Princeton, NJ 08540    
BlackRock Financial       Brown Brothers,   BNY Mellon Shareowner Services 2       Address of the Funds  
Management, Inc. 2,3       Harriman & Co. 2   Jersey City, NJ 07310       100 Bellevue Parkway  
New York, NY 10022       Boston, MA 02109         Wilmington, DE 19809  
      Auction Agent        
BlackRock Investment       Preferred Shares        
Management, LLC 2       BNY Mellon Shareowner Services 1        
Plainsboro, NJ 08536       Jersey City, NJ 07310        
1 For all Funds except CII.              
2 For CII.              
3 For PSW, PSY, BPP, BTZ and BGT.            

Effective July 31, 2009, Donald C. Burke, President and Chief Executive Officer of the Funds retired. The Funds’ Board
wishes Mr. Burke well in his retirement.

Effective August 1, 2009, Anne F. Ackerley became President and Chief Executive Officer of the Funds, and Brendan Kyne
became Vice President of the Funds.

68 ANNUAL REPORT OCTOBER 31, 2009

Additional Information                
      Proxy Results                  
The Annual Meeting of Shareholders was held on August 26, 2009 for shareholders of record on June 29, 2009 to elect director nominees of each Fund:  
Approved the Class II Directors as follows:                
  Richard S. Davis   Frank J. Fabozzi               James T. Flynn   Karen P. Robards  
      Votes     Votes     Votes     Votes  
  Votes For   Withheld   Votes For   Withheld     Votes For   Withheld   Votes For   Withheld  
BGT 1   19,304,993   695,969   1,536 2   41 2     19,358,516   642,446   19,407,966   592,996  
BTZ 1   45,476,492   1,268,611   5,600 2   108 2     45,358,705     1,386,398   45,337,245   1,407,858  
BPP 1   16,044,548   543,383   1,522 2   30 2     16,044,548   543,383   16,037,584   550,347  
Approved the Directors as follows:                
      G. Nicholas Beckwith, III   Richard E. Cavanagh   Richard S. Davis  
        Votes     Votes     Votes  
      Votes For   Withheld     Votes For   Withheld   Votes For   Withheld  
CII       37,172,227   1,688,817     37,233,458   1,627,586   37,337,729   1,523,315  
PSW       8,451,844   322,043       8,430,797   343,090   8,450,828   323,059  
PSY       34,209,217   1,432,504     34,213,593   1,428,128   34,247,323   1,394,398  
      Kent Dixon               Frank J. Fabozzi   Kathleen F. Feldstein  
        Votes     Votes     Votes  
      Votes For   Withheld     Votes For   Withheld   Votes For   Withheld  
CII       37,174,585   1,686,459   37,288,696   1,572,348   37,194,912   1,666,132  
PSW       8,433,142   340,745             1,279 2   12 2   8,454,805   319,082  
PSY       34,097,941   1,543,780             3,731 2   72 2   34,195,383   1,446,338  
      James T. Flynn               Henry Gabbay   Jerrold B. Harris  
        Votes     Votes     Votes  
      Votes For   Withheld     Votes For   Withheld   Votes For   Withheld  
CII       37,181,395   1,679,649   37,303,898   1,557,146   37,281,759   1,579,285  
PSW       8,438,377   335,510     8,450,828     323,059   8,447,635   326,252  
PSY       34,166,913   1,474,808   34,240,405   1,401,316   34,247,106   1,394,615  
      R. Glenn Hubbard               W. Carl Kester   Karen P. Robards  
        Votes     Votes     Votes  
      Votes For   Withheld     Votes For   Withheld   Votes For   Withheld  
CII       37,209,180   1,651,864     37,313,817   1,547,227   37,310,060   1,550,984  
PSW       8,436,816   337,071               1,279 2   12 2   8,437,967   335,920  
PSY       34,258,257   1,383,464               3,731 2   72 2   34,257,723   1,383,998  
1 The Board is organized into three classes, one class of which is elected annually. Each Director serves a three-year term concurrent with the class into which he or she is elected.  
  2 Voted on by holders of Preferred Shares only                
      Fund Certification                  
Certain Funds are listed for trading on the New York Stock Exchange   Funds filed with the SEC the certification of its chief executive officer and  
(“NYSE”) and have filed with the NYSE their annual chief executive officer   chief financial officer required by section 302 of the Sarbanes-Oxley Act.  
certification regarding compliance with the NYSE’s listing standards. The            
  ANNUAL REPORT         OCTOBER 31, 2009     69  

Additional Information (continued)

Dividend Policy

Each Fund’s, except CII’s, dividend policy is to distribute all or a portion of
its net investment income to its shareholders on a monthly (quarterly for
CII) 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/quarter
and may at times in any particular month/quarter pay out such accumu-
lated but undistributed income in addition to net investment income

earned in that month/quarter. As a result, the dividends paid by the Funds
for any particular month/quarter may be more or less than the amount
of net investment income earned by the Funds during such month/quarter.
The Funds’ current accumulated but undistributed net investment income,
if any, is disclosed in the Statements of Assets and Liabilities, which com-
prises part of the financial information included in this report.

General Information

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.

CII

During the period, the Board of Directors (the “Board”) of CII approved a
change to the Fund’s option writing policy. The Fund has the authority to
write ( i.e. , sell) put options on the types of securities or instruments that
may be held by the Fund, provided that such put options are covered,
meaning that such options are secured by segregated, liquid instruments
or cash. Under the original policy, the Fund was limited from selling puts if,
as a result, more than 50% of the Fund’s assets would be required to cover
its potential obligations under its hedging and other investment transac-
tions. The Board approved the elimination of this 50% requirement. When
the Fund writes covered put options, it bears the risk of loss if the value of
the underlying stock declines below the exercise price minus the put pre-
mium. If the option is exercised, the Fund could incur a loss if it is required
to purchase the stock underlying the put option at a price greater than the
market price of the stock at the time of exercise plus the put premium the
Fund received when it wrote the option. While the Fund’s potential gain in
writing a covered put option is limited to distributions earned on the liquid
assets securing the put option plus the premium received from the pur-
chaser of the put option, the Fund risks a loss equal to the entire exercise
price of the option minus the put premium.

PSW, PSY, BPP and BTZ

On August 26, 2009, the Board of PSW, PSY, BPP and BTZ (the “Funds”)
approved a change to certain investment policies of the Funds. As a result
of these policy changes, PSY and BPP will no longer focus their investments
primarily on preferred securities and PSW will no longer focus its invest-
ments primarily on preferred securities and corporate bonds. In addition,
BTZ will no longer focus its investments primarily on preferred and equity
securities, nor will it employ an option-writing strategy in the future.
Instead, the Funds will transition to a portfolio investing in a broader
spectrum of securities across the capital structure. In addition, the
Board approved name changes for the Funds as follows:

Prior Name New Name
BlackRock Preferred and Corporate BlackRock Credit Allocation Income
Income Strategies Fund, Inc. Trust I, Inc.
BlackRock Preferred Income Strategies BlackRock Credit Allocation Income
Fund, Inc. Trust II, Inc.
BlackRock Preferred Opportunity Trust BlackRock Credit Allocation Income Trust III
BlackRock Preferred and Equity BlackRock Credit Allocation Income Trust IV
Advantage Trust

PSY and BPP each previously employed a non-fundamental investment pol-
icy of investing, under normal market conditions, at least 80% of its total
assets in preferred securities. PSW previously employed a non-fundamental
investment policy of investing, under normal market conditions, at least
80% of its total assets in a portfolio of preferred securities and corporate
debt securities. In addition, PSW employed a policy of investing, under
normal market conditions, at least 65% of its total assets in preferred
securities and up to 35% of its total assets in debt securities. BTZ previ-
ously employed a non-fundamental investment policy of investing, under
normal market conditions, at least 80% of its total assets in preferred and
equity securities and derivatives with economic characteristics similar to
individual or groups of equity securities. For each Fund, its non-fundamen-
tal policy has been revised to allow the Fund to invest, under normal mar-
ket conditions, at least 80% of its total assets in credit-related securities,
including, but not limited to, investment grade corporate bonds, high yield
bonds, bank loans, preferred securities or convertible bonds or derivatives
with economic characteristics similar to these credit-related securities.

The Board has taken these actions in response to the current and prospec-
tive market environment for preferred securities. BlackRock and the Board
believe the amended policies will better position each Fund to achieve its
investment objective and are in the best interests of the Funds’ sharehold-
ers. The approved changes will not alter the Funds’ investment objectives
and each Fund will continue to be managed in accordance with its invest-
ment objective of primarily providing shareholders with current income and
secondarily providing shareholders with capital appreciation.

In addition to the foregoing, the Board also approved changes to each
Fund’s restriction on credit quality of eligible investments. Previously, each
Fund was restricted to investing, under normal market conditions, no more
than 20% of its total assets in securities rated below investment grade at
the time of purchase. The amended policy allows each Fund to invest,
under normal market conditions, without limitation in securities rated below
investment grade at the time of purchase. While this policy affords each
Fund additional flexibility to invest in securities rated below investment
grade at the time of purchase, it is anticipated, under current market con-
ditions, that the Fund will maintain an average credit quality of at least
investment grade.

BlackRock anticipates that it will gradually reposition each Fund’s portfolio
over time and that during such period the Fund may continue to hold a
substantial portion of its assets in preferred securities, corporate bonds
and/or equity securities, as applicable. At this time, it is uncertain how long
the repositioning may take, and the Fund may continue to be subject to

70 ANNUAL REPORT OCTOBER 31, 2009

Additional Information (continued)

General Information (continued)

risks associated with investing a substantial portion of its assets in pre-
ferred securities until the repositioning is complete.

The Fund’s Investments

Following the transition, each Fund will invest at least 80% of its total
assets in credit-related securities, including, but not limited to, the follow-
ing types of investments:

Corporate Bonds — The Funds may invest in corporate bonds. The invest-
ment return of corporate bonds reflects interest on the security and
changes in the market value of the security. The market value of a
corporate bond generally may be expected to rise and fall inversely with
interest rates. The market value of a corporate bond also may be affected
by the credit rating of the corporation, the corporation’s performance and
perceptions of the corporation in the market place. There is a risk that
the issuers of the securities may not be able to meet their obligations on
interest or principal payments at the time called for by an instrument.

Below Investment Grade Securities — Though the Funds’ portfolios are
expected to maintain an average credit quality of at least investment grade
quality, the Fund may have a portion of its assets invested in securities
rated below investment grade, such as those rated Ba or lower by Moody’s
and BB or lower by S&P or Fitch or securities comparably rated by other
rating agencies, or in unrated securities determined by BlackRock Advisors,
LLC (the “Manager”) to be of comparable quality. Securities rated Ba by
Moody’s are judged to have speculative elements, their future cannot be
considered as well assured and often the protection of interest and princi-
pal payments may be very moderate. Securities rated BB by S&P or Fitch
are regarded as having predominantly speculative characteristics and, while
such obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.
Securities rated C are regarded as having extremely poor prospects of ever
attaining any real investment standing. Securities rated D are in default
and the payment of interest and/or repayment of principal is in arrears.
When the Manager believes it to be in the best interests of the Funds’ share-
holders, the Funds will reduce their investment in lower grade securities.

Bank Loans — The Fund may invest in bank loans denominated in US and
foreign currencies that are originated, negotiated and structured by a syn-
dicate of lenders (“Co-Lenders”) consisting of commercial banks, thrift
institutions, insurance companies, financial companies or other financial
institutions one or more of which administers the security on behalf of the
syndicate (the “Agent Bank”). Co-Lenders may sell such securities to third
parties called “Participants.” The Fund may invest in such securities either
by participating as a Co-Lender at origination or by acquiring an interest
in the security from a Co-Lender or a Participant (collectively, “Participation
Interests”). Co-Lenders and Participants interposed between the Fund and
the corporate borrower (the “Borrower”), together with Agent Banks, are
referred herein as “Intermediate Participants.” The Fund also may purchase a
participation interest in a portion of the rights of an Intermediate Participant,
which would not establish any direct relationship between the Fund and
the Borrower. In such cases, the Fund would be required to rely on the

Intermediate Participant that sold the participation interest not only for
the enforcement of the Fund’s rights against the Borrower but also for the
receipt and processing of payments due to the Fund under the security.
Because it may be necessary to assert through an Intermediate Participant
such rights as may exist against the Borrower, in the event the Borrower
fails to pay principal and interest when due, the Fund may be subject to
delays, expenses and risks that are greater than those that would be
involved if the Fund could enforce its rights directly against the Borrower.
Moreover, under the terms of a Participation Interest, the Fund may be
regarded as a creditor of the Intermediate Participant (rather than of the
Borrower), so that the Fund may also be subject to the risk that the Inter-
mediate Participant may become insolvent. Similar risks may arise with
respect to the Agent Bank if, for example, assets held by the Agent Bank
for the benefit of the Fund were determined by the appropriate regulatory
authority or court to be subject to the claims of the Agent Bank’s creditors.
In such case, the Fund might incur certain costs and delays in realizing
payment in connection with the Participation Interest or suffer a loss of
principal and/or interest. Further, in the event of the bankruptcy or insol-
vency of the Borrower, the obligation of the Borrower to repay the loan may
be subject to certain defenses that can be asserted by such Borrower as a
result of improper conduct by the Agent Bank or Intermediate Participant.

Convertible Bonds — The Fund may invest in convertible bonds. A convertible
bond is a bond that may be converted into or exchanged for a prescribed
amount of common stock or other equity security of the same or a different
issuer within a particular period of time at a specified price or formula. A
convertible bond entitles the holder to receive interest paid or accrued on
debt until the convertible bond matures or is redeemed, converted or
exchanged. Before conversion, convertible bonds have characteristics simi-
lar to nonconvertible income securities in that they ordinarily provide a sta-
ble stream of income with generally higher yields than those of common
stocks of the same or similar issuers, but lower yields than comparable
nonconvertible bonds. The value of a convertible bond is influenced by
changes in interest rates, with investment value declining as interest rates
increase and increasing as interest rates decline. The credit standing of the
issuer and other factors also may have an effect on the convertible bond’s
investment value. Convertible bonds rank senior to common stock in a cor-
poration’s capital structure but are usually subordinated to comparable
nonconvertible bonds. Convertible bonds may be subject to redemption at
the option of the issuer at a price established in the convertible bond’s
governing instrument.

Credit Derivatives — The Fund may engage in credit derivative transactions.
There are two broad categories of credit derivatives: default price risk
derivatives and market spread derivatives. Default price risk derivatives are
linked to the price of reference securities or loans after a default by the
issuer or borrower, respectively. Market spread derivatives are based on the
risk that changes in market factors, such as credit spreads, can cause a
decline in the value of a security, loan or index. There are three basic trans-
actional forms for credit derivatives: swaps, options and structured instru-
ments. The Fund may use credit default swaps. A credit default swap is an
agreement between two counterparties that allows one counterparty (the
“seller”) to purchase or be “long” a third party’s credit risk and the other
party (the “buyer”) to sell or be “short” the credit risk. Typically, the seller

ANNUAL REPORT OCTOBER 31, 2009 71

Additional Information (continued)

General Information (continued)

agrees to make regular fixed payments to the buyer with the same fre-
quency as the underlying reference bond. In exchange, the seller typically
has the right upon default of the underlying bond to put the bond to the
buyer in exchange for the bond’s par value plus interest. Credit default
swaps can be used as a substitute for purchasing or selling a credit secu-
rity and sometimes are preferable to actually purchasing the security. The
Fund does not intend to leverage its investments through the use of credit
default swaps. A purchaser of a credit default swap is subject to counter-
party risk. The Fund will monitor any such swaps or derivatives with a view
towards ensuring that the Fund remains in compliance with all applicable
regulatory, investment policy and tax requirements.

Risks

As a result of the Fund’s portfolio restructuring and revisions to certain of
its non-fundamental investment policies, your investment in the Fund will
be subject to the following additional risks following the transition:

Credit Risk — Credit risk is the risk that one or more debt securities in the
Fund’s portfolio will decline in price or fail to pay interest or principal when
due because the issuer of the security experiences a decline in its financial
status. If the recent adverse conditions in the credit markets adversely
affect the broader economy, the credit quality of issuers of credit securities
in which the Fund may invest would be more likely to decline, all other
things being equal. While a senior position in the capital structure of a bor-
rower may provide some protection with respect to the Fund’s investments
in senior secured floating rate and fixed rate loans or debt, losses may still
occur. To the extent the Fund invests in below investment grade securities, it
will be exposed to a greater amount of credit risk than a Fund which invests
in investment grade securities. The prices of lower grade securities are more
sensitive to negative developments, such as a decline in the issuer’s rev-
enues or a general economic downturn, than are the prices of higher grade
securities. Securities of below investment grade quality are predominantly
speculative with respect to the issuer’s capacity to pay interest and repay
principal when due and therefore involve a greater risk of default. In addi-
tion, the Fund’s use of credit derivatives will expose it to additional risk in
the event that the bonds underlying the derivatives default.

Interest Rate Risk — The value of certain debt securities in the Fund’s port-
folio could be affected by interest rate fluctuations. When interest rates
decline, the value of fixed rate securities can be expected to rise. Con-
versely, when interest rates rise, the value of fixed rate securities can be
expected to decline. Recent adverse conditions in the credit markets may
cause interest rates to rise. Although changes in prevailing interest rates
can be expected to cause some fluctuations in the value of floating rate
securities (due to the fact that rates only reset periodically), the values of
these securities are substantially less sensitive to changes in market inter-
est rates than fixed rate instruments. Fluctuations in the value of the Fund’s
securities will not affect interest income on existing securities, but will be
reflected in the Fund’s net asset value. The Fund may utilize certain strate-
gies, including taking positions in futures or interest rate swaps, for the pur-
pose of reducing the interest rate sensitivity of the portfolio and decreasing
the Fund’s exposure to interest rate risk, although there is no assurance
that it will do so or that such strategies will be successful.

Prepayment Risk — During periods of declining interest rates, borrowers
may exercise their option to prepay principal earlier than scheduled. For
fixed rate securities, such payments often occur during periods of declin-
ing interest rates, forcing the Fund to reinvest in lower yielding securities,
resulting in a possible decline in the Fund’s income and distributions to
shareholders. This is known as prepayment or “call” risk. Below investment
grade securities frequently have call features that allow the issuer to redeem
the security at dates prior to its stated maturity at a specified price (typi-
cally greater than par) only if certain prescribed conditions are met (“call
protection”). An issuer may redeem a below investment grade security if,
for example, the issuer can refinance the debt at a lower cost due to declin-
ing interest rates or an improvement in the credit standing of the issuer.
Certain of the Fund’s investments will not have call protection. For premium
bonds (bonds acquired at prices that exceed their par or principal value)
purchased by the Fund, prepayment risk may be enhanced.

Below Investment Grade Risk — The Fund may invest a substantial portion
of its assets in fixed income securities that are rated below investment
grade, which are commonly referred to as “junk bonds” and are regarded
as predominately speculative with respect to the issuer’s capacity to pay
interest and repay principal.

Lower grade securities may be particularly susceptible to economic down-
turns. It is likely that a prolonging of the current economic recession or a
future economic recession could disrupt severely the market for such secu-
rities and may have an adverse impact on the value of such securities. In
addition, it is likely that any such continuing or future economic downturn
could adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.

Lower grade securities, though high yielding, are characterized by high risk.
They may be subject to certain risks with respect to the issuing entity and
to greater market fluctuations than certain lower yielding, higher rated
securities. The retail secondary market for lower grade securities may be
less liquid than that for higher rated securities. Adverse conditions could
make it difficult at times for the Fund to sell certain securities or could
result in lower prices than those used in calculating the Fund’s net asset
value. Because of the substantial risks associated with investments in lower
grade securities, you could lose money on your investment in common
shares of the Fund, both in the short-term and the long-term.

Bank Loan Risk — As in the case of junk bonds, bank loans may be rated
in lower grade rating categories, or may be unrated but of lower grade qual-
ity. As in the case of junk bonds, bank loans can provide higher yields than
higher grade income securities, but are subject to greater credit and other
risks. Although bank loan obligations often are secured by pledges of
assets by the borrower and have other structural aspects intended to pro-
vide greater protection to the holders of bank loans than the holders of
unsecured and subordinated securities, there are also additional risks in
holding bank loans. In particular, the secondary trading market for bank
loans is not well developed, and therefore, bank loans present increased
market risk relating to liquidity and pricing concerns. In addition, there is

72 ANNUAL REPORT OCTOBER 31, 2009

Additional Information (continued)

General Information (concluded)

no assurance that the liquidation of the collateral would satisfy the claims
of the borrower’s obligations in the event of the nonpayment of scheduled
interest or principal, or that the collateral could be readily liquidated. As
a result, the Fund might not receive payments to which it is entitled and
thereby may experience a decline in the value of its investment and its
net asset value.

Convertible Bonds Risk — Although to a lesser extent than with fixed-income
securities, the market value of convertible bonds tends to decline as inter-
est rates increase and, conversely, tends to increase as interest rates
decline. In addition, because of the conversion feature, the market value
of convertible bonds tends to vary with fluctuations in the market value of
the underlying common stock. A unique feature of convertible bonds is that
as the market price of the underlying common stock declines, convertible
bonds tend to trade increasingly on a yield basis, and so may not experi-
ence market value declines to the same extent as the underlying common
stock. When the market price of the underlying common stock increases,
the prices of the convertible bonds tend to rise as a reflection of the value
of the underlying common stock. While no securities investments are with-
out risk, investments in convertible bonds generally entail less risk than
investments in common stock of the same issuer.

Credit Derivatives Risk — The use of credit derivatives is a highly specialized
activity which involves strategies and risks different from those associated
with ordinary portfolio security transactions. If the Manager is incorrect in its
forecasts of default risks, market spreads or other applicable factors, the
investment performance of the Fund would diminish compared with what it
would have been if these techniques were not used. Moreover, even if the
Manager is correct in its forecasts, there is a risk that a credit derivative posi-
tion may correlate imperfectly with the price of the asset or liability being
protected. The Fund’s risk of loss in a credit derivative transaction varies with
the form of the transaction. For example, if the Fund purchases a default
option on a security, and if no default occurs with respect to the security, the
Fund’s loss is limited to the premium it paid for the default option. In con-
trast, if there is a default by the grantor of a default option, the Fund’s loss
will include both the premium that it paid for the option and the decline in
value of the underlying security that the default option protected.

Other than the revisions discussed above, there were no material changes
in the Funds’ investment objectives or policies or to the Funds’ charters or
by-laws 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.

BGT

During the period, the Board of BGT approved a change to the Fund’s name
from “BlackRock Global Floating Rate Income Trust” to “BlackRock Floating
Rate Income Trust.”

Quarterly performance, semi-annual and annual reports and other informa-
tion 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 regard-
ing the Funds and does not, and is not intended to, incorporate BlackRock’s
website into 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 state-
ments, 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 it 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 other-
wise. If you do not want the mailing of these documents to be combined
with those for other members of your household, please contact the Funds
at (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (“SEC”) for the first and third quar-
ters of each fiscal year on Form N-Q. Each Fund’s 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 the operation of the Public Reference Room may be obtained by calling
(202) 551-8090. Each Fund’s 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 deter-
mine how to vote proxies relating to portfolio securities is available (1) with-
out charge, upon request, by calling toll-free (800) 441-7762; (2) at
www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

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

ANNUAL REPORT OCTOBER 31, 2009 73

Additional Information (concluded)                
      Section 19(a) Notices                  
These 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 regula-  
tions. 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.                  
October 31, 2009                  
    Total Cumulative Distributions     % Breakdown of the Total Cumulative  
    for the Fiscal Year       Distributions for the Fiscal Year    
  Net   Net Realized     Total Per   Net   Net Realized     Total Per  
  Investment   Capital   Return of   Common   Investment   Capital   Return of   Common  
  Income   Gains   Capital   Share   Income   Gains   Capital   Share  
PSW   $0.814362   $ —   $0.141238   $0.955600   85%   0%   15%   100%  
PSY   $1.033169   $ —   $0.083912   $1.117081   92%   0%   8%   100%  
BPP   $1.075354   $ —   $0.102146   $1.177500   91%   0%   9%   100%  
BTZ.   $0.934658   $ —   $0.475342   $1.410000   66%   0%   34%   100%  
CII   $0.329222   $ —   $1.610778   $1.940000   17%   0%   83%   100%  
BGT   $1.379018   $ —   $0.233111   $1.612129   86%   0%   14%   100%  
Each Fund estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be  
a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in a Fund is returned to the shareholder.  
A return of capital does not necessarily reflect a Fund’s investment performance and should not be confused with ‘yield’ or ‘income.      

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former
fund investors and individual clients (collectively, “Clients”) and to safe-
guarding their non-public personal information. The following information is
provided to help you understand what personal information BlackRock col-
lects, 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 applica-
tions, 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 pro-
cedures relating to the proper storage and disposal of such information.

74 ANNUAL REPORT OCTOBER 31, 2009


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. PSW, PSY, BPP, BTZ and BGT 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.


Item 2 – Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the
period covered by this report, applicable to the registrant’s principal executive officer, principal
financial officer and principal accounting officer, or persons performing similar functions. During
the period covered by this report, there have been no amendments to or waivers granted under the
code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.

Item 3 – Audit Committee Financial Expert – The registrant’s board of directors or trustees, as applicable
(the “board of directors”) has determined that (i) the registrant has the following audit committee
financial experts serving on its audit committee and (ii) each audit committee financial expert is
independent:
Kent Dixon
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify
as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

Prof. Kester has a thorough understanding of generally accepted accounting principles, financial
statements and internal control over financial reporting as well as audit committee functions. Prof.
Kester has been involved in providing valuation and other financial consulting services to corporate
clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of
complexity of accounting issues that are generally comparable to the breadth and complexity of
issues that can reasonably be expected to be raised by the registrant’s financial statements.

Ms. Robards has a thorough understanding of generally accepted accounting principles, financial
statements and internal control over financial reporting as well as audit committee functions. Ms.
Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms.
Robards was formerly an investment banker for more than 10 years where she was responsible for
evaluating and assessing the performance of companies based on their financial results. Ms.
Robards has over 30 years of experience analyzing financial statements. She also is a member of
the audit committee of one publicly held company and a non-profit organization.

Under applicable securities laws, a person determined to be an audit committee financial expert will
not be deemed an “expert” for any purpose, including without limitation for the purposes of Section
11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee
financial expert. The designation or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and
liabilities imposed on such person as a member of the audit committee and board of directors in the
absence of such designation or identification.

Item 4 – Principal Accountant Fees and Services            
            (a) Audit Fees     (b) Audit-Related Fees 1               (c) Tax Fees 2         (d) All Other Fees 3  
  Current   Previous   Current   Previous   Current   Previous   Current   Previous  
  Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year  
      Entity Name   End   End   End   End   End   End   End   End  
BlackRock Credit                  
Allocation Income   $47,700   $45,500   $3,500   $3,500   $6,100   $6,100   $1,028   $1,049  
Trust IV                  

1 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial
statements not included in Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax planning.
3 The nature of the services include a review of compliance procedures and attestation thereto.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant’s audit committee (the “Committee”) has adopted policies and procedures with
regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to
the registrant on an annual basis require specific pre-approval by the Committee. The Committee
also must approve other non-audit services provided to the registrant and those non-audit services
provided to the registrant’s affiliated service providers that relate directly to the operations and the
financial reporting of the registrant. Certain of these non-audit services that the Committee believes
are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services
that will not impair the independence of the independent accountants may be approved by the
Committee without consideration on a specific case-by-case basis (“general pre-approval”). The
term of any general pre-approval is 12 months from the date of the pre-approval, unless the
Committee provides for a different period. Tax or other non-audit services provided to the registrant
which have a direct impact on the operation or financial reporting of the registrant will only be
deemed pre-approved provided that any individual project does not exceed $10,000 attributable to
the registrant or $50,000 for all of the registrants the Committee oversees. For this purpose,
multiple projects will be aggregated to determine if they exceed the previously mentioned cost
levels.
Any proposed services exceeding the pre-approved cost levels will require specific pre-
approval by the Committee, as will any other services not subject to general pre-approval (e.g.,
unanticipated but permissible services). The Committee is informed of each service approved
subject to general pre-approval at the next regularly scheduled in-person board meeting. At this
meeting, an analysis of such services is presented to the Committee for ratification. The Committee
may delegate to one or more of its members the authority to approve the provision of and fees for
any specific engagement of permitted non-audit services, including services exceeding pre-approved
cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) Affiliates’ Aggregate Non-Audit Fees:

  Current Fiscal Year   Previous Fiscal Year  
Entity Name   End   End  

BlackRock Credit Allocation      
Income Trust IV   $418,128   $415,649  

(h) The registrant’s audit committee has considered and determined that the provision of non-audit
services that were rendered to the registrant’s investment adviser (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by
the registrant’s investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the registrant that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant’s independence.

Regulation S-X Rule 2-01(c)(7)(ii) – $407,500, 0%

Item 5 – Audit Committee of Listed Registrants – The following individuals are members of the registrant’s
separately-designated standing audit committee established in accordance with Section 3(a)(58)(A)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

Kent Dixon
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)

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 – The board of directors has delegated the voting of proxies for the Fund securities to the
Fund’s investment adviser (“Investment Adviser”) pursuant to the Investment Adviser’s proxy
voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund
securities in the best interests of the Fund and its stockholders. From time to time, a vote may
present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the
Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In
such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee,
or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or
material non-routine matter and if the Oversight Committee does not reasonably believe it is able to
follow its general voting guidelines (or if the particular proxy matter is not addressed in the
guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to
advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment
Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or
does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall
determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio
Management Group and/or the Investment Adviser’s Legal and Compliance Department and
concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the

Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on
how the Fund voted proxies relating to portfolio securities during the most recent 12-month period
ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website
at http://www.sec.gov .

Item 8 – Portfolio Managers of Closed-End Management Investment Companies – as of October 31, 2009.

(a)(1) The registrant (or “Fund”) is managed by a team of investment professionals led by John
Burger, Managing Director at BlackRock. Mr. Burger is a member of BlackRock’s fixed
income portfolio management group and is primarily responsible for the day-to-day
management of the registrant’s portfolio and the selection of its investments. Mr. Burger has
been a member of the registrant’s portfolio management team since 2006.

              Portfolio Manager   Biography          
              John Burger     Managing Director of BlackRock, Inc. since 2006; Managing Director of  
    Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2004 to 2006.  
              (a)(2) As of October 31, 2009:          
  (ii) Number of Other Accounts Managed   (iii) Number of Other Accounts and  
  and Assets by Account Type   Assets for Which Advisory Fee is  
          Performance-Based    
  Other   Other Pooled     Other   Other Pooled    
(i) Name of   Registered   Investment   Other   Registered   Investment   Other  
Portfolio Manager   Investment   Vehicles   Accounts   Investment   Vehicles   Accounts  
  Companies       Companies      
John Burger   4   2   56   0   0   0  
  $1.10 Billion   $102 Million   $11.28 Billion   $0   $0   $0  
              (iv) Potential Material Conflicts of Interest        

BlackRock and its affiliates (collectively, herein “BlackRock”) has built a professional working
environment, firm-wide compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over another. BlackRock has adopted
policies and procedures that address the allocation of investment opportunities, execution of
portfolio transactions, personal trading by employees and other potential conflicts of interest that are
designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous clients in addition to the Fund,
and BlackRock may, consistent with applicable law, make investment recommendations to other
clients or accounts (including accounts which are hedge funds or have performance or higher fees
paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such
fees), which may be the same as or different from those made to the Fund. In addition, BlackRock,
its affiliates and significant shareholders and any officer, director, stockholder or employee may or
may not have an interest in the securities whose purchase and sale BlackRock recommends to the
Fund. BlackRock, or any of its affiliates or significant shareholders, or any officer, director,
stockholder, employee or any member of their families may take different actions than those
recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock
may refrain from rendering any advice or services concerning securities of companies of which any
of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are

directors or officers, or companies as to which BlackRock or any of its affiliates or significant
shareholders or the officers, directors and employees of any of them has any substantial economic
interest or possesses material non-public information. Each portfolio manager also may manage
accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. In
this connection, it should be noted that a portfolio manager may currently manage certain accounts
that are subject to performance fees. In addition, a portfolio manager may assist in managing certain
hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and
a portion of such incentive fees may be voluntarily or involuntarily deferred. Additional portfolio
managers may in the future manage other such accounts or funds and may be entitled to receive
incentive fees.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly.
When BlackRock purchases or sells securities for more than one account, the trades must be
allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate
investments in a fair and equitable manner among client accounts, with no account receiving
preferential treatment. To this end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among client accounts over time. This
policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with
sufficient flexibility to allocate investments in a manner that is consistent with the particular
investment discipline and client base.

(a)(3) As of October 31, 2009:

Portfolio Manager Compensation Overview

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and
its career path emphasis at all levels reflect the value senior management places on key resources.
Compensation may include a variety of components and may vary from year to year based on a
number of factors. The principal components of compensation include a base salary, a performance-
based discretionary bonus, participation in various benefits programs and one or more of the
incentive compensation programs established by BlackRock such as its Long-Term Retention and
Incentive Plan.

Base compensation. Generally, portfolio managers receive base compensation based on their
seniority and/or their position with the firm. Senior portfolio managers who perform additional
management functions within the portfolio management group or within BlackRock may receive
additional compensation for serving in these other capacities.

Discretionary Incentive Compensation
Discretionary incentive compensation is a function of several components: the performance of
BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the
investment performance, including risk-adjusted returns, of the firm’s assets under management or
supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s
seniority, role within the portfolio management team, teamwork and contribution to the overall
performance of these portfolios and BlackRock. In most cases, including for the portfolio managers
of the Fund, these benchmarks are the same as the benchmark or benchmarks against which the
performance of the Fund or other accounts managed by the portfolio managers are measured.

BlackRock’s Chief Investment Officers determine the benchmarks against which the performance of
funds and other accounts managed by each portfolio manager is compared and the period of time
over which performance is evaluated. With respect to the portfolio manager, such benchmarks for
the Fund include a combination of certain fund industry peer groups.

BlackRock’s Chief Investment Officers make a subjective determination with respect to the
portfolio manager’s compensation based on the performance of the funds and other accounts
managed by each portfolio manager relative to the various benchmarks noted above. Performance is
measured on both a pre-tax and after-tax basis over various time periods including 1, 3, 5 and 10-
year periods, as applicable.

Distribution of Discretionary Incentive Compensation
Discretionary incentive compensation is distributed to portfolio managers in a combination of cash
and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The
BlackRock, Inc. restricted stock units, if properly vested, will be settled in BlackRock, Inc. common
stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of
total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts
compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability
to sustain and improve its performance over future periods.

Long-Term Retention and Incentive Plan (“LTIP”) — The LTIP is a long-term incentive
plan that seeks to reward certain key employees. Beginning in 2006, awards are granted under the
LTIP in the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the
attainment of certain performance goals, will be settled in BlackRock, Inc. common stock. Mr.
Burger has received awards under the LTIP.

Deferred Compensation Program — A portion of the compensation paid to eligible
BlackRock employees may be voluntarily deferred into an account that tracks the performance of
certain of the firm’s investment products. Each participant in the deferred compensation program is
permitted to allocate his deferred amounts among the various investment options. Mr. Burger has
participated in the deferred compensation program.

Other compensation benefits. In addition to base compensation and discretionary incentive
compensation, portfolio managers may be eligible to receive or participate in one or more of the
following:

Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings
plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the
BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan
(ESPP). The employer contribution components of the RSP include a company match equal to 50%
of the first 6% of eligible pay contributed to the plan capped at $4,000 per year, and a company
retirement contribution equal to 3-5% of eligible compensation. The RSP offers a range of
investment options, including registered investment companies managed by the firm. BlackRock
contributions follow the investment direction set by participants for their own contributions or,
absent employee investment direction, are invested into a balanced portfolio. The ESPP allows for
investment in BlackRock common stock at a 5% discount on the fair market value of the stock on

the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares or a
dollar value of $25,000. Each portfolio manager is eligible to participate in these plans.

(a)(4) Beneficial Ownership of Securities – October 31, 2009.

Portfolio Manager   Dollar Range of Equity Securities  
  Beneficially Owned  
John Burger   None  

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated
Purchasers – Not Applicable due to no such purchases during the period covered by this report.

Item 10 – Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and
Governance Committee will consider nominees to the board of directors recommended by
shareholders when a vacancy becomes available. Shareholders who wish to recommend a nominee
should send nominations that include biographical information and set forth the qualifications of the
proposed nominee to the registrant’s Secretary. There have been no material changes to these
procedures.

Item 11 – Controls and Procedures

11(a) – The registrant’s 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 13(a)-15(b) under the Securities
Exchange Act of 1934, as amended.

11(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

12(a)(1) – Code of Ethics – See Item 2

12(a)(2) – Certifications – Attached hereto

12(a)(3) – Not Applicable

12(b) – Certifications – Attached hereto

12(c) – Notices to the registrant’s common shareholders in accordance with Investment Company Act Section
19(a) and Rule 19a-1 1

1 The Trust has received exemptive relief from the Securities and Exchange Commission permitting it to make
periodic distributions of long-term capital gains with respect to its outstanding common stock as frequently as

twelve times each year, and as frequently as distributions are specified by or in accordance with the terms of
its outstanding preferred stock. This relief is conditioned, in part, on an undertaking by the Trust to make the
disclosures to the holders of the Trust’s common shares, in addition to the information required by Section
19(a) of the Investment Company Act and Rule 19a-1 thereunder. The Trust is likewise obligated to file with
the Commission the information contained in any such notice to shareholders and, in that regard, has attached
hereto copies of each such notice made during the period.

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 Credit Allocation Income Trust IV

By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer of
BlackRock Credit Allocation Income Trust IV

Date: December 21, 2009

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/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
BlackRock Credit Allocation Income Trust IV

Date: December 21, 2009

By: /s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Credit Allocation Income Trust IV

Date: December 21, 2009

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