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          As filed with the Securities and Exchange Commission on May 27, 2004
                                    Securities Act Registration No. 333-114662
                                 Investment Company Registration No. 811-21566


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM N-2

            Registration Statement under the Securities Act of 1933
                         Pre-Effective Amendment No. 1
                         Post-Effective Amendment No.
                                    and/or
                         Registration Statement Under
                      The Investment Company Act of 1940
                                Amendment No. 1


                  BlackRock Global Floating Rate Income Trust
        (Exact Name of Registrant as Specified in Declaration of Trust)


                             100 Bellevue Parkway
                          Wilmington, Delaware 19809
                   (Address of Principal Executive Offices)


                                (888) 825-2257
             (Registrant's Telephone Number, Including Area Code)


                           Anne Ackerley, President
                  BlackRock Global Floating Rate Income Trust
                              40 East 52nd Street
                           New York, New York 10022
                    (Name and Address of Agent for Service)


                                  Copies to:

                           Michael K. Hoffman, Esq.
                   Skadden, Arps, Slate, Meagher & Flom LLP
                               Four Times Square
                           New York, New York 10036

         Approximate Date of Proposed Public Offering: As soon as practicable
after the effective date of this Registration Statement.

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                         CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

                                                               Proposed       Proposed Maximum
                                          Amount Being     Maximum Offering      Aggregate           Amount of
Title of Securities Being Registered       Registered       Price per Unit    Offering Price(1)   Registration Fee
------------------------------------       ----------       --------------    -----------------   ----------------

<S>                                     <C>                     <C>              <C>                <C>
Common Shares, $.001 par value......... 1,000,000 shares        $15.00           $1,500,000         $190.05(2)

(1) Estimated solely for the purpose of calculating the registration fee.
(2) $190.05 previously paid

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.



<PAGE>


[FLAG]

The information contained in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.



PROSPECTUS

                             Subject to Completion
                 Preliminary Prospectus dated         , 2004

                                    Shares

                  BlackRock Global Floating Rate Income Trust
                                 Common Shares
                               $15.00 per share

Investment Objectives. BlackRock Global Floating Rate Income Trust (the
"Trust") is a newly organized, diversified, closed-end management investment
company. The Trust's investment objective is to provide a high level of
current income. The Trust, as a secondary objective, also seeks the
preservation of capital to the extent consistent with its primary objective of
high current income.

Investment Advisor. The Trust's portfolio will be managed by BlackRock
Advisors, Inc., the Trust's investment advisor, and BlackRock Financial
Management, Inc., the Trust's sub-advisor (collectively, "BlackRock").

Portfolio Contents. The Trust pursues its investment objectives by investing
in a global portfolio of floating rate securities. The Trust will invest at
least 80% of its Managed Assets (as defined herein) in U.S. and non-U.S.
senior, secured floating rate loans made to corporate and other business
entities and other variable and floating rate instruments. The Trust may also
invest up to 20% of its Managed Assets in other securities including emerging
markets debt, corporate debt and mortgage-backed and asset-backed securities.
Under normal market conditions, the Trust will invest at least __% of its
Managed Assets (as defined herein) in securities of non-U.S. issuers.

         The Trust anticipates that, under current market conditions,
substantially all of its portfolio will consist of below investment grade debt
securities. Non-investment grade securities, commonly referred to as "junk
bonds," are bonds that are rated below investment grade by each of the national
rating agencies cover the security, or, if unrated, are determined to be of
comparable quality by BlackRock. Standard & Poor's Ratings Group, a division of
The McGraw-Hill Companies, Inc. ("S&P"), and Fitch Ratings ("Fitch") consider
securities rated below BBB-- to be below investment grade and Moody's Investors
Service, Inc. ("Moody's") considers securities rated below Baa3 to be below
investment grade. Securities of below investment grade quality are regarded as
having predominately speculative characteristics with respect to issuer's
capacity to pay interest and repay principal. The Trust's strategies may result
in an above average amount of risk and volatility or loss of principal. The
Trust cannot ensure that it will achieve its investment objectives. Because of
the protective features of senior loans (being both senior in a borrower's
capital structure and secured by specific collateral), BlackRock believes,
based on its experience, that senior loans tend to have more favorable loss
recovery rates compared to most other types of below investment grade
obligations which are subordinated and unsecured.

No Prior History. Because the Trust is newly organized, its shares have no
history of public trading. Shares of closed-end investment companies
frequently trade at a discount from their net asset value. This risk may be
greater for investors expecting to sell their shares in a relatively short
period after completion of the public offering. The Trust's common shares are
expected to be listed on the New York Stock Exchange under the symbol " ".

Borrowing. The Trust currently anticipates borrowing funds and/or issuing
preferred shares in an aggregate amount of approximately 35% of its Managed
Assets to buy additional securities. This practice is known as "leverage." The
Trust may borrow from banks or other financial institutions. The Trust may
also borrow through reverse repurchase agreements, dollar rolls and through
the issuance of preferred shares. The use of preferred shares and other
borrowing techniques to leverage the common shares can create risks.

         Before buying any common shares you should read the discussion of the
material risks of investing in the Trust in "Risks" beginning on page .
Certain of these risks are summarized in "Prospectus Summary -- Special Risk
Considerations" beginning on page   .

                                                           Per Share  Total (1)
Price offering price....................................     $15.00       $
Sales load..............................................     $            $
Estimated organizational and offering expenses (2)......     $            $
Proceeds, after expenses, to the Trust..................     $            $

(1)  The Trust has granted the underwriters an option to purchase up to
     additional common shares at the public offering price, less the sales
     load, within 45 days of the date of this prospectus solely to cover
     over-allotments, if any. If such option is exercised in full, the total
     price to the public, sales load, estimated offering and organizational
     expenses and proceeds to the Trust will be $     , $         , $
     and $      , respectively. See "Underwriting."

(2)  The Trust will pay organizational expenses and offering costs of the
     Trust (other than the sales load) up to an aggregate of $ per share of
     the Trust's common shares. BlackRock Advisors, Inc. has agreed to pay such
     organizational expenses and offering costs of the Trust to the extent
     they exceed $      per share of the Trust's common shares. The aggregate
     organizational expenses and offering costs to be incurred by the Trust
     are estimated to be $          (including amounts incurred by BlackRock
     Advisors, Inc. on behalf of the Trust).

                 The date of this Prospectus is          , 2004.


<PAGE>




         Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.

         You should read this prospectus, which contains important information
about the Trust, before deciding whether to invest, and retain it for future
reference. A Statement of Additional Information, dated , 2004, containing
additional information about the Trust, has been filed with the Securities and
Exchange Commission and is incorporated by reference in its entirety into this
prospectus. You can review the table of contents of the Statement of
Additional Information on page of this prospectus. You may request a free copy
of the Statement of Additional Information by calling (888) 825-2257 or by
writing to the Trust, or obtain a copy (and other information regarding the
Trust) from the Securities and Exchange Commission's web site
(http://www.sec.gov).

         You should rely only on the information contained or incorporated by
reference in this prospectus. The Trust has not, and the underwriters have
not, authorized any other person to provide you with different or inconsistent
information. If anyone provides you with different or inconsistent
information, you should not rely on it. The Trust is not, and the underwriters
are not, making an offer to sell these securities in any jurisdiction where
the offer or sale is not permitted. You should assume that the information in
this prospectus is accurate only as of the date of this prospectus, and the
Trust's business, financial condition and prospects may have changed since
that date.

         The Trust's common shares do not represent a deposit or obligation
of, and are not guaranteed or endorsed by, any bank or other insured
depository institution, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board or any other government
agency.

         Until           , 2004 (25 days after the date of this prospectus),
all dealers that buy, sell or trade the common shares, whether or not
participating in this offering, may be required to deliver a prospectus. This
is in addition to the dealers' obligation to deliver a prospectus when acting
as underwriters and with respect to their unsold allotments or subscriptions.



<PAGE>


                               TABLE OF CONTENTS

                                                                         Page
                                                                         ----

PROSPECTUS SUMMARY.........................................................1
SUMMARY OF TRUST EXPENSES.................................................10
THE TRUST.................................................................11
USE OF PROCEEDS...........................................................11
THE TRUST'S INVESTMENTS...................................................12
PORTFOLIO SECURITIES......................................................13
BORROWINGS AND PREFERRED SHARES...........................................19
RISKS    .................................................................21
HOW THE TRUST MANAGES RISK................................................27
MANAGEMENT OF THE TRUST...................................................27
NET ASSET VALUE...........................................................29
DISTRIBUTIONS.............................................................29
DIVIDEND REINVESTMENT PLAN................................................30
DESCRIPTION OF SHARES.....................................................31
CERTAIN PROVISIONS IN THE AGREEMENT AND DECLARATION OF TRUST..............33
CLOSED-END TRUST STRUCTURE................................................35
REPURCHASE OF SHARES......................................................35
FEDERAL INCOME TAX MATTERS................................................36
UNDERWRITING..............................................................37
CUSTODIAN AND TRANSFER AGENT..............................................38
LEGAL OPINIONS............................................................38
PRIVACY PRINCIPLES OF THE TRUST...........................................38
TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION.............40


<PAGE>



                              PROSPECTUS SUMMARY

         This is only a summary. This summary may not contain all of the
information that you should consider before investing in our common shares.
You should review the more detailed information contained in this prospectus
and in the Statement of Additional Information.

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<S>                                        <C>
THE TRUST                                  BlackRock Global Floating Rate Income Trust is a newly organized,
                                           diversified, closed-end management investment company. Throughout the
                                           prospectus, we refer to BlackRock Global Floating Rate Income Trust simply
                                           as the "Trust" or as "we," "us" or "our." See "The Trust." The Trust offers
                                           investors the opportunity to receive a high level of current income,
                                           through a professionally managed portfolio investing a global portfolio of
                                           floating rate securities including a significant portion of its assets in
                                           senior, secured floating rate loans ("Senior Loans"), which are normally
                                           accessible only to financial institutions and large corporate and
                                           institutional investors, and are not widely available to individual
                                           investors. To the extent consistent with this primary goal, the Trust will
                                           offer an opportunity for preservation of capital. Investments are based on
                                           BlackRock's internal research and ongoing credit analysis which is generaly
                                           not available to individual investors. An investment in the Trust may not
                                           be appropriate for all investors. There is no assurance that the Trust will
                                           achieve its investment objectives.

THE OFFERING                               The Trust is offering      common shares of beneficial interest at $15.00 per
                                           share through a group of underwriters (the "Underwriters") led by        . The
                                           common shares of beneficial interest are called "common shares" in the rest
                                           of this prospectus. You must purchase at least 100 common shares ($1,500)
                                           in order to participate in this offering. The Trust has given the
                                           Underwriters an option to purchase up to      additional common shares to
                                           cover orders in excess of          common shares. BlackRock has agreed to pay
                                           organizational expenses and offering costs (other than sales load) that
                                           exceed $         per share. See "Underwriting."

INVESTMENT OBJECTIVE                       The Trust's investment objective is to provide a high level of current
                                           income. The Trust, as a secondary objective, also seeks the preservation of
                                           capital to the extent consistent with its primary objective of high current
                                           income. The Trust will pursue its objectives by investing in a global
                                           portfolio of floating rate securities including investing a significant portion
                                           of its assets in Senior Loans. Investment in such floating rate instruments
                                           is expected to minimize changes in the underlying principal value of the
                                           Senior Loans, and therefore the Trust's net asset value, resulting from
                                           changes in market interest rates. Senior Loans are made to corporations,
                                           partnerships and other business entities which operate in various
                                           industries and geographical regions. Senior Loans pay interest at rates
                                           which are redetermined periodically by reference to a basic lending rate,
                                           primarily the London-Interbank Offered Rate ("LIBOR"), plus a premium. No
                                           assurance can be given that the Trust will achieve its investment
                                           objectives.

INVESTMENT POLICIES                        The Trust will pursue its objective by investing primarily in U.S. and
                                           non-U.S. Senior Loans and other variable and floating rate instruments
                                           ("Variable Debt").

                                           Under the normal conditions, the Trust will invest at least 80% of its
                                           Managed Assets in securities with a variable or floating interest rate
                                           feature such as Senior Loans and Variable Debt. The Trust will provide
                                           shareholders with notice at least 60 days prior to changing this
                                           non-fundamental policy of the Trust unless such change was previously
                                           approved by shareholders. The Trust may also invest up to 20% of its
                                           Managed Assets in other securities and instruments such as corporate bonds
                                           and mortgage-related and asset-backed securities.

                                           The Trust currently expects that the average effective duration of its
                                           portfolio will initially be less than __ years, although this target
                                           duration may change from time to time. See "The Trust's Investments."

                                           The Trust anticipates that, under current market conditions, substantially
                                           all of its portfolio will consist of below investment grade debt
                                           securities. See "Risks-Non-Investment Grade Securities". For this purpose,
                                           when a security is rated by more than one of these ratings agencies,
                                           BlackRock generally will use the highest rating, and if a security is
                                           unrated, it will be treated as having a credit rating as determined by
                                           BlackRock. Within this general guideline, the Trust may invest in
                                           individual securities of any credit quality.

                                           Under normal market conditions, the Trust will invest at least ____% of its
                                           Managed Assets in non-U.S. securities. The Trust may invest up to __% of
                                           its Managed Assets in securities of emerging markets issuers. The Trust
                                           will generally invest in U.S. dollar denominated securities or in non U.S.
                                           dollar-denominated securities for which currency exchange exposure versus
                                           the U.S. dollar has been hedged. However, the Trust may invest up to 10% of
                                           its Managed Assets in non-U.S. dollar denominated securities whose currency
                                           exchange exposure versus the U.S. dollar remains unhedged. Foreign and
                                           emerging markets investing may entail significant risks. See "Risks --
                                           Non-U.S. Securities Risk" and "Risks-Emerging Markets Risks."

INVESTMENT STRATEGY                        BlackRock applies the same controlled-duration, active relative value
                                           sector rotation style to the management of all its fixed income mandates.
                                           BlackRock manages fixed income portfolios by using a strategy that invests
                                           in sectors of the fixed income market that BlackRock believes are
                                           undervalued by moving out of sectors that BlackRock believes are fairly or
                                           overvalued. BlackRock researches and is active in analyzing the sectors
                                           which it believes are under, fairly and overvalued in order to achieve a
                                           portfolio's investment objective. BlackRock has in-depth expertise in all
                                           sectors of the fixed income market. BlackRock specializes in managing fixed
                                           income portfolios against both published and customized benchmarks and has
                                           been doing this since the inception of its fixed income products in 1988.

                                           In selecting securities for the Trust's portfolio, BlackRock will seek to
                                           identify issuers and industries that BlackRock believes are likely to
                                           experience stable or improving financial conditions. BlackRock believes
                                           this strategy should enhance the Trust's ability to seek total return.
                                           BlackRock's analysis includes:

                                           o    credit research on the issuers' financial strength;
                                           o    assessment of the issuers' ability to meet principal and interest
                                                payments;
                                           o    general industry trends;
                                           o    the issuers' managerial strength;
                                           o    changing financial conditions;
                                           o    borrowing requirements or debt maturity schedules; and
                                           o    the issuers' responsiveness to change in business conditions and
                                                interest rates.

                                           BlackRock considers relative values among issuers based on anticipated cash
                                           flow, interest or dividend coverage, asset coverage and earnings prospects.

                                           In certain market conditions, the Trust may implement various temporary
                                           "defensive" strategies at times when BlackRock determines that conditions
                                           in the markets make pursuing the Trust's basic investment strategy
                                           inconsistent with the best interests of its shareholders. These strategies
                                           may include investing all or a portion of the Trust's assets in
                                           higher-quality, short-term income securities.

BORROWINGS AND PREFERRED SHARES            The Trust currently anticipates borrowing funds and/or issuing preferred
                                           shares of beneficial interest ("Preferred Shares") in an aggregate amount
                                           of up to 35% of its Managed Assets to buy additional securities. This
                                           practice is known as "leverage." The Trust may borrow from banks and other
                                           financial institutions. The Trust may also borrow additional funds through
                                           reverse repurchase agreements and dollar rolls and through the issuance of
                                           Preferred Shares. The Trust's leveraging strategy may not be successful.
                                           See "Risks--Leverage Risk."

                                           Money borrowed for investment purposes generally will pay interest or
                                           dividends based on shorter-term interest rates. If the rate of return,
                                           after the payment of applicable expenses of the Trust, on the intermediate
                                           and long-term bonds purchased by the Trust is greater than the interest or
                                           dividends paid by the Trust on borrowed money, the Trust will generate more
                                           income from such investments than it will need to pay interest or dividends
                                           on the borrowed money. If so, the excess income may be used to pay higher
                                           dividends to holders of common shares. However, the Trust cannot assure you
                                           that the use of leverage will result in a higher yield on the common
                                           shares. When leverage is employed, the net asset value and market price of
                                           the common shares and the yield to holders of common shares will be more
                                           volatile. See "Borrowings and Preferred Shares" and "Description of shares
                                           -- Preferred Shares."

OTHER INVESTMENT MANAGEMENT TECHNIQUES     Although not intended to be a significant element in the Trust's investment
                                           strategy, from time to time the Trust may use various other investment
                                           management techniques that also involve certain risks and special
                                           considerations, including but not limited to:

                                           o    engaging in interest rate transactions;

                                           o    using options and financial futures;

                                           o    making forward commitments; and

                                           o    lending the Trust's portfolio securities.

INVESTMENT ADVISOR                         BlackRock Advisors, Inc. ("BlackRock Advisors" or the "Advisor"), as the
                                           Trust's investment advisor, and BlackRock Advisors' affiliate, BlackRock
                                           Financial Management, Inc. ("BlackRock Financial Management" or the
                                           "Sub-Advisor"), as sub-advisor, will provide certain day-to-day investment
                                           management services to the Trust. BlackRock Advisors and BlackRock
                                           Financial Management both are wholly owned subsidiaries of BlackRock, Inc.,
                                           which is one of the largest publicly-traded asset management firms in the
                                           world with approximately $321 billion under management at March 31,
                                           2004. The BlackRock organization has over 16 years of experience managing
                                           closed-end funds. At March 31, 2004, BlackRock advised a closed-end family of
                                           50 active funds with approximately $14.7 billion in assets. Clients are served
                                           from the company's headquarters in New York City, as well as offices in
                                           Wilmington, San Francisco, Boston, Edinburgh, Tokyo and Hong Kong.
                                           BlackRock, Inc. is a member of The PNC Financial Services Group, Inc.
                                           ("PNC"), one of the largest diversified financial services organizations in
                                           the United States, and is majority-owned by PNC and by BlackRock employees.
                                           BlackRock Advisors will receive an annual fee, payable monthly, in a
                                           maximum amount equal to       % of the average weekly value of the Trust's
                                           Managed Assets. "Managed Assets" means the total assets of the Trust
                                           (including any assets attributable to leverage) minus the sum of accrued
                                           liabilities (other than debt representing financial leverage). The
                                           liquidation preference of any Preferred Shares issued by the Trust is not a
                                           liability.

DISTRIBUTIONS                              Commencing with the Trust's initial dividend, the Trust intends to make
                                           regular monthly cash distributions of all or a portion of its net
                                           investment income to common shareholders. We expect to declare the initial
                                           monthly dividend on the Trust's common shares within approximately 45 days
                                           after completion of this offering and to pay that initial monthly dividend
                                           approximately 60 to 90 days after completion of this offering. Unless an
                                           election is made to receive dividends in cash, shareholders will
                                           automatically have all dividends and distributions reinvested in common
                                           shares through the Trust's Dividend Reinvestment Plan. See "Dividend
                                           Reinvestment Plan."

                                           The Trust will pay common shareholders at least annually all, or a portion
                                           of, its net investment income after the payment of dividends and interest,
                                           if any, owed with respect to any outstanding Preferred Shares or other
                                           forms of leverage utilized by the Trust. If the Trust realizes a long-term
                                           capital gain, it will be required to allocate such gain between the common
                                           shares and any Preferred Shares issued by the Trust in proportion to the
                                           total dividends paid to each class for the year in which the income is
                                           realized. See "Distributions" and "Borrowings and Preferred Shares."

LISTING                                    It is currently anticipated that the Trust's common shares will be listed
                                           on the New York Stock Exchange under the symbol " ". See "Description of
                                           Shares--Common Shares."

CUSTODIAN AND TRANSFER AGENT               State Street Bank and Trust Company, N.A. will serve as the Trust's
                                           custodian and EquiServe Trust Company, N.A. will serve as the Trust's
                                           transfer agent. See "Custodian and Transfer Agent."

SPECIAL RISK CONSIDERATIONS                No Operating History. The Trust is a newly organized, closed-end management
                                           investment company with no operating history.

                                           Market Discount Risk. Common shares of closed-end investment companies
                                           frequently trade at prices lower than their net asset value. Common shares
                                           of closed-end investment companies like the Trust that may invest in lower
                                           grade securities have during some periods traded at prices higher than
                                           their net asset value and during other periods traded at prices lower than
                                           their net asset value. The Trust cannot assure you that its common shares
                                           will trade at a price higher than or equal to net asset value. The Trust's
                                           net asset value will be reduced immediately following this offering by the
                                           sales load and the amount of the organization and offering expenses paid by
                                           the Trust. See "Use of Proceeds." In addition to net asset value, the
                                           market price of the Trust's common shares may be affected by such factors
                                           as the Trust's use of leverage, dividend stability, portfolio credit
                                           quality, liquidity, market supply and demand and the Trust's dividend
                                           level, which is, in turn, affected by expenses and call protection for
                                           portfolio securities. See "Borrowings and Preferred Shares," "Risks,"
                                           "Description of Shares" and the section of the Statement of Additional
                                           Information with the heading "Repurchase of Common Shares." The common
                                           shares are designed primarily for long-term investors and you should not
                                           purchase common shares of the Trust if you intend to sell them shortly
                                           after purchase.

                                           Senior Loans Risk. The risks associated with Senior Loans are similar to
                                           the risks of non-investment grade bonds, although Senior Loans are
                                           typically senior and secured in contrast to non-investment grade bonds,
                                           which are often subordinated and unsecured. Senior Loans' higher standing
                                           has historically resulted in generally higher recoveries in the event of a
                                           corporate reorganization. In addition, because their interest rates are
                                           adjusted for changes in short-term interest rates, Senior Loans generally
                                           have less interest rate risk than non-investment grade bonds, which are
                                           typically fixed rate. The Trust's investments in Senior Loans are typically
                                           below investment grade and are considered speculative because of the credit
                                           risk of their issuers. Such companies are more likely to default on their
                                           payments of interest and principal owed to the Trust, and such defaults
                                           could reduce the Trust's net asset value and income distributions. An
                                           economic downturn generally leads to a higher non-payment rate, and a
                                           Senior Loan may lose significant value before a default occurs. Moreover,
                                           any specific collateral used to secure a Senior Loan may decline in value
                                           or become illiquid, which would adversely affect the Senior Loan's value.

                                           Economic and other events (whether real or perceived) can reduce the demand
                                           for certain Senior Loans or Senior Loans generally, which may reduce market
                                           prices and cause the Trust's net asset value per share to fall. The
                                           frequency and magnitude of such changes cannot be predicted.

                                           Senior Loans and other debt securities are also subject to the risk of
                                           price declines and to increases in prevailing interest rates, although
                                           floating-rate debt instruments are substantially less exposed to this risk
                                           than fixed-rate debt instruments. No active trading market may exist for
                                           certain Senior Loans, which may impair the ability of the Trust to realize
                                           full value in the event of the need to liquidate such assets. Adverse
                                           market conditions may impair the liquidity of some actively traded Senior
                                           Loans.

                                           Senior Loans hold the most senior position in the capital structure of a
                                           business entity and are typically secured with specific collateral and have
                                           a claim on the assets and/or stock of the borrower that is senior to that
                                           held by subordinated debt holders and stockholders of the borrower. Senior
                                           Loans typically have a stated term of between five and nine years, and have
                                           rates of interest which typically are redetermined either daily, monthly,
                                           quarterly, or semi-annually. Longer interest rate reset periods generally
                                           increase fluctuations in the Trust's net asset value as a result of changes
                                           in market interest rates. Senior Loans and other floating-rate debt
                                           instruments are subject to the risk of non-payment of scheduled interest or
                                           principal. Such non-payment would result in a reduction of income to the
                                           Trust, a reduction in the value of the investment and a potential decrease
                                           in the net asset value of the Trust. For a more detailed discussion of the
                                           characteristics and risks associated with Senior Loans, see "Portfolio
                                           Securities--Senior Loans" and "Risks--Senior Loans."

                                           Variable Debt Risk. The absence of an active secondary market with respect
                                           to particular variable and floating rate instruments could make it
                                           difficult for the Trust to dispose of a variable or floating rate note if
                                           the issuer defaulted on its payment obligation or during periods that the
                                           Trust is not entitled to exercise its demand rights, and the Trust could,
                                           for these or other reasons, suffer a loss with respect to such instruments.
                                           See "Variable Debt Risk."

                                           Leverage Risk. The use of leverage through reverse repurchase agreements,
                                           dollar roll transactions, borrowing of money and the issuance of Preferred
                                           Shares to purchase additional securities creates an opportunity for
                                           increased common share net investment income dividends, but also creates
                                           risks for the holders of common shares. Leverage is a speculative technique
                                           that may expose the Trust to greater risk and increased costs. Increases
                                           and decreases in the value of the Trust's portfolio will be magnified when
                                           the Trust uses leverage. As a result, leverage may cause greater changes in
                                           the Trust's net asset value. The Trust will also have to pay interest and
                                           dividends on its borrowings, which may reduce the Trust's return. This
                                           interest expense may be greater than the Trust's return on the underlying
                                           investment. The Trust's leveraging strategy may not be successful.

                                           Reverse repurchase agreements involve the risks that the interest income
                                           earned on the investment of the proceeds will be less than the interest
                                           expense and fund expenses, that the market value of the securities sold by
                                           the Trust may decline below the price of the securities the Trust is
                                           obligated to repurchase, and that the securities may not be returned to the
                                           Trust. There is no assurance that reverse repurchase agreements can be
                                           successfully employed.

                                           Dollar roll transactions involve the risk that the market value of the
                                           securities the Trust is required to purchase may decline below the agreed
                                           upon repurchase price of those securities. If the broker/dealer to whom the
                                           Trust sells securities becomes insolvent, the Trust's right to purchase or
                                           repurchase securities may be restricted. Successful use of dollar rolls may
                                           depend upon BlackRock's ability to correctly predict interest rates and
                                           prepayments. There is no assurance that dollar rolls can be successfully
                                           employed.

                                           We anticipate that the money borrowed for investment purposes will pay
                                           interest or dividends based on shorter-term interest rates that would be
                                           periodically reset. The Trust intends to invest the proceeds of the money
                                           borrowed for investment purposes in intermediate and long-term, typically
                                           fixed rate, bonds. So long as the Trust's bond portfolio provides a higher
                                           rate of return, net of Trust expenses, than interest and dividend rates on
                                           borrowed money, as reset periodically, the leverage may cause the holders
                                           of common shares to receive a higher current rate of return than if the
                                           Trust were not leveraged. If, however, long- and/or short-term rates rise,
                                           the interest and dividend rates on borrowed money could exceed the rate of
                                           return on bonds held by the Trust, reducing return to the holders of common
                                           shares. There is no assurance that a leveraging strategy will be
                                           successful. Leverage involves risks and special considerations for common
                                           shareholders including:

                                           o     the likelihood of greater volatility of net asset value, market price
                                                 and dividend rate of the common shares than a comparable portfolio
                                                 without leverage;

                                           o     the risk that fluctuations in interest rates on borrowings and
                                                 short-term debt or in the interest or dividend rates on any leverage
                                                 that the Trust must pay will reduce the return to the common
                                                 shareholders;

                                           o     the effect of leverage in a declining market, which is likely to
                                                 cause a greater decline in the net asset value of the common shares
                                                 than if the Trust were not leveraged, which may result in a greater
                                                 decline in the market price of the common shares;

                                           o     when the Trust uses financial leverage, the investment advisory fees
                                                 payable to BlackRock will be higher than if the Trust did not use
                                                 leverage; and

                                           o     leverage may increase operating costs, which may reduce total return.

                                           Certain types of borrowings by the Trust may result in the Trust being
                                           subject to covenants in credit agreements relating to asset coverage and
                                           Trust composition requirements. The Trust may be subject to certain
                                           restrictions on investments imposed by guidelines of one or more rating
                                           agencies, which may issue ratings for the short-term corporate debt
                                           securities or Preferred Shares issued by the Trust. These guidelines may
                                           impose asset coverage or Trust composition requirements that are more
                                           stringent than those imposed by the Investment Company Act of 1940, as
                                           amended (the "Investment Company Act"). BlackRock does not believe that
                                           these covenants or guidelines will impede BlackRock from managing the
                                           Trust's portfolio in accordance with the Trust's investment objectives and
                                           policies.

                                           Interest Rate Risk. The other securities held in the Trust's portfolio
                                           could be affected by interest rate fluctuations. The value of Trust common
                                           shares will usually change in response to interest rate fluctuations. When
                                           interest rates decline, the value of fixed-rate securities can be expected
                                           to rise. Conversely, when interest rates rise, the value of fixed-rate
                                           securities can be expected to decline. Although changes in prevailing
                                           interest rates can be expected to cause some fluctuations in the value of
                                           variable and 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 interest rates than fixed-rate instruments.
                                           Fluctuations in the value of the Trust's securities will not affect
                                           interest income on existing securities but will be reflected in the Trust's
                                           net asset value. The Trust may utilize certain strategies, including taking
                                           positions in futures or interest rate swaps, for the purpose of reducing
                                           the interest rate sensitivity of the portfolio and decreasing the Trust's
                                           exposure to interest rate risk, although there is no assurance that it will
                                           do so or that such strategies will be successful.

                                           Non-Investment Grade Securities Risk. The Trust may invest in securities
                                           that are below investment grade, which are commonly referred to as "junk
                                           bonds." Investments in lower grade securities will expose the Trust to
                                           greater risks than if the Trust owned only higher grade securities. Because
                                           of the substantial risks associated with lower grade securities, you could
                                           lose money on your investment in common shares of the Trust, both in the
                                           short-term and the long-term.

                                           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 of higher rated securities. Adverse
                                           conditions could make it difficult at times for the Trust to sell certain
                                           securities or could result in lower prices than those used in calculating
                                           the Trust's net asset value.

                                           Credit Risk. Credit risk is the risk that one or more securities in the
                                           Trust'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. Under normal circumstances, the Trust will
                                           invest substantially all of its Managed Assets in securities that are rated
                                           Ba/BB or B or that are unrated but judged to be of comparable quality by
                                           BlackRock. The Trust's investments in non-investment grade securities will
                                           expose it to a great deal of credit risk. The prices of these lower grade
                                           securities are more sensitive to negative developments, such as a decline
                                           in the issuer's revenues 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 addition, the Trust's use of credit derivatives
                                           will expose it to additional risk in the event that the bonds underlying
                                           the derivatives default.

                                           Non-U.S. Securities Risk. The Trust will invest in securities of non-U.S.
                                           issuers ("Non-U.S. Securities"). Such investments involve certain risks not
                                           involved in domestic investments. Securities markets in foreign countries
                                           often are not as developed, efficient or liquid as securities markets in
                                           the United States. Therefore, the prices of Non-U.S. Securities often are
                                           volatile. Certain foreign countries may impose restrictions on the ability
                                           of issuers of Non-U.S. Securities to make payments of principal and
                                           interest to investors located outside the country. In addition, the Trust
                                           will be subject to risks associated with adverse political and economic
                                           developments in foreign countries, which could cause the Trust to lose
                                           money on its investments in Non-U.S. Securities. See "Risks - Non-U.S.
                                           Securities Risk."

                                           Emerging Market Risks. The Trust may invest in Non-U.S. Securities of
                                           issuers in so-called "emerging markets" (or lesser developed countries)
                                           Such investments are particularly speculative and entail all of the risks
                                           of investing in securities of Non-U.S. issuers but to a heightened degree.
                                           See "Risks - Emerging Markets Risk."

                                           Foreign Currency Risk. Because the Trust may invest in securities
                                           denominated or quoted in currencies other than the U.S. dollar, changes in
                                           foreign currency exchange rates may affect the value of securities in the
                                           Trust and the unrealized appreciation or depreciation of investments.
                                           Currencies of certain countries may be volatile and therefore may affect
                                           the value of securities denominated in such currencies, which means that
                                           the Trust's net asset value could decline as a result of changes in the
                                           exchange rates between foreign currencies and the U.S. dollar. See
                                           "Risks--Foreign Currency Risk."

                                           Mortgage-related Securities. The risks associated with mortgage-related
                                           securities include: (1) credit risk associated with the performance of the
                                           underlying mortgage properties and of the borrowers owning these
                                           properties; (2) adverse changes in economic conditions and circumstances,
                                           which are more likely to have an adverse impact on mortgage-related
                                           securities secured by loans on certain types of commercial properties than
                                           on those secured by loans on residential properties; (3) prepayment risk,
                                           which can lead to significant fluctuations in value of the mortgage-related
                                           security; (4) loss of all or part of the premium, if any, paid; and (5)
                                           decline in the market value of the security, whether resulting from changes
                                           in interest rates or prepayments on the underlying mortgage collateral.

                                           Risks Associated with Collateralized Bond Obligations. Income from the
                                           pool of lower grade securities collateralizing the Collateralized Bond
                                           Obligation ("CBO") is typically separated into tranches representing
                                           different degrees of credit quality. The top tranche of CBOs, which
                                           represents the highest credit quality in the pool, has the greatest
                                           collateralization and pays the lowest interest rate. Lower CBO tranches
                                           represent lower degrees of credit quality and pay higher interest rates to
                                           compensate for the attendant risks. The bottom tranche specifically
                                           receives the residual interest payments (i.e., money that is left over
                                           after the higher tiers have been paid) rather than a fixed interest rate.
                                           The return on the lower tranches of CBOs are especially sensitive to the
                                           rate of defaults in the collateral pool, which increases the risk of the
                                           Trust losing its investments in lower CBO tranches.

                                           Liquidity Risk. The Trust may invest in securities for which there is no
                                           readily available trading market or which are otherwise illiquid. The Trust
                                           may not be able to readily dispose of such securities at prices that
                                           approximate those at which the Trust could sell such securities if they
                                           were more widely-traded and, as a result of such illiquidity, the Trust may
                                           have to sell other investments or engage in borrowing transactions if
                                           necessary to raise cash to meet its obligations. In addition, the limited
                                           liquidity could affect the market price of the securities, thereby
                                           adversely affecting the Trust's net asset value and ability to make
                                           dividend distributions.

                                           Strategic Transactions. Strategic transactions in which the Trust may
                                           engage also involve certain risks and special considerations, including
                                           engaging in hedging and risk management transactions such as interest rate
                                           and foreign currency transactions, options, futures, swaps and other
                                           derivatives transactions ("Strategic Transactions"). Strategic Transactions
                                           will be entered into to seek to manage the risks of the Trust's portfolio
                                           of securities, but may have the effect of limiting the gains from favorable
                                           market movements. Strategic Transactions involve risks, including that (1)
                                           the loss on the Strategic Transaction position may be larger than the gain
                                           in the portfolio position being hedged and (2) the derivative instruments
                                           used in Strategic Transactions may not be liquid and may require the Trust
                                           to pay additional amounts of money. Successful use of Strategic
                                           Transactions depends on BlackRock's ability to predict correctly market
                                           movements which, of course, cannot be assured. Losses on Strategic
                                           Transactions may reduce the Trust's net asset value and its ability to pay
                                           dividends if they are not offset by gains on the portfolio positions being
                                           hedged. The Trust may also lend the securities it owns to others, which
                                           allows the Trust the opportunity to earn additional income. Although the
                                           Trust will require the borrower of the securities to post collateral for
                                           the loan and the terms of the loan will require that the Trust be able to
                                           reacquire the loaned securities if certain events occur, the Trust is still
                                           subject to the risk that the borrower of the securities may default, which
                                           could result in the Trust losing money, which would result in a decline in
                                           the Trust's net asset value. The Trust may also purchase securities for
                                           delayed settlement. This means that the Trust is generally obligated to
                                           purchase the securities at a future date for a set purchase price,
                                           regardless of whether the value of the securities is more or less than the
                                           purchase price at the time of settlement.

                                           Market Disruption Risk. The war with Iraq, its aftermath and the continuing
                                           occupation of the country by coalition forces are likely to have a
                                           substantial impact on the U.S. and world economies and securities markets.
                                           The duration and nature of the war and occupation and the potential costs
                                           of rebuilding the Iraqi infrastructure and political systems cannot be
                                           predicted with any certainty. The war and occupation, terrorism and related
                                           geopolitical risks have led, and may in the future lead, to increased
                                           short-term market volatility and may have adverse long-term effects on U.S.
                                           and world economies and markets generally. Those events could also have an
                                           acute effect on individual issuers or related groups of issuers. These
                                           risks could also adversely affect securities markets, interest rates,
                                           auctions, secondary trading, ratings, credit risk, inflation, deflation and
                                           other factors relating to the common shares.

ANTI-TAKEOVER PROVISIONS                   The Trust's Agreement and Declaration of Trust includes provisions that
                                           could limit the ability of other entities or persons to acquire control of
                                           the Trust or convert the Trust to open-end status. These provisions could
                                           deprive the holders of common shares of opportunities to sell their common
                                           shares at a premium over the then current market price of the common shares
                                           or at net asset value.

</TABLE>


                           SUMMARY OF TRUST EXPENSES

         The following table assumes leverage in an amount equal to 35% of the
Trust's Managed Assets (after incurring leverage), and shows Trust expenses as
a percentage of net assets attributable to common shares.

Shareholder Transaction Expenses:

<TABLE>
<CAPTION>

<S>                                                                                                       <C>
     Sales load paid by you (as a percentage of offering price)...............................                 %
     Offering/Organizational Expenses borne by the Trust (as a percentage of offering price)(1)                %
     Dividend reinvestment plan fees..........................................................           None(2)


                                                                                   Percentage of Net Assets
                                                                                Attributable to Common Shares
                                                                                 (Assumes Leverage Incurred)
Annual Expenses
     Management fees..............................................                          %
     Interest expense.............................................                          % (3)
     Other expenses...............................................                          %
          Total net annual expenses...............................                          % (4)

(1)   The Trust will pay organizational expenses and offering costs of the
      Trust (other than the sales load) up to an aggregate of $    per share of
      the Trust's common shares. BlackRock has agreed to pay such
      organizational expenses and offering costs of the Trust to the extent
      they exceed $    per share of the Trust's common shares.

(2)   You will be charged a $2.50 service charge and pay brokerage charges if
      you direct the plan agent (as defined below) to sell your common shares
      held in a dividend reinvestment account.

(3)   Includes the anticipated cost of leverage.

(4)   The table presented below in this footnote estimates what the Trust's
      annual expenses would be stated as percentages of the Trust's net assets
      attributable to common shares. This table assumes the Trust is the same
      size as in the table above, but unlike that table above, assumes that no
      leverage is incurred. In accordance with these assumptions, the Trust's
      expenses would be estimated to be as follows:

                                                                                   Percentage of Net Assets
                                                                                Attributable to Common Shares
                                                                                (Assumes No Leverage Incurred)
Annual Expenses
     Management fees..............................................                            %
     Other expenses...............................................                            %
          Total net annual expenses...............................                            %

</TABLE>

The purpose of the table above and the example below is to help you understand
all fees and expenses that you, as a holder of common shares, would bear
directly or indirectly. The expenses shown in the table under "Other expenses"
and "Total net annual expenses" are based on estimated amounts for the Trust's
first year of operations and assume that the Trust issues        common shares.
If the Trust issues fewer common shares, all other things being equal, these
expenses would increase. See "Management of the Trust" and "Dividend
Reinvestment Plan."

The following example illustrates the expenses (including the sales load of
$    ) that you would pay on a $1,000 investment in common shares, assuming(1)
total annual expenses of     % of net assets attributable to common shares and
(2) a 5% annual return:(1)

<TABLE>
<CAPTION>

                                         1 Year           3 Years           5 Years          10 Years
                                         ------           -------           -------          --------

<S>                                         <C>             <C>               <C>               <C>

Total Expenses Incurred............         $                $                 $                 $

(1)      The example should not be considered a representation of future
         expenses. The example assumes that the estimated "Other expenses" set
         forth in the Annual Expenses table are accurate and that all
         dividends and distributions are reinvested at net asset value. Actual
         expenses may be greater or less than those assumed. Moreover, the
         Trust's actual rate of return may be greater or less than the
         hypothetical 5% return shown in the example.

</TABLE>


                                   THE TRUST

         The Trust is a newly organized, diversified, closed-end management
investment company registered under the Investment Company Act. The Trust was
organized as a Delaware statutory trust on April 20, 2004, pursuant to an
Agreement and Declaration of Trust governed by the laws of the State of
Delaware. As a newly organized entity, the Trust has no operating history. The
Trust's principal office is located at 100 Bellevue Parkway, Wilmington,
Delaware 19809, and its telephone number is (888) 825-2257.


                                USE OF PROCEEDS

         The net proceeds of the offering of common shares will be
approximately $          ($            if the Underwriters exercise the over-
allotment option in full) after payment of the estimated organizational
expenses and offering costs. The Trust will invest the net proceeds of the
offering in accordance with the Trust's investment objectives and policies as
stated below. We currently anticipate that the Trust will be able to invest
substantially all of the net proceeds in securities that meet the Trust's
investment objectives and policies within approximately three months after the
completion of this offering. Pending such investment, it is anticipated that
the proceeds will be invested in short-term securities.


                            THE TRUST'S INVESTMENTS

Investment Objectives

         The Trust's investment objective is to provide a high level of current
income. The Trust, as a secondary objective, also seeks the preservation of
capital to the extent consistent with its primary objective of high current
income. The Trust will pursue its objectives by investing in a global portfolio
of floating rate securities including investing in a significant amount in U.S.
and non U.S. Senior Loans. Senior Loans are made to corporations, partnerships
and other business entities which operate in various industries and
geographical regions. Senior Loans pay interest at rates which are redetermined
periodically by reference to a base lending rate, primarily LIBOR, plus a
premium. It is anticipated that the proceeds of the Senior Loans in which the
Trust will acquire interests primarily will be used to finance leveraged
buyouts, recapitalizations, mergers, acquisitions, stock repurchases,
refinancing and internal growth and for other corporate purposes of borrowers.

Investment Policies

         Under normal market conditions, the Trust will invest at least 80% of
its Managed Assets in securities with a variable or floating interest rate
feature such as Senior Loans and Variable Debt. The Trust will provide
shareholders with notice at least 60 days prior to changing this
non-fundamental policy of the Trust unless such change was previously approved
by shareholders. The Trust may also invest up to 20% of its Managed Assets in
other securities such as corporate bonds and mortgage-backed and asset-backed
securities.

         The Trust initially expects to have a duration of less than __ years
(including the effect of anticipated leverage). In comparison to maturity
(which is the date on which the issuer of a debt instrument is obligated to
repay the principal amount), duration is a measure of the price volatility of a
debt instrument as a result in changes in market rates of interest, based on
the weighted average timing of the instrument's expected principal and interest
payments. Duration differs from maturity in that it takes into account a
security's yield, coupon payments and its principal payments in addition to the
amount of time until the security finally matures. As the value of a security
changes over time, so will its duration. Prices of securities with longer
durations tend to be more sensitive to interest rate changes than securities
with shorter durations. In general, a portfolio of securities with a longer
duration can be expected to be more sensitive to interest rate changes than a
portfolio with a shorter duration.

         Under current market conditions, the Trust expects that substantially
all of its portfolio will consist of below investment grade debt securities,
rated as such at the time of investment, meaning that such bonds are rated by
national rating agencies below the four highest grades or are unrated but
judged to be of comparable quality by BlackRock. See "Risks - Non Investment
Grade Securities Risk." The remainder of the Trust's assets will be invested in
investment grade debt securities. For this purpose, when a security is rated by
more than one of these rating agencies, BlackRock generally will use the
highest rating, and if a security is unrated, it will be treated as having a
credit rating as determined by BlackRock. Within this general guideline, the
Trust may invest in individual securities of any credit quality.

         The foregoing credit quality policies apply only at the time a
security is purchased, and the Trust is not required to dispose of a security
in the event that a rating agency downgrades its assessment of the credit
characteristics of a particular issue or withdraws its assessment. In
determining whether to retain or to sell such a security, BlackRock may
consider such factors as BlackRock's assessment of the credit quality of the
issuer of the security, the price at which the security could be sold and the
rating, if any, assigned to the security by other rating agencies.

         The Trust will invest at least ___% of its Managed Assets in
securities of non-U.S. issuers and may invest up to __% of its Managed Assets
in securities of emerging markets issuers. The Trust will generally invest in
U.S. dollar denominated securities or in non U.S. dollar-denominated securities
for which currency exchange exposure versus the U.S. dollar has been hedged.
However, the Trust may invest up to 10% of its Managed Assets in non-U.S.
dollar denominated securities whose currency exchange exposure versus the U.S.
dollar remains unhedged. Investing in foreign and emerging markets securities
may entail significant risks. See "Risks -- Non-U.S. Securities Risk" and
"Risks - Emerging Markets Risks."

         The Trust may engage in foreign currency transactions, including
foreign currency forward contracts, options, swaps, and other strategic
transactions in connection with its investments in Non U.S. Securities.

         The Trust may implement various temporary "defensive" strategies at
times when BlackRock determines that conditions in the markets make pursuing
the Trust's basic investment strategy inconsistent with the best interests of
its shareholders. These strategies may include investing all or a portion of
the Trust's assets in U.S. Government obligations and high-quality, short-term
debt securities.

         The Trust can borrow money to buy additional securities. This practice
is known as "leverage." The Trust may borrow from banks or other financial
institutions or through reverse repurchase agreements, dollar rolls and other
investment techniques. The Trust currently anticipates borrowing funds and/or
issuing Preferred Shares in an aggregate amount of approximately 35% of its
Managed Assets. See "Risks--Leverage."


                              PORTFOLIO SECURITIES

Senior Loans

         Senior Loans hold the most senior position in the capital structure of
a business entity (the "Borrower"), are typically secured with specific
collateral and have a claim on the assets and/or stock of the Borrower that is
senior to that held by subordinated debt holders and stockholders of the
Borrower. The proceeds of Senior Loans primarily are used to finance leveraged
buyouts, recapitalizations, mergers, acquisitions, stock repurchases,
refinancings and to finance internal growth and for other corporate purposes.
Senior Loans typically have rates of interest which are redetermined either
daily, monthly, quarterly or semi-annually by reference to a base lending rate,
plus a premium or credit spread. These base lending rates are primarily the
London-Interbank Offered Rate ("LIBOR"), and secondarily the prime rate offered
by one or more major United States banks (the "Prime Rate") and the certificate
of deposit ("CD") rate or other base lending rates used by commercial lenders.
The Trust may also purchase unsecured loans, other floating rate debt
securities, and credit-linked notes.

         Senior Loans typically have a stated term of between five and nine
years, and have rates of interest which typically are redetermined either
daily, monthly, quarterly, or semi-annually. Longer interest rate reset periods
generally increase fluctuations in the Trust's net asset value as a result of
changes in market interest rates. The Trust is not subject to any restrictions
with respect to the maturity of Senior Loans held in its portfolio. As a
result, as short-term interest rates increase, interest payable to the Trust
from its investments in Senior Loans should increase, and as short-term
interest rates decrease, interest payable to the Trust from its investments in
Senior Loans should decrease. Because of prepayments, BlackRock expects the
average life of Senior Loans to be shorter than the stated maturity.

         Senior Loans and other floating-rate debt instruments are subject to
the risk of non-payment of scheduled interest or principal. Such non-payment
would result in a reduction of income to the Trust, a reduction in the value of
the investment and a potential decrease in the net asset value of the Trust.
There can be no assurance that the liquidation of any collateral securing a
Senior Loan would satisfy the Borrower's obligation in the event of non-payment
of scheduled interest or principal payments, or that such collateral could be
readily liquidated. In the event of bankruptcy of a Borrower, the Trust could
experience delays or limitations with respect to its ability to realize the
benefits of the collateral securing a Senior Loan. The collateral securing a
Senior Loan may lose all or substantially all of its value in the event of
bankruptcy of a Borrower. Some Senior Loans are subject to the risk that a
court, pursuant to fraudulent conveyance or other similar laws, could
subordinate such Senior Loans to presently existing or future indebtedness of
the Borrower or take other action detrimental to the holders of Senior Loans
including, in certain circumstances, invalidating such Senior Loans or causing
interest previously paid to be refunded to the Borrower. If interest were
required to be refunded, it could negatively affect the Trust's performance.

         Many Senior Loans in which the Trust will invest may not be rated by a
rating agency, will not be registered with the Securities and Exchange
Commission or any state securities commission and will not be listed on any
national securities exchange. The amount of public information available with
respect to Senior Loans will generally be less extensive than that available
for registered or exchange listed securities. In evaluating the
creditworthiness of Borrowers, BlackRock will consider, and may rely in part,
on analyses performed by others. Borrowers may have outstanding debt
obligations that are rated below investment grade by a rating agency. Many of
the Senior Loans in the Trust will have been assigned ratings below investment
grade by independent rating agencies. In the event Senior Loans are not rated,
they are likely to be the equivalent of below investment grade quality. Because
of the protective features of Senior Loans, BlackRock believes that Senior
Loans tend to have more favorable loss recovery rates as compared to more
junior types of below investment grade debt obligations. BlackRock does not
view ratings as the determinative factor in its investment decisions and relies
more upon its credit analysis abilities than upon ratings.

         No active trading market may exist for some Senior Loans and some
loans may be subject to restrictions on resale. A secondary market may be
subject to irregular trading activity, wide bid/ask spreads and extended trade
settlement periods, which may impair the ability to realize full value and thus
cause a material decline in the Trust's net asset value. In addition, the Trust
may not be able to readily dispose of its Senior Loans at prices that
approximate those at which the Trust could sell such loans if they were more
widely-traded and, as a result of such illiquidity, the Trust may have to sell
other investments or engage in borrowing transactions if necessary to raise
cash to meet its obligations. During periods of limited supply and liquidity of
Senior Loans, the Trust's yield may be lower. See "Risks--Liquidity Risk" and
"Risks--Senior Loans."

         When interest rates decline, the value of a fund invested in
fixed-rate obligations can be expected to rise. Conversely, when interest rates
rise, the value of a fund invested in fixed-rate obligations can be expected to
decline. Although changes in prevailing interest rates can be expected to cause
some fluctuations in the value of Senior Loans (due to the fact that floating
rates on Senior Loans only reset periodically), the value of Senior Loans is
substantially less sensitive to changes in market interest rates than
fixed-rate instruments. As a result, BlackRock expects the Trust's policy of
investing a portion of its assets in floating-rate Senior Loans will make the
Trust less volatile and less sensitive to changes in market interest rates than
if the Trust invested in fixed-rate obligations. Similarly, a sudden and
significant increase in market interest rates may cause a decline in the value
of these investments and in the Trust's net asset value. Other factors
(including, but not limited to, rating downgrades, credit deterioration, a
large downward movement in stock prices, a disparity in supply and demand of
certain securities or market conditions that reduce liquidity) can reduce the
value of Senior Loans and other debt obligations, impairing the Trust's net
asset value.

         The Trust may purchase and retain in its portfolio a Senior Loan where
the Borrower has experienced, or may be perceived to be likely to experience,
credit problems, including involvement in or recent emergence from bankruptcy
reorganization proceedings or other forms of debt restructuring. Such
investments may provide opportunities for enhanced income as well as capital
appreciation. At times, in connection with the restructuring of a Senior Loan
either outside of bankruptcy court or in the context of bankruptcy court
proceedings, the Trust may determine or be required to accept equity securities
or junior debt securities in exchange for all or a portion of a Senior Loan.

         The Trust may purchase Senior Loans on a direct assignment basis. If
the Trust purchases a Senior Loan on direct assignment, it typically succeeds
to all the rights and obligations under the loan agreement of the assigning
lender and becomes a lender under the loan agreement with the same rights and
obligations as the assigning lender. The Trust may also purchase, without
limitation, participations in Senior Loans. The participation by the Trust in a
lender's portion of a Senior Loan typically will result in the Trust having a
contractual relationship only with such lender, not with the Borrower. As a
result, the Trust may 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 such lender of payments from the
Borrower. Such indebtedness may be secured or unsecured. Loan participations
typically represent direct participations in a loan to a Borrower, and
generally are offered by banks or other financial institutions or lending
syndicates. The Trust may participate in such syndications, or can buy part of
a loan, becoming a part lender. When purchasing loan participations, the Trust
assumes the credit risk associated with the Borrower and may assume the credit
risk associated with an interposed bank or other financial intermediary. The
participation interests in which the Trust intends to invest may not be rated
by any nationally recognized rating service. Given the current structure of the
markets for loan participations and assignments, the Trust expects to treat
these securities as illiquid.

         BlackRock may use an independent pricing service or prices provided by
dealers to value most loans and other debt securities at their market value.
BlackRock will use the fair value method to value Senior Loans or other
securities if market quotations for them are not readily available or are
deemed unreliable.

Non-Investment Grade Securities

         The Trust anticipates that, under normal market conditions,
substantially all of its portfolio will be 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 securities comparably rated by other rating agencies or in unrated
securities determined by BlackRock 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
principal 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 by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Securities rated D by S&P are in
default and the payment of interest and/or repayment of principal is in
arrears. When BlackRock believes it to be in the best interests of the Trust's
shareholders, the Trust will reduce its investment in lower grade securities
and, in certain market conditions, the Trust may invest none of its assets in
lower grade securities. Percentage limitations described in this prospectus are
as of the time of investment by the Trust and could thereafter be exceeded as a
result of market value fluctuations of the Trust's portfolio.

         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 of higher rated securities. Adverse conditions could make
it difficult at times for the Trust to sell certain securities or could result
in lower prices than those used in calculating the Trust's net asset value.

         The prices of debt securities generally are inversely related to
interest rate changes; however, the price volatility caused by fluctuating
interest rates of securities also is inversely related to the coupon of such
securities. Accordingly, lower grade securities may be relatively less
sensitive to interest rate changes than higher quality securities of comparable
maturity, because of their higher coupon. This higher coupon is what the
investor receives in return for bearing greater credit risk. The higher credit
risk associated with lower grade securities potentially can have a greater
effect on the value of such securities than may be the case with higher quality
issues of comparable maturity, and will be a substantial factor in the Trust's
relative share price volatility.

         Lower grade securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt severely the
market for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such 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.

         The ratings of Moody's, S&P and the other rating agencies represent
their opinions as to the quality of the obligations which they undertake to
rate. Ratings are relative and subjective and, although ratings may be useful
in evaluating the safety of interest and principal payments, they do not
evaluate the market value risk of such obligations. Although these ratings may
be an initial criterion for selection of portfolio investments, BlackRock also
will independently evaluate these securities and the ability of the issuers of
such securities to pay interest and principal. To the extent that the Trust
invests in lower grade securities that have not been rated by a rating agency,
the Trust's ability to achieve its investment objectives will be more dependent
on BlackRock's credit analysis than would be the case when the Trust invests in
rated securities.

Corporate Bonds

         The Trust may invest in corporate bonds. The investment 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.

Asset-Backed Securities

         The Trust may invest in asset-backed securities. Asset-backed
securities are a form of structured debt obligations. The securitization
techniques used for asset-backed securities are similar to those used for
mortgage-related securities. The collateral for these securities may include
home equity loans, automobile and credit card receivables, boat loans, computer
leases, airplane leases, mobile home loans, recreational vehicle loans and
hospital account receivables. The Trust may invest in these and other types of
asset-backed securities that may be developed in the future. Asset-backed
securities present certain risks that are not presented by mortgage-related
securities. Primarily, these securities may provide the Trust with a less
effective security interest in the related collateral than do mortgage-related
securities. Therefore, there is the possibility that recoveries on the
underlying collateral may not, in some cases, be available to support payments
on these securities.

Mortgage-Related Securities

         Mortgage-related securities are structured debt obligations
collateralized by pools of commercial or residential mortgages. Pools of
mortgage loans are assembled as securities for sale to investors by various
governmental, government-related and private organizations. These securities
may include complex instruments such as collateralized mortgage obligations,
stripped mortgage-backed securities, mortgage pass-through securities,
interests in real estate mortgage investment conduits ("REMICs"), real estate
investment trusts ("REITs"), including debt and preferred stock issued by
REITs, as well as other real estate-related securities. The mortgage-related
securities in which the Trust may invest include those with fixed, floating or
variable interest rates, those with interest rates that change based on
multiples of changes in a specified index of interest rates and those with
interest rates that change inversely to changes in interest rates, as well as
those that do not bear interest. The Trust may invest in residential and
commercial mortgage-related securities issued by governmental entities and
private issuers, including subordinated mortgage-related securities.

Collateralized Bond Obligations

         The Trust may invest in collateralized bond obligations ("CBOs"),
which are structured securities backed by a diversified pool of high yield,
public or private fixed income securities. These may be fixed pools or may be
"market value" (or managed) pools of collateral. The pool of high yield
securities is typically separated into tranches representing different degrees
of credit quality. The top tranche of CBOs, which represents the highest credit
quality in the pool, has the greatest collateralization and pays the lowest
interest rate. Lower CBO tranches represent lower degrees of credit quality and
pay higher interest rates intended to compensate for the attendant risks. The
bottom tranche specifically receives the residual interest payments (i.e.,
money that is left over after the higher tranches have been paid) rather than a
fixed interest rate. The return on the lower tranches of CBOs is especially
sensitive to the rate of defaults in the collateral pool. Under normal market
conditions, the Trust expects to invest in the lower tranches of CBOs.

Second Lien Loans and Debt Securities

         The Trust may invest in loans and other debt securities that have the
same characteristics as Senior Loans except that such loans are second in lien
property rather than first. Such "second lien" loans and securities like Senior
Loans typically have adjustable floating rate interest payments. Accordingly,
the risks associated with "second lien" loans are higher than the risk of loans
with first priority over the collateral. In the event of default on a "second
lien" loan, the first priority lien holder has first claim to the underlying
collateral of the loan. It is possible, that no collateral value would remain
for the second priority lien holder and therefore result in a loss of
investment to the Trust.

Collateralized Loan Obligations ("CLOS")

         The Trust may invest in certain asset-backed securities as discussed
above. Asset-backed securities are payment claims that are securitized in the
form of negotiable paper that is issued by a financing company (generally
called a Special Purpose Vehicle or "SPV"). These securitized payment claims
are, as a rule, corporate financial assets brought into a pool according to
specific diversification rules. The SPV is a company founded solely for the
purpose of securitizing these claims and its only asset is the risk arising out
of this diversified asset pool. On this basis, marketable securities are issued
which, due to the diversification of the underlying risk, generally represent a
lower level of risk than the original assets. The redemption of the securities
issued by the SPV takes place at maturity out of the cash flow generated by the
collected claims.

         A CLO is a structured credit security issued by an SPV that was
created to reapportion the risk and return characteristics of a pool of assets.
The assets, typically Senior Loans, are used as collateral supporting the
various debt tranches issued by the SPV. The key feature of the CLO structure
is the prioritization of the cash flows from a pool of debt securities among
the several classes of CLO.

Senior Loan Based Derivatives

         The Trust may obtain exposure to senior loans and baskets of senior
loans through the use of derivative instruments. Such derivative instruments
have recently become increasingly available. BlackRock reserves the right to
utilize these instruments and similar instruments that may be available in the
future.

Credit-Linked Notes

         The Trust may invest in credit-linked notes ("CLN") for risk
management purposes, including diversification. A CLN is a derivative
instrument. It is a synthetic obligation between two or more parties where the
payment of principal and/or interest is based on the performance of some
obligation (a reference obligation). In addition to credit risk of the
reference obligations and interest rate risk, the buyer/seller of the CLN is
subject to counterparty risk.

Strategic Transactions

         In addition to credit derivatives, the Trust may, but is not required
to, use various strategic transactions described below to generate total
return, facilitate portfolio management and mitigate risks. Such strategic
transactions are generally accepted under modern portfolio management and are
regularly used by many mutual funds and other institutional investors. Although
BlackRock seeks to use the practices to further the Trust's investment
objectives, no assurance can be given that these practices will achieve this
result.

         The Trust may purchase and sell derivative instruments such as
exchange-listed and over-the-counter put and call options on securities,
financial futures, equity, fixed-income and interest rate indices, and other
financial instruments, purchase and sell financial futures contracts and
options thereon, enter into various interest rate transactions such as swaps,
caps, floors or collars and enter into various currency transactions such as
currency forward contracts, currency futures contracts, currency swaps or
options on currency or currency futures or credit transactions and credit
default swaps. The Trust also may purchase derivative instruments that combine
features of these instruments. Collectively, all of the above are referred to
as "Strategic Transactions." The Trust generally seeks to use Strategic
Transactions as a portfolio or risk management to seek to protect against
possible adverse changes in the market value of securities held in or to be
purchased for the Trust's portfolio, protect the value of the Trust's
portfolio, facilitate the sale of certain securities for investment purposes,
manage the effective interest rate exposure of the Trust, protect against
changes in currency exchange rates, manage the effective maturity or duration
of the Trust's portfolio, or establish positions in the derivatives markets as
a temporary substitute for purchasing or selling particular securities. The
Trust may use Strategic Transactions to enhance potential gain, although the
Trust will commit variation margin for Strategic Transactions that involve
futures contracts in accordance with the rules of the Commodity Futures Trading
Commission.

         Strategic Transactions have risks, including the imperfect correlation
between the value of such instruments and the underlying assets, the possible
default of the other party to the transaction or illiquidity of the derivative
instruments. Furthermore, the ability to successfully use Strategic
Transactions depends on BlackRock's ability to predict pertinent market
movements, which cannot be assured. Thus, the use of Strategic Transactions may
result in losses greater than if they had not been used, may require the Trust
to sell or purchase portfolio securities at inopportune times or for prices
other than current market values, may limit the amount of appreciation the
Trust can realize on an investment, or may cause the Trust to hold a security
that it might otherwise sell. The use of currency transactions can result in
the Trust incurring losses as a result of the imposition of exchange controls,
suspension of settlements or the inability of the Trust to deliver or receive a
specified currency. Additionally, amounts paid by the Trust as premiums and
cash or other assets held in margin accounts with respect to Strategic
Transactions are not otherwise available to the Trust for investment purposes.
A more complete discussion of Strategic Transactions and their risks is
contained in the Trust's Statement of Additional Information.

Non-U.S. Securities

         The Trust will invest at least ___% of its Managed Assets in
securities issued by foreign countries, their agencies or instrumentalities or
by non-U.S. companies. The Trust will consider a company a U.S. company and not
a foreign company if it meets one or more of the following tests: (i) such
company was organized in the U.S.; (ii) such company's primary business office
is in the U.S.; (iii) the principal trading market for such company's assets
are located in the U.S.; (iv) 50% or more of such company's assets are located
in the U.S.; or (v) 50% or more of such issuer's revenues are derived from the
U.S. Foreign securities markets generally are not as developed or efficient as
those in the United States. Securities of some non-U.S. issuers are less liquid
and more volatile than securities of comparable U.S. issuers. Similarly, volume
and liquidity in most foreign securities markets are less than in the United
States and, at times, volatility of price can be greater than in the United
States.

         Because evidences of ownership of such securities usually are held
outside the United States, the Trust would be subject to additional risks if it
invested in foreign securities, which include possible adverse political and
economic developments, seizure or nationalization of foreign deposits and
adoption of governmental restrictions which might adversely affect or restrict
the payment of principal and interest on the foreign securities to investors
located outside the country of the issuer, whether from currency blockage or
otherwise.

Emerging Markets Risk

         Investing in securities of issuers based in underdeveloped emerging
markets entails all of the risks of investing in securities of non-U.S. issuers
to a heightened degree. These heightened risks include: (i) greater risks of
expropriation, confiscatory taxation, nationalization, and less social,
political and economic stability; (ii) the smaller size of the market for such
securities and a lower volume of trading, resulting in lack of liquidity and in
price volatility; and (iii) certain national policies which may restrict the
Trust's investment opportunities including restrictions on investing in issuers
or industries deemed sensitive to relevant national interests.

         In addition to brokerage commissions, custodial services and other
costs relating to investment in emerging markets are generally more expensive
than in the United States. Such markets have been unable to keep pace with the
volume of securities transactions, making it difficult to conduct such
transactions. The inability of the Trust to make intended securities purchases
due to settlement problems could cause the Trust to miss attractive investment
opportunities. An inability to dispose of a security due to settlement problems
could result in losses to the Trust due to subsequent declines in the value of
the security.

Other Investment Companies

         The Trust may invest up to 10% of its Managed Assets in securities of
other open- or closed-end investment companies that invest primarily in
securities of the types in which the Trust may invest directly. The Trust
generally expects to invest in other investment companies either during periods
when it has large amounts of uninvested cash, such as the period shortly after
the Trust receives the proceeds of the offering of its common shares, or during
periods when there is a shortage of attractive opportunities in the fixed
income market. As a shareholder in an investment company, the Trust would bear
its ratable share of that investment company's expenses, and would remain
subject to payment of the Trust's advisory and other fees and expenses with
respect to assets so invested. Holders of common shares would therefore be
subject to duplicative expenses to the extent the Trust invests in other
investment companies. BlackRock will take expenses into account when evaluating
the investment merits of an investment in an investment company relative to
available bond investments. The securities of other investment companies may
also be leveraged and will therefore be subject to the same leverage risks to
which the Trust is subject. As described in this prospectus in the sections
entitled "Risks" and "Borrowings and Preferred Shares," the net asset value and
market value of leveraged shares will be more volatile and the yield to
shareholders will tend to fluctuate more than the yield generated by
unleveraged shares. Investment companies may have investment policies that
differ from those of the Trust. In addition, to the extent the Trust invests in
other investment companies, the Trust will be dependent upon the investment and
research abilities of persons other than BlackRock.


                        BORROWINGS AND PREFERRED SHARES

         The Trust currently anticipates borrowing funds and/or issuing
Preferred Shares in an aggregate amount of approximately 35% of its Managed
Assets to purchase additional securities. This practice is known as "leverage."
The Trust may borrow from banks and other financial institutions and may also
borrow additional funds using such investment techniques and in such amounts as
BlackRock may from time to time determine. Of these investment techniques, the
Trust expects primarily to use reverse repurchase agreements and dollar roll
transactions. Changes in the value of the Trust's bond portfolio, including
bonds bought with the proceeds of the leverage, will be borne entirely by the
holders of common shares. If there is a net decrease, or increase, in the value
of the Trust's investment portfolio, the leverage will decrease, or increase
(as the case may be), the net asset value per common share to a greater extent
than if the Trust were not leveraged. During periods in which the Trust is
using leverage, the fees paid to BlackRock for advisory and sub-advisory
services will be higher than if the Trust did not use leverage because the fees
paid will be calculated on the basis of the Trust's total managed assets,
including the proceeds from the issuance of Preferred Shares and other
leverage. Leverage involves greater risks. The Trust's leveraging strategy may
not be successful.

Reverse Repurchase Agreements

         Borrowings may be made by the Trust, through reverse repurchase
agreements under which the Trust sells portfolio securities to financial
institutions such as banks and broker dealers and agrees to repurchase them at
a particular date and price. Such agreements are considered to be borrowings
under the Investment Company Act. The Trust may utilize reverse repurchase
agreements when it is anticipated that the interest income to be earned from
the investment of the proceeds of the transaction is greater than the interest
expense of the transaction.

Dollar Roll Transactions

         Borrowings may be made by the Trust through dollar roll transactions.
A dollar roll transaction involves a sale by the Trust of a mortgage-backed or
other security concurrently with an agreement by the Trust to repurchase a
similar security at a later date at an agreed-upon price. The securities that
are repurchased will bear the same interest rate and stated maturity as those
sold, but pools of mortgages collateralizing, those securities may have
different prepayment histories than those sold. During the period between the
sale and repurchase, the Trust will not be entitled to receive interest and
principal payments on the securities sold. Proceeds of the sale will be
invested in additional instruments for the Trust, and the income from these
investments will generate income for the Trust. If such income does not exceed
the income, capital appreciation and gain or loss that would have been realized
on the securities sold as part of the dollar roll, the use of this technique
will diminish the investment performance of the Trust compared with what the
performance would have been without the use of dollar rolls.

Preferred Shares

         Although the is Trust is authorized, under the Investment Company Act,
to issue Preferred Shares in an amount up to 50% of its total assets less its
liabilities and indebtedness, the Trust anticipates that under current market
conditions it will offer Preferred Shares representing no more than 10% of the
Trust's Managed Assets immediately after the issuance of the Preferred Shares.
If as a result of market conditions, or any other reason, the Trust does not
issue Preferred Shares, the Trust will limit its borrowing to 33 1/3% of the
Trust's Managed Assets. The Preferred Shares would have complete priority upon
distribution assets over the common shares. The issuance of Preferred Shares
will leverage the common shares. Although the timing and other terms of the
offering of Preferred Shares and the terms of the Preferred Shares would be
determined by the Trust's board of trustees, the Trust expects to invest the
proceeds of any Preferred Shares offering in intermediate and long-term bonds.
The Preferred Shares will pay adjustable rate dividends based on shorter-term
interest rates, which would be re-determined periodically by an auction
process. The adjustment period for Preferred Share dividends could be as short
as one day or as long as a year or more. So long as the Trust's portfolio is
invested in securities that provide a higher rate of return than the dividend
rate of the Preferred Shares, after taking expenses into consideration, the
leverage will cause you to receive a higher rate of income than if the Trust
were not leveraged.

         Under the Investment Company Act, the Trust is not permitted to issue
Preferred Shares unless immediately after such issuance the value of the
Trust's total assets, less all liabilities and indebtedness of the Trust, is at
least 200% of the liquidation value of the outstanding Preferred Shares (i.e.,
the liquidation value may not exceed 50% of the Trust's total assets less all
liabilities and indebtedness of the Trust). In addition, the Trust is not
permitted to declare any cash dividend or other distribution on its common
shares unless, at the time of such declaration, the value of the Trust's total
assets is at least 200% of the liquidation value of its outstanding Preferred
Shares plus its outstanding liabilities and indebtedness. If Preferred Shares
are issued, the Trust intends, to the extent possible, to purchase or redeem
Preferred Shares from time to time to the extent necessary in order to maintain
coverage of any Preferred Shares of at least 200%. In addition, as a condition
to obtaining ratings on the Preferred Shares, the terms of any Preferred Shares
issued are expected to include asset coverage maintenance provisions which will
require a reduction of indebtedness or the redemption of the Preferred Shares
in the event of non-compliance by the Trust and may also prohibit dividends and
other distributions on the common shares in such circumstances. In order to
meet redemption requirements, the Trust may have to liquidate portfolio
securities. Such liquidations and redemptions, or reductions in indebtedness,
would cause the Trust to incur related transaction costs and could result in
capital losses to the Trust. Prohibitions on dividends and other distributions
on the common shares could impair the Trust's ability to qualify as a regulated
investment company under the Internal Revenue Code of 1986 (the "Code"). If the
Trust has Preferred Shares outstanding, two of the Trust's trustees will be
elected by the holders of Preferred Shares voting separately as a class. The
remaining trustees of the Trust will be elected by holders of common shares and
Preferred Shares voting together as a single class. In the event the Trust
failed to pay dividends on Preferred Shares for two years, holders of Preferred
Shares would be entitled to elect a majority of the trustees of the Trust.

         The Trust will be subject to certain restrictions imposed by
guidelines of one or more rating agencies that may issue ratings for Preferred
Shares issued by the Trust. These guidelines are expected to impose asset
coverage or portfolio composition requirements that are more stringent than
those imposed on the Trust by the Investment Company Act and may limit the
ability of the Trust to borrow money through the use of reverse repurchase
agreements and dollar rolls and may limit the ability of the Trust to engage in
Strategic Transactions. It is not anticipated that these covenants or
guidelines will impede BlackRock from managing the Trust's portfolio in
accordance with the Trust's investment objective and policies.

         The Trust may also borrow money in an amount equal to 5% of its total
assets as a temporary measure for extraordinary or emergency purposes,
including the payment of dividends and the settlement of securities
transactions which otherwise might require untimely dispositions of Trust
securities.

         Assuming that the leverage will represent approximately 35% of the
Trust's Managed Assets, the interest and dividends paid on the leverage is a
blended annual average rate of ___%, the income generated by the Trust's
portfolio (net of estimated expenses) must exceed ___% in order to cover the
interest and dividend payments related to the leverage. Of course, these
numbers are merely estimates used for illustration. Actual interest rates on
leverage will vary frequently and may be significantly higher or lower than the
rate estimated above.

         The following table is furnished in response to requirements of the
Securities and Exchange Commission. It is designed to illustrate the effect of
leverage on common share total return, assuming investment portfolio total
returns (comprised of income and changes in the value of bonds held in the
Trust's portfolio) of -10%, -5%, 0%, 5% and 10%. These assumed investment
portfolio returns are hypothetical figures and are not necessarily indicative
of the investment portfolio returns experienced or expected to be experienced
by the Trust. See "Risks." The table further reflects leverage using debt and
Preferred Shares representing, in the aggregate, 35% of the Trust's Managed
Assets, net of expenses, Trust's currently projected blended average annual
leverage dividend and interest rate of _____%.

<TABLE>
<CAPTION>

<S>                                                      <C>         <C>         <C>       <C>       <C>
Assumed Portfolio Total Return (Net of Expenses).....    (10)%       (5)%        0%        5%        10%
Common Share Total Return............................      %          %           %         %          %

</TABLE>

         Common share total return is composed of two elements -- the common
share dividends paid by the Trust (the amount of which is largely determined by
the net investment income of the Trust after paying dividends and interest on
its leverage) and gains or losses on the value of the securities the Trust
owns. As required by Securities and Exchange Commission rules, the tables above
assume that the Trust is more likely to suffer capital losses than to enjoy
capital appreciation. For example, to assume a total return of 0% the Trust
must assume that the interest it receives on its debt security investments is
entirely offset by losses in the value of those bonds.


                                     RISKS

         The net asset value of, and dividends paid on, the common shares will
fluctuate with and be affected by, among other things, the risks described
below.

Newly Organized

         The Trust is a newly organized, diversified, closed-end management
investment company and has no operating history.

Market Discount Risk

         As with any stock, the price of the Trust's common shares will
fluctuate with market conditions and other factors. If common shares are sold,
the price received may be more or less than the original investment. Whether
investors will realize gains or losses upon the sale of common shares of the
Trust will not depend directly upon the Trust's net asset value, but will
depend upon the market price of the common shares at the time of sale. Since
the market price of the common shares will be affected by such factors as the
relative demand for and supply of the common shares in the market, general
market and economic conditions and other factors beyond the control of the
Trust, the Trust cannot predict whether the common shares will trade at, below
or above net asset value or at, below or above the public offering price.
Common shares are designed for long-term investors and should not be treated as
trading vehicles. Common shares of closed-end management investment companies
frequently trade at a discount from their net asset value. The Trust's common
shares may trade at a price that is less than the initial offering price. This
risk may be greater for investors who sell their common shares in a relatively
short period of time after completion of the initial offer because net asset
value will be reduced immediately following the initial offering by a 4.5%
sales load charge and organizational expenses and offering costs paid by the
Trust.

Senior Loans

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

Variable Debt Risk

         The absence of an active secondary market with respect to particular
variable and floating rate instruments could make it difficult for the Trust to
dispose of a variable or floating rate note if the issuer defaulted on its
payment obligation or during periods that the Trust is not entitled to exercise
its demand rights, and the Trust could, for these or other reasons, suffer a
loss with respect to such instruments. The Trust may invest in inverse floaters
which may be considered to be leveraged to the extent that their interest rate
varies by a magnitude that exceeds the magnitude of the change in the index
rate of interest. The higher degree of leverage inherent in inverse floaters is
associated with greater volatility in their market values.

Non-Investment Grade Securities Risk

         The Trust may invest in securities that are below investment grade,
which are commonly referred to as "junk bonds." Investments in lower grade
securities will expose the Trust to greater risks than if the Trust owned only
higher grade securities. Because of the substantial risks associated with lower
grade securities, you could lose money on your investment in shares of the
Trust, both in the short-term and the long-term.

         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 of higher rated securities. Adverse conditions could make
it difficult at times for the Trust to sell certain securities or could result
in lower prices than those used in calculating the Trust's net asset value.

         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 principal 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 by Moody's are regarded as having extremely poor
prospects of ever attaining any real investment standing. Securities rated D by
S&P are in default and the payment of interest and/or repayment of principal is
in arrears.

         Lower grade securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt severely the
market for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such 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.

Leverage Risk

         Leverage risk is the risk associated with the borrowing of funds and
other investment techniques, including the issuance of the Preferred Shares by
the Trust, to leverage the common shares.

         Leverage is a speculative technique which may expose the Trust to
greater risk and increase its costs. Increases and decreases in the value of
the Trust's portfolio will be magnified when the Trust uses leverage. For
example, leverage may cause greater swings in the Trust's net asset value or
cause the Trust to lose more than it invested. The Trust will also have to pay
interest on its borrowings, reducing the Trust's return. This interest expense
may be greater than the Trust's return on the underlying investment. There is
no assurance that the Trust's leveraging strategy will be successful.

         Reverse repurchase agreements involve the risks that the interest
income earned in the investment of the proceeds will be less than the interest
expense, that the market value of the securities sold by the Trust may decline
below the price of the securities the Trust is obligated to repurchase and that
the securities may not be returned to the Trust.

         Dollar roll transactions involve the risk that the market value of the
securities the Trust is required to purchase may decline below the agreed upon
repurchase price of those securities. If the broker/dealer to whom the Trust
sells securities becomes insolvent, the Trust's right to purchase or repurchase
securities may be restricted. Successful use of dollar rolls may depend upon
BlackRock's ability to correctly predict interest rates and prepayments. There
is no assurance that dollar rolls can be successfully employed.

         If leverage is employed, the net asset value and market value of the
common shares will be more volatile, and the yield to the holders of common
shares will tend to fluctuate with changes in the shorter-term interest rates
on the leverage. If the interest rate on the leverage approaches the net rate
of return on the Trust's investment portfolio, the benefit of leverage to the
holders of the common shares would be reduced. If the interest rate on the
leverage exceeds the net rate of return on the Trust's portfolio, the leverage
will result in a lower rate of return to the holders of common shares than if
the Trust were not leveraged. Because the intermediate and long-term bonds
included in the Trust's portfolio will typically pay fixed rates of interest
while the interest rates on the leverage vary from time to time, this could
occur even when both long-term and short-term rates rise. In addition, the
Trust will pay (and the holders of common shares will bear) any costs and
expenses relating to any leverage. Accordingly, the Trust cannot assure you
that the use of leverage would result in a higher yield or return to the
holders of the common shares.

         Any decline in the net asset value of the Trust's investments will be
borne entirely by the holders of common shares. Therefore, if the market value
of the Trust's portfolio declines, the leverage will result in a greater
decrease in net asset value to the holders of common shares than if the Trust
were not leveraged. This greater net asset value decrease will also tend to
cause a greater decline in the market price for the common shares. In extreme
cases, the Trust might be in danger of failing to maintain the required 200%
asset coverage, of losing its ratings on any Preferred Shares issued or the
Trust's current investment income might not be sufficient to meet the interest
payments on indebtedness or the dividend requirements on any Preferred Shares.
In order to counteract such an event, the Trust might need to reduce its
indebtedness and to liquidate investments in order to fund a redemption of some
or all of the Preferred Shares. Liquidation at times of low bond prices may
result in capital losses and may reduce returns to the holders of common
shares.

         While the Trust may from time to time consider reducing leverage in
response to actual or anticipated changes in interest rates in an effort to
mitigate the increased volatility of current income and net asset value
associated with leverage, there can be no assurance that the Trust will
actually reduce leverage in the future or that any reduction, if undertaken,
will benefit the holders of common shares. Changes in the future direction of
interest rates are very difficult to predict accurately. If the Trust were to
reduce leverage based on a prediction about future changes to interest rates,
and that prediction turned out to be incorrect, the reduction in leverage would
likely reduce the income and/or total returns to holders of common shares
relative to the circumstance where the Trust had not reduced leverage. The
Trust may decide that this risk outweighs the likelihood of achieving the
desired reduction to volatility in income and share price if the prediction
were to turn out to be correct, and determine not to reduce leverage as
described above.

         The Trust may invest in the securities of other investment companies.
Such securities may also be leveraged and will therefore be subject to the
leverage risks described above. This additional leverage may, in certain market
conditions, reduce the net asset value of the Trust's common shares and the
returns to the holders of common shares.

Interest Rate Risk

         The other securities held in the Trust's portfolio could be affected
by interest rate fluctuations. The value of Trust common shares will usually
change in response to interest rate fluctuations. When interest rates decline,
the value of fixed-rate securities can be expected to rise. Conversely, when
interest rates rise, the value of fixed-rate securities can be expected to
decline. Although changes in prevailing interest rates can be expected to cause
some fluctuations in the value of variable and 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 interest rates than
fixed-rate instruments. Fluctuations in the value of the Trust's securities
will not affect interest income on existing securities but will be reflected in
the Trust's net asset value. The Trust may utilize certain strategies,
including taking positions in futures or interest rate swaps, for the purpose
of reducing the interest rate sensitivity of the portfolio and decreasing the
Trust's exposure to interest rate risk, although there is no assurance that it
will do so or that such strategies will be successful. The Trust is intended to
have a relatively low level of interest rate risk.

Credit Risk

         Credit risk is the risk that an issuer of a security will become
unable to meet its obligation to make interest and principal payments. In
general, lower rated securities carry a greater degree of risk that the issuer
will lose its ability to make interest and principal payments, which could have
a negative impact on the Trust's net asset value or dividends. Under normal
circumstances, the Trust will invest substantially all of its portfolio in
securities that are rated Ba/BB or B by Moody's, S&P or Fitch or that are
unrated but judged to be of comparable quality by BlackRock. The Trust's
investments in lower-grade securities will expose it to a great deal of credit
risk. Securities rated Ba/BB or B are regarded as having predominately
speculative characteristics with respect to the issuer's capacity to pay
interest and repay principal, and these securities are commonly referred to as
"junk bonds." These securities are subject to a greater risk of default. The
prices of these lower grade securities are more sensitive to negative
developments, such as a decline in the issuer's revenues or a general economic
downturn, than are the prices of higher grade securities. Lower grade
securities tend to be less liquid than investment grade securities. The market
values of lower grade securities tend to be more volatile than investment grade
securities. In addition, the Trust's use of credit derivatives will expose it
to additional risk in the event that the bonds underlying the derivative
default. In addition, the Trust's use of credit derivatives will expose it to
additional risk in the event that the bonds underlying the derivatives default.

Non-U.S. Securities Risk

         Investing in Non-U.S. securities may involve certain risks not
involved in domestic investments, including, but not limited to: (1) future
foreign economic, financial, political and social developments; (2) different
legal systems; (3) the possible imposition of exchange controls or other
foreign governmental laws or restrictions; (4) lower trading volume; (5) much
greater price volatility and illiquidity of certain foreign securities markets;
(6) different trading and settlement practices; (7) less governmental
supervision; (8) high and volatile rates of inflation; (9) fluctuating interest
rates; (10) less publicly available information; and (11) different accounting,
auditing and financial record keeping standards and requirements.

         Certain countries in which the Trust may invest historically have
experienced, and may continue to experience, high rates of inflation, high
interest rates, exchange rate fluctuations, large amounts of external debt,
balance of payments and trade difficulties and extreme poverty and
unemployment. Many of these countries are also characterized by political
uncertainty and instability. The cost of servicing external debt will generally
be adversely affected by rising international interest rates because many
external debt obligations bear interest at rates which are adjusted based upon
international interest rates. In addition, with respect to certain foreign
countries, there is a risk of: (1) the possibility of expropriation of assets;
(2) confiscatory taxation; (3) difficulty in obtaining or enforcing a court
judgment; (4) economic, political or social instability; and (5) diplomatic
developments that could affect investments in those countries. Certain
investments in foreign securities also may be subject to foreign withholding
taxes. Dividend income from foreign corporations may not be eligible for the
reduced rate for qualified dividend income. In addition, individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as: (1) growth of gross domestic product; (2) rates of inflation; (3)
capital reinvestment; (4) resources; (5) self-sufficiency; and (6) balance of
payments position.

         As a result of these potential risks, BlackRock may determine that,
notwithstanding otherwise favorable investment criteria, it may not be
practicable or appropriate to invest in a particular country. The Trust may
invest in countries in which foreign investors, including BlackRock, have had
no or limited prior experience.

         The Trust may engage in foreign currency transactions, including
foreign currency forward contracts, options, swaps, and other strategic
transactions in connection with its investments in Non U.S. Securities.

Foreign Currency Risk

         Because the Trust may invest in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates may affect the value of securities in the Trust and the unrealized
appreciation or depreciation of investments. Currencies of certain countries
may be volatile and therefore may affect the value of securities denominated in
such currencies, which means that the Trust's net asset value could decline as
a result of changes in the exchange rates between foreign currencies and the
U.S. dollar.

Risks Associated With Mortgage-Related Securities

         The risks associated with mortgage-related securities include:

o        credit risks associated with the performance of the underlying
         mortgage properties and of the borrowers owning these properties;

o        adverse changes in economic conditions and circumstances, which are
         more likely to have an adverse impact on mortgage-related securities
         secured by loans on certain types of commercial properties than on
         those secured by loans on residential properties;

o        prepayment risk, which can lead to significant fluctuations in value
         of the mortgage-related security;

o        loss of all or part of the premium, if any, paid; and

o        decline in the market value of the security, whether resulting from
         changes in interest rates or prepayments on the underlying mortgage
         collateral.

Prepayment Risks

         The yield and maturity characteristics of mortgage-related securities
and other asset-backed securities differ from traditional debt securities. A
major difference is that the principal amount of the obligations may normally
be prepaid at any time because the underlying assets (i.e., loans) generally
may be prepaid at any time, although there may be limitations on prepayments in
CMBS. In calculating the average weighted maturity of the Trust, the maturity
of mortgage-related and other asset-backed securities held by the Trust will be
based on estimates of average life which take prepayments into account. These
estimates, however, may not accurately predict actual prepayment rates.
Prepayment risks include the following:

o        the relationship between prepayments and interest rates may give some
         lower grade mortgage-related and asset-backed securities less
         potential for growth in value than conventional bonds with comparable
         maturities;

o        in addition, when interest rates fall, the rate of prepayments tends
         to increase. During such periods, the reinvestment of prepayment
         proceeds by the Trust will generally be at lower rates than the rates
         that were carried by the obligations that have been prepaid;

o        because of these and other reasons, mortgage-related or asset-backed
         security's total return and maturity may be difficult to predict; and

o        to the extent that the Trust purchases mortgage-related or
         asset-backed securities at a premium, prepayments may result in loss
         of the Trust's principal investment to the extent of premium paid.

Risks Associated with Asset-Backed Securities

Asset-backed securities involve certain risks in addition to those presented
by mortgage-related securities:

o        primarily, these securities do not have the benefit of the same
         security interest in the underlying collateral as mortgage-related
         securities and are more dependent on the borrower's ability to pay;

o        credit card receivables are generally unsecured, and the debtors are
         entitled to the protection of a number of state and Federal consumer
         credit laws, many of which give debtors the right to set off certain
         amounts owed on the credit cards, thereby reducing the balance due;
         and

most issuers of automobile receivables permit the servicers to retain
possession of the underlying obligations. If the servicer were to sell these
obligations to another party, there is a risk that the purchaser would acquire
an interest superior to that of the holders of the related automobile
receivables. In addition, because of the large number of vehicles involved in
a typical issuance and technical requirements under state laws, the trustee
for the holders of the automobile receivables may not have an effective
security interest in all of the obligations backing such receivables. There is
a possibility that recoveries on repossessed collateral may not, in some
cases, be able to support payments on these securities.

Risks of Collateralized Bond Obligations

         Income from the pool of lower grade securities collateralizing CBOs is
typically separated into tranches representing different degrees of credit
quality. The top tranche of CBOs, which represents the highest credit quality
in the pool, has the greatest collateralization and pays the lowest interest
rate. Lower CBO tranches represent lower degrees of credit quality and pay
higher interest rates to compensate for the attendant risks. The bottom tranche
specifically receives the residual interest payments (i.e., money that is left
over after the higher tiers have been paid) rather than a fixed interest rate.
The return on the lower tranches of CBOs are especially sensitive to the rate
of defaults in the collateral pool, which increases the risk of the Trust
losing its investments in lower CBO tranches.

Liquidity Risk

         The Trust may invest in securities for which there is no readily
available trading market or which are otherwise illiquid. The Trust may not be
able to readily dispose of such securities at prices that approximate those at
which the Trust could sell such securities if they were more widely-traded and,
as a result of such illiquidity, the Trust may have to sell other investments
or engage in borrowing transactions if necessary to raise cash to meet its
obligations. In addition, the limited liquidity could affect the market price
of the securities, thereby adversely affecting the Trust's net asset value and
ability to make dividend distributions.

Market Disruption Risk

         The war with Iraq, its aftermath and the continuing occupation of the
country by coalition forces are likely to have a substantial impact on the U.S.
and world economies and securities markets. The duration and nature of the war
and occupation and the potential costs of rebuilding the Iraqi infrastructure
and political systems cannot be predicted with any certainty. The war and
occupation, terrorism and related geopolitical risks have led, and may in the
future lead, to increased short-term market volatility and may have adverse
long-term effects on U.S. and world economies and markets generally. Those
events could also have an acute effect on individual issuers or related groups
of issuers. These risks could also adversely affect securities markets,
interest rates, auctions, secondary trading, ratings, credit risk, inflation,
deflation and other factors relating to the common shares.

Strategic Transactions

         Strategic Transactions in which the Trust may engage also involve
certain risks and special considerations, including engaging in hedging and
risk management transactions such as interest rate and foreign currency
transactions, options, futures, swaps and other derivatives transactions.
Strategic Transactions will be entered into to seek to manage the risks of the
Trust's portfolio of securities, but may have the effect of limiting the gains
from favorable market movements. Strategic Transactions involve risks,
including (1) that the loss on the Strategic Transaction position may be larger
than the gain in the portfolio position being hedged and (2) that the
derivative instruments used in Strategic Transactions may not be liquid and may
require the Trust to pay additional amounts of money. Successful use of
Strategic Transactions depends on BlackRock's ability to predict correctly
market movements which, of course, cannot be assured. Losses on Strategic
Transactions may reduce the Trust's net asset value and its ability to pay
dividends if they are not offset by gains on the portfolio positions being
hedged. The Trust may also lend the securities it owns to others, which allows
the Trust the opportunity to earn additional income. Although the Trust will
require the borrower of the securities to post collateral for the loan and the
terms of the loan will require that the Trust be able to reacquire the loaned
securities if certain events occur, the Trust is still subject to the risk that
the borrower of the securities may default, which could result in the Trust
losing money, which would result in a decline in the Trust's net asset value.
The Trust may also purchase securities for delayed settlement. This means that
the Trust is generally obligated to purchase the securities at a future date
for a set purchase price, regardless of whether the value of the securities is
more or less than the purchase price at the time of settlement.

Anti-Takeover Provisions

         The Trust's Agreement and Declaration of Trust contains provisions
limiting (1) the ability of other entities or persons to acquire control of the
Trust, (2) the Trust's freedom to engage in certain transactions, and (3) the
ability of the Trust's board of trustees or shareholders to amend the Trust's
Agreement and Declaration of Trust. These provisions of the Trust's Agreement
and Declaration of Trust may be regarded as "anti-takeover" provisions. These
provisions could have the effect of depriving the shareholders of opportunities
to sell their common shares at a premium over prevailing market prices by
discouraging a third party from seeking to obtain control of the Trust in a
tender offer or similar transaction. See "Certain Provisions in the Agreement
and Declaration of Trust."


                           HOW THE TRUST MANAGES RISK

Investment Limitations

         The Trust has adopted certain investment limitations designed to limit
investment risk. These limitations are fundamental and may not be changed
without the approval of the holders of a majority of the outstanding common
shares and, if issued, Preferred Shares voting together as a single class, and
the approval of the holders of a majority of the Preferred Shares voting as a
separate class. Among other restrictions, the trust may not invest 25% or more
of the value of its total assets in any one industry, provided that securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities will not be considered to represent an industry.

         The Trust may become subject to guidelines which are more limiting
than its investment restrictions in order to obtain and maintain ratings from
Moody's or S&P or another rating agency on the Preferred Shares that it intends
to issue. The Trust does not anticipate that such guidelines would have a
material adverse effect on the Trust's common shareholders or the Trust's
ability to achieve its investment objectives. See "Investment Objective and
Policies" in the Statement of Additional Information for a complete list of the
fundamental and non-fundamental investment policies of the Trust.

Management of Investment Portfolio and Capital Structure to Limit Leverage Risk

         The Trust may take certain actions if short-term interest rates
increase or market conditions otherwise change (or the Trust anticipates such
an increase or change) and the Trust's leverage begins (or is expected) to
adversely affect common shareholders. In order to attempt to offset such a
negative impact of leverage on common shareholders, the Trust may shorten the
average maturity of its investment portfolio (by investing in short-term
securities) or may reduce its indebtedness or extend the maturity of
outstanding Preferred Shares or unwind other leverage transactions. The Trust
may also attempt to reduce the leverage by redeeming or otherwise purchasing
Preferred Shares. As explained above under "Risks--Leverage," the success of
any such attempt to limit leverage risk depends on BlackRock's ability to
accurately predict interest rate or other market changes. Because of the
difficulty of making such predictions, the Trust may never attempt to manage
its capital structure in the manner described in this paragraph. If market
conditions suggest that additional leverage would be beneficial, the Trust may
sell previously unissued Preferred Shares or Preferred Shares that the Trust
previously issued but later repurchased.

Strategic Transactions

         The Trust may use various investment strategies designed to limit the
risk of bond price fluctuations and to preserve capital. These strategies
include using swaps, financial futures contracts, options on financial futures
or options based on either an index of long-term securities or on taxable debt
securities whose prices, in the opinion of BlackRock, correlate with the prices
of the Trust's investments.


                            MANAGEMENT OF THE TRUST

Trustees and Officers

         The board of trustees is responsible for the overall management of the
Trust, including supervision of the duties performed by BlackRock. There will
be eight trustees of the Trust. A majority of the trustees will not be
"interested persons" as defined in the Investment Company Act. The name and
business address of the trustees and officers of the Trust and their principal
occupations and other affiliations during the past five years are set forth
under "Management of the Trust" in the Statement of Additional Information.

Investment Advisor and Sub-Advisor

         BlackRock Advisors acts as the Trust's investment advisor. BlackRock
Financial Management acts as the Trust's sub-advisor. BlackRock Advisors,
located at 100 Bellevue Parkway, Wilmington, Delaware 19809, and BlackRock
Financial Management, located at 40 East 52nd Street, New York, New York 10022,
are wholly owned subsidiaries of BlackRock, Inc., which is one of the largest
publicly traded investment management firms in the United States with
approximately $321 billion of assets under management at March 31, 2004.
BlackRock manages assets on behalf of institutional and individual investors
worldwide through a variety of equity, fixed income, liquidity and alternative
investment products, including the BlackRock FundsSM and BlackRock Liquidity
Funds. In addition, BlackRock provides risk management and investment system
services to institutional investors under the BlackRock Solutions(R) name.

         The BlackRock organization has over 16 years of experience managing
closed-end funds. At March 31, 2004, advised a closed-end family of 50 active
funds with approximately $14.7 billion in assets. Clients are served from the
company's headquarters in New York City, as well as offices in Wilmington, San
Francisco, Boston, Edinburgh, Tokyo and Hong Kong. BlackRock, Inc. is a member
of The PNC Financial Services Group, Inc., one of the largest diversified
financial services organizations in the United States, and is majority-owned by
PNC and by BlackRock employees.

Investment Philosophy

         BlackRock applies the same controlled-duration, active relative value
sector rotation style to the management of all its fixed income mandates.
BlackRock manages fixed income portfolios by using a strategy that invests in
sectors of the fixed income market that BlackRock believes are undervalued by
moving out of sectors that BlackRock believes are fairly or overvalued.
BlackRock researches and is active in analyzing the sectors which it believes
are under, fairly and overvalued in order to achieve a portfolio's investment
objective. BlackRock has in-depth expertise in all sectors of the fixed income
market. BlackRock specializes in managing fixed income portfolios against both
published and customized benchmarks and has been doing this since the inception
of its fixed income products in 1988.

         In selecting securities for the Trust's portfolio, BlackRock will seek
to identify issuers and industries that BlackRock believes are likely to
experience stable or improving financial conditions. BlackRock believes this
strategy should enhance the Trust's ability to seek total return. BlackRock's
analysis includes:

         o        credit research on the issuers' financial strength;

         o        assessment of the issuers' ability to meet principal and
                  interest payments;

         o        general industry trends;

         o        the issuers' managerial strength;

         o        changing financial conditions;

         o        borrowing requirements or debt maturity schedules; and

         o        the issuers' responsiveness to change in business conditions
                  and interest rates.

         BlackRock considers relative values among issuers based on anticipated
cash flow, interest or dividend coverage, asset coverage and earnings
prospects.

         The BlackRock organization's philosophy has not changed since the
inception of the firm. The technology that enables BlackRock to implement its
investment strategies, however, is constantly evolving. BlackRock's commitment
to maintaining and developing its state-of-the-art analytics in the most
efficient manner is manifest in (1) the development of proprietary tools, (2)
the use of external tools to assist in its analysis, and (3) the integration of
all of these tools into a unique portfolio level risk management system. By
continually updating our analytics and systems, BlackRock attempts to better
quantify and evaluate the risk of each investment decision.

         BlackRock's style is designed with the objective of generating excess
returns with lower risk than its benchmarks and competitors. The use of these
advanced analytics attempts to provide real time analysis of a vast array of
risk measures designed to measure the potential impact of various strategies on
total return. As a result BlackRock seeks to add consistent value and control
performance volatility consistent with the Trust's investments.

BlackRock's Portfolio Management Team

         BlackRock uses a team approach to managing its portfolios. BlackRock
believes that this approach offers substantial benefits over one that is
dependent on the market wisdom or investment expertise of only a few
individuals.

Investment Management Agreement

         Pursuant to an investment management agreement between BlackRock
Advisors and the Trust, the Trust has agreed to pay for the investment advisory
services and facilities provided by BlackRock Advisors a fee payable monthly in
arrears at an annual rate equal to      % of the average weekly value of the
Trust's Managed Assets (the "management fee"). The Trust will also reimburse
BlackRock Advisors for certain expenses BlackRock Advisors incurs in connection
with performing certain services for the Trust. In addition, with the approval
of the board of trustees, a pro rata portion of the salaries, bonuses, health
insurance, retirement benefits and similar employment costs for the time spent
on Trust operations (other than the provision of services required under the
investment management agreement) of all personnel employed by BlackRock
Advisors who devote substantial time to Trust operations may be reimbursed to
BlackRock Advisors. Managed Assets are the total assets of the Trust, which
includes any proceeds from the Preferred Shares, minus the sum of accrued
liabilities (other than indebtedness attributable to leverage). This means that
during periods in which the Trust is using leverage, the fee paid to BlackRock
Advisors will be higher than if the Trust did not use leverage because the fee
is calculated as a percentage of the Trust's Managed Assets, which include
those assets purchased with leverage.

         In addition to the management fee of BlackRock Advisors, the Trust
pays all other costs and expenses of its operations, including compensation of
its trustees (other than those affiliated with BlackRock Advisors), custodian,
transfer and dividend disbursing agent expenses, legal fees, leverage expenses,
rating agency fees listing fees and expenses, expenses of independent auditors,
expenses of repurchasing shares, expenses of preparing, printing and
distributing shareholder reports, notices, proxy statements and reports to
governmental agencies, and taxes, if any.


                                NET ASSET VALUE

         The net asset value of the common shares of the Trust will be computed
based upon the value of the Trust's portfolio securities and other assets. Net
asset value per common share will be determined daily on each day that the New
York Stock Exchange is open for business as of the close of the regular trading
session on the New York Stock Exchange. The Trust calculates net asset value
per common share by subtracting liabilities (including accrued expenses or
dividends) from the total assets of the Trust (the value of the securities plus
cash or other assets, including interest accrued but not yet received) and
dividing the result by the total number of common shares of the Trust.

         The Trust values its securities primarily by using market quotations.
A portion of the Trust's fixed income investments will be valued utilizing one
or more pricing services approved by the Trust's board of trustees. Short-term
debt securities having a remaining maturity of 60 days or less when purchased
and debt securities originally purchased with maturities in excess of 60 days
but which currently have maturities of 60 days or less may be valued at cost
adjusted for amortization of premiums and accretion of discounts. Any
securities or other assets for which current market quotations are not readily
available are valued at their fair value as determined in good faith under
procedures established by and under the general supervision and responsibility
of the Trust's board of trustees.


                                 DISTRIBUTIONS

         Commencing with the Trust's initial dividend, the Trust intends to
make regular monthly cash distributions of all or a portion of its net
investment income to common shareholders. We expect to declare the initial
monthly dividend on the Trust's common shares within approximately 45 days
after completion of this offering and to pay that initial monthly dividend
approximately 60 to 90 days after completion of this offering. The Trust will
pay common shareholders at least annually all, or a portion of, its net
investment income after the payment of dividends and interest, if any, owed
with respect to any outstanding Preferred Shares or other forms of leverage
utilized by the Trust. If the Trust realizes a long-term capital gain, it will
be required to allocate such gain between the common shares and any Preferred
Shares issued by the Trust in proportion to the total dividends paid to each
class for the year in which the income is realized.

         Various factors will affect the level of the Trust's income, including
the asset mix, the average maturity of the Trust's portfolio, the amount of
leverage utilized by the Trust and the Trust's use of hedging. To permit the
Trust to maintain a more stable monthly distribution, the Trust may from time
to time distribute less than the entire amount of income earned in a particular
period. The undistributed income would be available to supplement future
distributions. As a result, the distributions paid by the Trust for any
particular monthly period may be more or less than the amount of income
actually earned by the Trust during that period. Undistributed income will add
to the Trust's net asset value and, correspondingly, distributions from
undistributed income will deduct from the Trust's net asset value. Shareholders
will automatically have all dividends and distributions reinvested in common
shares of the Trust issued by the Trust or purchased in the open market in
accordance with the Trust's dividend reinvestment plan unless an election is
made to receive cash. See "Dividend Reinvestment Plan."


                           DIVIDEND REINVESTMENT PLAN

         Unless the registered owner of common shares elects to receive cash by
contacting the Plan Agent, all dividends declared for your common shares of the
Trust will be automatically reinvested by EquiServe Trust Company N.A. (the
"Plan Agent"), agent for shareholders in administering the Trust's Dividend
Reinvestment Plan (the "Plan"), in additional common shares of the Trust. If a
registered owner of common shares elects not to participate in the Plan, you
will receive all dividends in cash paid by check mailed directly to you (or, if
the shares are held in street or other nominee name, then to such nominee) by
EquiServe Trust Company N.A., as dividend disbursing agent. You may elect not
to participate in the Plan and to receive all dividends in cash by sending
written instructions or by contacting EquiServe Trust Company N.A., as dividend
disbursing agent, at the address set forth below. Participation in the Plan is
completely voluntary and may be terminated or resumed at any time without
penalty by contacting the Plan Agent before the dividend record date; otherwise
such termination or resumption will be effective with respect to any
subsequently declared dividend or other distribution. Some brokers may
automatically elect to receive cash on your behalf and may re-invest that cash
in additional common shares of the Trust for you. If you wish for all dividends
declared on your common shares of the Trust to be automatically reinvested
pursuant to the Plan, please contact your broker.

         The Plan Agent will open an account for each common shareholder under
the Plan in the same name in which such common shareholder's common shares are
registered. Whenever the Trust declares a dividend or other distribution
(together, a "dividend") payable in cash, non-participants in the Plan will
receive cash and participants in the Plan will receive the equivalent in common
shares. The common shares will be acquired by the Plan Agent for the
participants' accounts, depending upon the circumstances described below,
either (i) through receipt of additional unissued but authorized common shares
from the Trust ("newly issued common shares") or (ii) by purchase of
outstanding common shares on the open market ("open-market purchases") on the
New York Stock Exchange or elsewhere.

         If, on the payment date for any dividend, the market price per common
share plus estimated brokerage commissions is greater than the net asset value
per common share (such condition being referred to herein as "market premium"),
the Plan Agent will invest the dividend amount in newly issued common shares,
including fractions, on behalf of the participants. The number of newly issued
common shares to be credited to each participant's account will be determined
by dividing the dollar amount of the dividend by the net asset value per common
share on the payment date; provided that, if the net asset value per common
share is less than 95% of the market price per common share on the payment
date, the dollar amount of the dividend will be divided by 95% of the market
price per common share on the payment date.

         If, on the payment date for any dividend, the net asset value per
common share is greater than the market value per common share plus estimated
brokerage commissions (such condition being referred to herein as "market
discount"), the Plan Agent will invest the dividend amount in common shares
acquired on behalf of the participants in open-market purchases.

         In the event of a market discount on the payment date for any
dividend, the Plan Agent will have until the last business day before the next
date on which the common shares trade on an "ex-dividend" basis or 30 days
after the payment date for such dividend, whichever is sooner (the "last
purchase date"), to invest the dividend amount in common shares acquired in
open-market purchases. It is contemplated that the Trust will pay monthly
dividends. Therefore, the period during which open-market purchases can be made
will exist only from the payment date of each dividend through the date before
the next "ex-dividend" date which typically will be approximately ten days. If,
before the Plan Agent has completed its open-market purchases, the market price
of a common share exceeds the net asset value per common share, the average per
common share purchase price paid by the Plan Agent may exceed the net asset
value of the common shares, resulting in the acquisition of fewer common shares
than if the dividend had been paid in newly issued common shares on the
dividend payment date. Because of the foregoing difficulty with respect to open
market purchases, if the Plan Agent is unable to invest the full dividend
amount in open market purchases during the purchase period or if the market
discount shifts to a market premium during the purchase period, the Plan Agent
may cease making open-market purchases and may invest the uninvested portion of
the dividend amount in newly issued common shares at the net asset value per
common share at the close of business on the last purchase date; provided that,
if the net asset value per common share is less than 95% of the market price
per common share on the payment date, the dollar amount of the dividend will be
divided by 95% of the market price per common share on the payment date.

         The Plan Agent maintains all shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the accounts, including
information needed by shareholders for tax records. Common shares in the
account of each Plan participant will be held by the Plan Agent on behalf of
the Plan participant, and each shareholder proxy will include those shares
purchased or received pursuant to the Plan. The Plan Agent will forward all
proxy solicitation materials to participants and vote proxies for shares held
under the Plan in accordance with the instructions of the participants.

         In the case of shareholders such as banks, brokers or nominees which
hold shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of common shares certified from
time to time by the record shareholder's name and held for the account of
beneficial owners who participate in the Plan.

         There will be no brokerage charges with respect to common shares
issued directly by the Trust. However, each participant will pay a pro rata
share of brokerage commissions incurred in connection with open-market
purchases. The automatic reinvestment of dividends will not relieve
participants of any Federal, state or local income tax that may be payable (or
required to be withheld) on such dividends. See "Federal Income Tax Matters."
Participants that request a sale of shares through the Plan Agent are subject
to $2.50 sales fee and a $0.15 per share sold brokerage commission.

         The Trust reserves the right to amend or terminate the Plan. There is
no direct service charge to participants in the Plan; however, the Trust
reserves the right to amend the Plan to include a service charge payable by the
participants.

         All correspondence concerning the Plan should be directed to the Plan
Agent at EquiServe Trust Company, N.A., P.O. Box 43011, Providence, Rhode
Island 02940-3011, telephone: (800) 699-1236.


                             DESCRIPTION OF SHARES

Common Shares

         The Trust is an unincorporated statutory trust organized under the
laws of Delaware pursuant to an Agreement and Declaration of Trust dated as of
April 20, 2004. The Trust is authorized to issue an unlimited number of common
shares of beneficial interest, par value $.001 per share. Each common share has
one vote and, when issued and paid for in accordance with the terms of this
offering, will be fully paid and non-assessable, except that the trustees shall
have the power to cause shareholders to pay expenses of the Trust by setting
off charges due from shareholders from declared but unpaid dividends or
distributions owed the shareholders and/or by reducing the number of common
shares owned by each respective shareholder. The holders of common shares will
not be entitled to receive any distributions from the Trust unless all accrued
dividends and interest and dividend payments with respect to the Trust's
leverage have been paid, unless certain asset coverage (as defined in the
Investment Company Act) tests with respect to the leverage employed by the
Trust are satisfied after giving effect to the distributions and unless certain
other requirements imposed by any rating agencies rating any Preferred Shares
issued by the Trust have been met. See "--Preferred Shares" below. All common
shares are equal as to dividends, assets and voting privileges and have no
conversion, preemptive or other subscription rights. The Trust will send annual
and semi-annual reports, including financial statements, to all holders of its
common shares.

         The Trust has no present intention of offering any additional shares
other than the possible issuance of Preferred Shares. Any additional offerings
of shares will require approval by the Trust's board of trustees. Any
additional offering of common shares will be subject to the requirements of the
Investment Company Act, which provides that shares may not be issued at a price
below the then current net asset value, exclusive of sales load, except in
connection with an offering to existing holders of common shares or with the
consent of a majority of the Trust's outstanding voting securities.

         It is anticipated that the Trust's common shares will be listed on the
New York Stock Exchange under the symbol "  ".

         The Trust's net asset value per share generally increases when
interest rates decline, and decreases when interest rates rise, and these
changes are likely to be greater because the Trust intends to have a leveraged
capital structure. Net asset value will be reduced immediately following the
offering of common shares by the amount of the sales load and organizational
expenses and offering costs paid by the Trust. See "Use of Proceeds."

         Unlike open-end funds, closed-end funds like the Trust do not
continuously offer shares and do not provide daily redemptions. Rather, if a
shareholder determines to buy additional common shares or sell shares already
held, the shareholder may do so by trading through a broker on the New York
Stock Exchange or otherwise. Shares of closed-end investment companies
frequently trade on an exchange at prices lower than net asset value. Shares of
closed-end investment companies like the Trust that invest in bonds have,
during some periods, traded at prices higher than net asset value and, during
other periods, have traded at prices lower than net asset value. Because the
market value of the common shares may be influenced by such factors as dividend
levels (which are in turn affected by expenses), call protection on its
portfolio securities, dividend stability, portfolio credit quality, net asset
value, relative demand for and supply of such shares in the market, general
market and economic conditions and other factors beyond the control of the
Trust, the Trust cannot assure you that common shares will trade at a price
equal to or higher than net asset value in the future. The common shares are
designed primarily for long-term investors and you should not purchase the
common shares if you intend to sell them soon after purchase. See "Borrowings
and Preferred Shares" and the Statement of Additional Information under
"Repurchase of Common Shares."

Preferred Shares

         The Agreement and Declaration of Trust provides that the Trust's board
of trustees may authorize and issue Preferred Shares with rights as determined
by the board of trustees, by action of the board of trustees without the
approval of the holders of the common shares. Holders of common shares have no
preemptive right to purchase any Preferred Shares that might be issued.

         The Trust may elect to issue Preferred Shares as part of its leverage
strategy. If Preferred Shares are issued, the Trust currently intends to issue
Preferred Shares representing approximately 33 1/3% of the Trust's Managed
Assets immediately after the Preferred Shares are issued. The board of trustees
also reserves the right to change the foregoing percentage limitation and may
issue Preferred Shares to the extent permitted by the Investment Company Act,
which currently limits the aggregate liquidation preference of all outstanding
Preferred Shares to 50% of the value of the Trust's total assets less
liabilities and indebtedness of the Trust. We cannot assure you, however, that
any Preferred Shares will be issued. Although the terms of any Preferred
Shares, including dividend rate, liquidation preference and redemption
provisions, will be determined by the board of trustees, subject to applicable
law and the Agreement and Declaration of Trust, it is likely that the Preferred
Shares will be structured to carry a relatively short-term dividend rate
reflecting interest rates on short-term bonds, by providing for the periodic
re-determination of the dividend rate at relatively short intervals through an
auction, remarketing or other procedure. The Trust also believes that it is
likely that the liquidation preference, voting rights and redemption provisions
of the Preferred Shares will be similar to those stated below.

Liquidation Preference

         In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Trust, the holders of Preferred Shares will be entitled to
receive a preferential liquidating distribution, which is expected to equal the
original purchase price per Preferred Share plus accrued and unpaid dividends,
whether or not declared, before any distribution of assets is made to holders
of common shares. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of Preferred Shares will
not be entitled to any further participation in any distribution of assets by
the Trust.

Voting Rights

         The Investment Company Act requires that the holders of any Preferred
Shares, voting separately as a single class, have the right to elect at least
two trustees at all times. The remaining trustees will be elected by holders of
common shares and Preferred Shares, voting together as a single class. In
addition, subject to the prior rights, if any, of the holders of any other
class of senior securities outstanding, the holders of any Preferred Shares
have the right to elect a majority of the trustees of the Trust at any time two
years' dividends on any Preferred Shares are unpaid. The Investment Company Act
also requires that, in addition to any 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 (1) adopt any plan of reorganization that would adversely affect the
Preferred Shares, and (2) take any action requiring a vote of security holders
under Section 13(a) of the Investment Company Act, including, among other
things, changes in the Trust's subclassification as a closed-end investment
company or changes in its fundamental investment restrictions. See "Certain
Provisions in the Agreement and Declaration of Trust." As a result of these
voting rights, the Trust's ability to take any such actions may be impeded to
the extent that there are any Preferred Shares outstanding. The board of
trustees presently intends that, except as otherwise indicated in this
prospectus and except as otherwise required by applicable law, holders of
Preferred Shares will have equal voting rights with holders of common shares
(one vote per share, unless otherwise required by the Investment Company Act)
and will vote together with holders of common shares as a single class.

         The affirmative vote of the holders of a majority of the outstanding
Preferred Shares, voting as a separate class, will be required to amend, alter
or repeal any of the preferences, rights or powers of holders of Preferred
Shares so as to affect materially and adversely such preferences, rights or
powers, or to increase or decrease the authorized number of Preferred Shares.
The class vote of holders of Preferred Shares described above will in each case
be in addition to any other vote required to authorize the action in question.

Redemption, Purchase and Sale of Preferred Shares by the Trust

         The terms of the Preferred Shares are expected to provide that (1)
they are redeemable by the Trust in whole or in part at the original purchase
price per share plus accrued dividends per share, (2) the Trust may tender for
or purchase Preferred Shares and (3) the Trust may subsequently resell any
shares so tendered for or purchased. Any redemption or purchase of Preferred
Shares by the Trust will reduce the leverage applicable to the common shares,
while any resale of shares by the Trust will increase that leverage.

         The discussion above describes the possible offering of Preferred
Shares by the Trust. If the board of trustees determines to proceed with such
an offering, the terms of the Preferred Shares may be the same as, or different
from, the terms described above, subject to applicable law and the Trust's
Agreement and Declaration of Trust. The board of trustees, without the approval
of the holders of common shares, may authorize an offering of Preferred Shares
or may determine not to authorize such an offering, and may fix the terms of
the Preferred Shares to be offered.


          CERTAIN PROVISIONS IN THE AGREEMENT AND DECLARATION OF TRUST

         The Agreement and Declaration of Trust includes provisions that could
have the effect of limiting the ability of other entities or persons to acquire
control of the Trust or to change the composition of its board of trustees.
This could have the effect of depriving shareholders of an opportunity to sell
their shares at a premium over prevailing market prices by discouraging a third
party from seeking to obtain control over the Trust. Such attempts could have
the effect of increasing the expenses of the Trust and disrupting the normal
operation of the Trust. The board of trustees is divided into three classes,
with the terms of one class expiring at each annual meeting of shareholders. At
each annual meeting, one class of trustees is elected to a three-year term.
This provision could delay for up to two years the replacement of a majority of
the board of trustees. A trustee may be removed from office by the action of a
majority of the remaining trustees followed by a vote of the holders of at
least 75% of the shares then entitled to vote for the election of the
respective trustee.

         In addition, the Trust's Agreement and Declaration of Trust requires
the favorable vote of a majority of the Trust's board of trustees followed by
the favorable vote of the holders of not less than 75% of the outstanding
shares of each affected class or series of the Trust, voting separately as a
class or series, to approve, adopt or authorize certain transactions with 5% or
greater holders of the outstanding shares of all outstanding classes or series
of beneficial interest of the Trust and their associates, unless the
transaction has been approved by at least 80% of the trustees, in which case "a
majority of the outstanding voting securities" (as defined in the Investment
Company Act) of the Trust shall be required. For purposes of these provisions,
a 5% or 5% or greater holder of the outstanding shares of all outstanding
classes or series of beneficial interest of the Trust (a "Principal
Shareholder") refers to any person who, whether directly or indirectly and
whether alone or together with its affiliates and associates, beneficially owns
5% or more of the outstanding shares of all outstanding classes or series of
beneficial interest of the Trust.

         The 5% holder transactions subject to these special approval
requirements are:

o        the merger or consolidation of the Trust or any subsidiary of the
         Trust with or into any Principal Shareholder;

o        the issuance of any securities of the Trust to any Principal
         Shareholder for cash;

o        the sale, lease or exchange of all or any substantial part of the
         assets of the Trust to any Principal Shareholder, except assets having
         an aggregate fair market value of less than 2% of the total assets of
         the Trust, aggregating for the purpose of such computation all assets
         sold, leased or exchanged in any series of similar transactions within
         a twelve-month period; or

o        the sale, lease or exchange to the Trust or any subsidiary of the
         Trust, in exchange for securities of the Trust, of any assets of any
         Principal Shareholder, except assets having an aggregate fair market
         value of less than 2% of the total assets of the Trust, aggregating
         for purposes of such computation all assets sold, leased or exchanged
         in any series of similar transactions within a twelve-month period.

         To convert the Trust to an open-end investment company, the Trust's
Agreement and Declaration of Trust requires the favorable vote of a majority of
the board of the trustees followed by the favorable vote of the holders of not
less than 75% of the outstanding shares of each affected class or series of
shares of the Trust, voting separately as a class or series, unless such
amendment has been approved by at least 80% of the trustees, in which case "a
majority of the outstanding voting securities" (as defined in the Investment
Company Act) of the Trust shall be required. The foregoing vote would satisfy a
separate requirement in the Investment Company Act that any conversion of the
Trust to an open-end investment company be approved by the shareholders. If
approved in the foregoing manner, conversion of the Trust to an open-end
investment company could not occur until 90 days after the shareholders'
meeting at which such conversion was approved and would also require at least
30 days' prior notice to all shareholders. Conversion of the Trust to an
open-end investment company would require the redemption of any outstanding
Preferred Shares, which could eliminate or alter the leveraged capital
structure of the Trust with respect to the common shares. Following any such
conversion, it is also possible that certain of the Trust's investment policies
and strategies would have to be modified to assure sufficient portfolio
liquidity. In the event of conversion, the common shares would cease to be
listed on the New York Stock Exchange or other national securities exchanges or
market systems. Shareholders of an open-end investment company may require the
company to redeem their shares at any time, except in certain circumstances as
authorized by or under the Investment Company Act, at their net asset value,
less such redemption charge, if any, as might be in effect at the time of a
redemption. The Trust expects to pay all such redemption requests in cash, but
reserves the right to pay redemption requests in a combination of cash or
securities. If such partial payment in securities were made, investors may
incur brokerage costs in converting such securities to cash. If the Trust were
converted to an open-end fund, it is likely that new shares would be sold at
net asset value plus a sales load. The board of trustees believes, however,
that the closed-end structure is desirable in light of the Trust's investment
objectives and policies. Therefore, you should assume that it is not likely
that the board of trustees would vote to convert the Trust to an open-end fund.

         To liquidate the Trust, the Trust's Agreement and Declaration of
Trust, requires the favorable vote of a majority of the board of trustees
followed by the favorable vote of the holders of at least 75% of the
outstanding shares of each affected class or series of the Trust, voting
separately as a class or series, unless such amendment has been approved by at
least 80% of trustees, in which case "a majority of the outstanding voting
securities" (as defined in the Investment Company Act) of the Trust shall be
required.

         For the purposes of calculating "a majority of the outstanding voting
securities" under the Trust's Agreement and Declaration of Trust, each class
and series of the Trust shall vote together as a single class, except to the
extent required by the Investment Company Act or the Trust's Agreement and
Declaration of Trust with respect to any class or series of shares. If a
separate vote is required, the applicable proportion of shares of the class or
series, voting as a separate class or series, also will be required.

         The board of trustees has determined that provisions with respect to
the board of trustees and the shareholder voting requirements described above,
which voting requirements are greater than the minimum requirements under
Delaware law or the Investment Company Act, are in the best interest of
shareholders generally. Reference should be made to the Agreement and
Declaration of Trust on file with the Securities and Exchange Commission for
the full text of these provisions.


                           CLOSED-END TRUST STRUCTURE

         The Trust is a newly organized, diversified, closed-end management
investment company (commonly referred to as a closed-end fund). Closed-end
funds differ from open-end funds (which are generally referred to as mutual
funds) in that closed-end funds generally list their shares for trading on a
stock exchange and do not redeem their shares at the request of the
shareholder. This means that if you wish to sell your shares of a closed-end
fund you must trade them on the market like any other stock at the prevailing
market price at that time. In a mutual fund, if the shareholder wishes to sell
shares of the fund, the mutual fund will redeem or buy back the shares at "net
asset value." Also, mutual funds generally offer new shares on a continuous
basis to new investors, and closed-end funds generally do not. The continuous
inflows and outflows of assets in a mutual fund can make it difficult to manage
the fund's investments. By comparison, closed-end funds are generally able to
stay more fully invested in securities that are consistent with their
investment objectives, and also have greater flexibility to make certain types
of investments, and to use certain investment strategies, such as financial
leverage and investments in illiquid securities.

         Shares of closed-end funds frequently trade at a discount to their net
asset value. Because of this possibility and the recognition that any such
discount may not be in the interest of shareholders, the Trust's board of
trustees might consider from time to time engaging in open-market repurchases,
tender offers for shares or other programs intended to reduce the discount. We
cannot guarantee or assure, however, that the Trust's board of trustees will
decide to engage in any of these actions. Nor is there any guarantee or
assurance that such actions, if undertaken, would result in the shares trading
at a price equal or close to net asset value per share. The board of trustees
might also consider converting the Trust to an open-end mutual fund, which
would also require a vote of the shareholders of the Trust.


                              REPURCHASE OF SHARES

         Shares of closed-end investment companies often trade at a discount to
their net asset values, and the Trust's common shares may also trade at a
discount to their net asset value, although it is possible that they may trade
at a premium above net asset value. The market price of the Trust's common
shares will be determined by such factors as relative demand for and supply of
such common shares in the market, the Trust's net asset value, general market
and economic conditions and other factors beyond the control of the Trust. See
"Net Asset Value." Although the Trust's common shareholders will not have the
right to redeem their common shares, the Trust may take action to repurchase
common shares in the open market or make tender offers for its common shares.
This may have the effect of reducing any market discount from net asset value.

         There is no assurance that, if action is undertaken to repurchase or
tender for common shares, such action will result in the common shares' trading
at a price which approximates their net asset value. Although share repurchases
and tenders could have a favorable effect on the market price of the Trust's
common shares, you should be aware that the acquisition of common shares by the
Trust will decrease the total net assets of the Trust and, therefore, may have
the effect of increasing the Trust's expense ratio and decreasing the asset
coverage with respect to any Preferred Shares outstanding. Any share
repurchases or tender offers will be made in accordance with requirements of
the Securities Exchange Act of 1934, the Investment Company Act and the
principal stock exchange on which the common shares are traded.


                           FEDERAL INCOME TAX MATTERS

         The following discussion is a brief summary of certain U.S. federal
income tax considerations affecting the Trust and its shareholders. The
discussion reflects applicable tax laws of the United States as of the date of
this prospectus, which tax laws may be changed or subject to new
interpretations by the courts or the Internal Revenue Service (the "IRS")
retroactively or prospectively. No attempt is made to present a detailed
explanation of all U.S. federal, state, local and foreign tax concerns
affecting the Trust and its shareholders (including shareholders who hold large
positions in the Trust) and the discussion set forth herein does not constitute
tax advice. Investors are urged to consult their own tax advisors to determine
the tax consequences to them of investing in the Trust.

         The Trust intends to elect and to qualify for special tax treatment
afforded to a regulated investment company under subchapter M of the Code. As
long as it so qualifies, in any taxable year in which it distributes at least
90% of the sum of its (i) investment company taxable income (which includes,
among other items, dividends, interest, the excess of any net short-term
capital gains over net long-term capital losses and other taxable income other
than net capital gain (which consists of the excess of its net long-term
capital gain over its net short-term capital loss) reduced by deductible
expenses) determined without regard to the deduction for dividends paid and
(ii) its net tax-exempt interest (the excess of its gross tax-exempt interest
over certain disallowed deductions) the Trust (but not its shareholders) will
not be subject to U.S. federal income tax to the extent that it distributes its
investment company taxable income and net realized capital gains. The Trust
intends to distribute substantially all of such income.

         Dividends paid by the Trust from its ordinary income or from an excess
of net short-term capital gains over net long-term capital losses (together
referred to hereinafter as "ordinary income dividends") are taxable to
shareholders as ordinary income to the extent of the Trust's earning and
profits. Due to the Trust's expected investments, in general, distributions
will not be eligible for a dividends received deduction allowed to corporations
and will not qualify for the reduced rate on qualified dividend income allowed
to individuals. Distributions made from an excess of net long-term capital
gains over net short-term capital losses ("capital gain dividends"), including
capital gain dividends credited to a shareholder but retained by the Trust, are
taxable to shareholders as long-term capital gains, regardless of the length of
time the shareholder has owned Trust shares. The maximum tax rate on net
long-term capital gain of individuals is reduced generally from 20% to 15% (5%
for individuals in lower brackets) for such gain realized after May 6, 2003 and
before January 1, 2009. Distributions in excess of the Trust's earnings and
profits will first reduce the adjusted tax basis of a holder's shares and,
after such adjusted tax basis is reduced to zero, will constitute capital gains
to such holder (assuming the shares are held as a capital asset). Generally,
not later than 60 days after the close of its taxable year, the Trust will
provide its shareholders with a written notice designating the amount of any
qualified dividend income or capital gain dividends and other distributions.

         The sale or other disposition of common shares of the Trust will
generally result in capital gain or loss to shareholders. Any loss upon the
sale or exchange of Trust shares held for six months or less will be treated as
long-term capital loss to the extent of any capital gain dividends received
(including amounts credited as an undistributed capital gain dividend) by the
shareholder. A loss realized on a sale or exchange of shares of the Trust will
be disallowed if substantially identical shares are acquired (whether through
the automatic reinvestment of dividends or otherwise) within a 61-day period
beginning 30 days before and ending 30 days after the date that the shares are
disposed of. In such case, the basis of the shares acquired will be adjusted to
reflect the disallowed loss. Present law taxes both long-term and short-term
capital gains of corporations at the rates applicable to ordinary income. For
non-corporate taxpayers, short-term capital gains will currently be taxed at
the maximum rate of 35% applicable to ordinary income while long-term capital
gains generally will be taxed at a maximum rate of 15%.

         Dividends and other taxable distributions are taxable to shareholders
even though they are reinvested in additional shares of the Trust. If the Trust
pays a dividend in January which was declared in the previous October, November
or December to shareholders of record on a specified date in one of such
months, then such dividend will be treated for tax purposes as being paid by
the Trust and received by its shareholders on December 31 of the year in which
the dividend was declared.

         The Trust is required in certain circumstances to backup withhold on
taxable dividends and certain other payments paid to non-corporate holders of
the Trust's shares who do not furnish the Trust with their correct taxpayer
identification number (in the case of individuals, their social security
number) and certain certifications, or who are otherwise subject to backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
from payments made to a shareholder may be refunded or credited against such
shareholder's U.S. federal income tax liability, if any, provided that the
required information is furnished to the IRS.

         THE FOREGOING IS A GENERAL AND ABBREVIATED SUMMARY OF THE PROVISIONS
OF THE CODE AND THE TREASURY REGULATIONS IN EFFECT AS THEY DIRECTLY GOVERN THE
TAXATION OF THE TRUST AND ITS SHAREHOLDERS. THESE PROVISIONS ARE SUBJECT TO
CHANGE BY LEGISLATIVE OR ADMINISTRATIVE ACTION, AND ANY SUCH CHANGE MAY BE
RETROACTIVE. A MORE COMPLETE DISCUSSION OF THE TAX RULES APPLICABLE TO THE
TRUST CAN BE FOUND IN THE STATEMENT OF ADDITIONAL INFORMATION WHICH IS
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. SHAREHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS REGARDING SPECIFIC QUESTIONS AS TO US FEDERAL,
FOREIGN, STATE, LOCAL INCOME OR OTHER TAXES.


                                  UNDERWRITING

         Subject to the terms and conditions stated in the purchase agreement
dated          , 2004, each Underwriter named below, for which
        is acting as a representative, has severally agreed to purchase, and
the Trust has agreed to sell to such Underwriter the number of common shares
set forth opposite the name of such Underwriter.

                                                                   Number of
Underwriter                                                     Common Shares

Total...................................................

         The purchase agreement provides that the obligations of the
Underwriters to purchase the shares included in this offering are subject to
the approval of certain legal matters by counsel and certain other conditions.
The Underwriters are obligated to purchase all the common shares sold under the
purchase agreement if any of the common shares are purchased. In the purchase
agreement, the Trust, the Advisor and the Sub-Advisor have agreed to indemnify
the Underwriters against certain liabilities, including liabilities arising
under the Securities Act of 1933, as amended, or to contribute payments the
Underwriters may be required to make for any of those liabilities.

         The Underwriters propose to initially offer some of the common shares
directly to the public at the public offering price set forth on the cover page
of this prospectus and some of the common shares to certain dealers at the
public offering price less a concession not in excess of $     per share. The
sales load the Trust will pay of $       per share is equal to     % of the
initial offering price. The Underwriters may allow, and the dealers may
reallow, a discount in excess of $      per share on sales to other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.

         The following table shows the public offering price, sales load and
proceeds before expenses to the Trust. The information assumes either no
exercise or full exercise by the Underwriters of their overallotment option.

                                               Per Share        Without Option
Public offering price                          $ 15.00           $
Sales load                                     $                 $
Proceeds, before expenses, to the Trust        $                 $

         The Trust will pay organizational expenses and offering costs of the
Trust (other than the sales load) up to an aggregate of $     per share of the
Trust's common shares. BlackRock has agreed to pay such organizational expenses
and offering costs of the Trust to the extent they exceed $       per share of
the Trust's common shares. The organizational and offering expenses to be
incurred by the Trust are estimated to be $     (including amounts incurred by
BlackRock on behalf of the Trust).

         The Trust has granted the Underwriters an option to purchase up to
          additional common shares at the public offering price, less the sales
load, within 45 days from the date of this prospectus solely to cover any
overallotments. If the Underwriters exercise this option, each will be
obligated, subject to conditions contained in the purchase agreement, to
purchase a number of additional shares proportionate to that Underwriter's
initial amount reflected in the above table.

         If the Underwriters create a short position in shares of common stock
in connection with the offering, i.e., if they sell more shares of common stock
than are listed on the cover of this prospectus, the representatives may reduce
that short position by purchasing shares of common stock in the open market.
The representatives may also elect to reduce any short position by exercising
all or part of the overallotment option described above. The Underwriters may
also impose a penalty bid, whereby selling concessions allowed to syndicate
members or other broker-dealers in respect of shares of common stock are
repurchased by the syndicate in stabilizing or covering transactions. Purchase
of shares of common stock to stabilize the price or to reduce a short position
may cause the common stock to be higher than it might be in the absence of such
purchases.

         The Trust has agreed not to offer or sell any additional common shares
for a period of          days after the date of the purchase agreement without
the prior written consent of the Underwriters, except for the sale of the
common shares to the Underwriters pursuant to the purchase agreement.

         The Trust anticipates that the Underwriters may from time to time act
as brokers or dealers in executing the Trust's portfolio transactions after
they have ceased to be Underwriters. The Underwriters are active Underwriters
of, and dealers in, securities and therefore can be expected to engage in
portfolio transactions with the Trust.

         PNC Capital Markets, Inc. and J.J.B. Hilliard, W.L. Lyons, Inc., two
of the Underwriters, are affiliates of BlackRock.

         The principal business address of                      is
                        .


                          CUSTODIAN AND TRANSFER AGENT

         The custodian of the assets of the Trust is State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110. The Custodian
performs custodial, fund accounting and portfolio accounting services.
EquiServe Trust Company, N.A., 150 Royall Street, Canton, Massachusetts 02021
will serve as the Trust's transfer agent with respect to the common shares.


                                 LEGAL OPINIONS

         Certain legal matters in connection with the common shares will be
passed upon for the Trust by Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York, and for the Underwriters by                               .
                           may rely as to certain matters of Delaware law on
the opinion of Skadden, Arps, Slate, Meagher & Flom LLP.


                        PRIVACY PRINCIPLES OF THE TRUST

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

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

         The Trust restricts access to non-public personal information about
its shareholders to employees of the Trust's investment advisor and its
affiliates with a legitimate business need for the information. The Trust
maintains physical, electronic and procedural safeguards designed to protect
the non-public personal information of its shareholders.

<PAGE>



                           TABLE OF CONTENTS FOR THE
                      STATEMENT OF ADDITIONAL INFORMATION



                               TABLE OF CONTENTS

Use of Proceeds..............................................................2
Investment Objectives and Policies...........................................2
Investment Policies and Techniques...........................................4
Other Investment Policies and Techniques....................................15
Management of the Trust.....................................................18
Portfolio Transactions and Brokerage........................................23
Description of Shares.......................................................24
Repurchase of Common Shares.................................................25
Tax Matters.................................................................26
Experts  ...................................................................29
Additional Information......................................................29
Independent Auditors' Report.................................................1
Financial Statements ......................................................F-2
APPENDIX A General Characteristics and Risks of Strategic Transactions.....A-1
APPENDIX B Proxy Voting Procedures ........................................B-1


<PAGE>





                                     Shares

                  BlackRock Global Floating Rate Income Trust

                                 Common Shares


                                $15.00 per share


                              P R O S P E C T U S




<PAGE>




                      STATEMENT OF ADDITIONAL INFORMATION

         BlackRock Global Floating Rate Income Trust (the "Trust") is a
diversified, closed-end management investment company with no operating
history. This Statement of Additional Information relating to common shares
does not constitute a prospectus, but should be read in conjunction with the
prospectus relating thereto dated, 2004. This Statement of Additional
Information, which is not a prospectus, does not include all information that
a prospective investor should consider before purchasing common shares, and
investors should obtain and read the prospectus prior to purchasing such
shares. A copy of the prospectus may be obtained without charge by calling
(888) 825-2257. You may also obtain a copy of the prospectus on the Securities
and Exchange Commission's web site (http://www.sec.gov). Capitalized terms
used but not defined in this Statement of Additional Information have the
meanings ascribed to them in the prospectus.

                               TABLE OF CONTENTS

Use of Proceeds.............................................................2
Investment Objectives and Policies..........................................2
Investment Policies and Techniques..........................................4
Other Investment Policies and Techniques...................................15
Management of the Trust....................................................18
Portfolio Transactions and Brokerage.......................................23
Description of Shares......................................................24
Repurchase of Common Shares................................................25
Tax Matters................................................................26
Experts  ..................................................................29
Additional Information.....................................................29
Independent Auditors' Report................................................1
Financial Statements .....................................................F-2
APPENDIX A General Characteristics and Risks
  of Strategic Transactions ..............................................A-1
APPENDIX B Proxy Voting Procedures .......................................B-1

        This Statement of Additional Information is dated     , 2004.

<PAGE>

                                USE OF PROCEEDS

         Pending investment in securities that meet the Trust's investment
objectives and policies, the net proceeds of this offering will be invested in
short-term debt securities of the type described under "Investment Policies
and Techniques--Short-Term Debt Securities." We currently anticipate that the
Trust will be able to invest primarily in securities that meet the Trust's
investment objectives and policies within approximately three months after the
completion of this offering.


                      INVESTMENT OBJECTIVES AND POLICIES

         The Trust's investment objective is to provide a high level of
current income. The Trust, as a secondary objective, also seeks the
preservation of capital to the extent consistent with its primary objective of
high current income. The Trust attempts to achieve its objectives by investing
primarily in Senior Loans and Variable Debt.

Investment Restrictions

         Except as described below, the Trust, as a fundamental policy, may
not, without the approval of the holders of majority of the outstanding common
shares and any preferred shares, if any, voting together as a single class,
and of the holders of a majority of the outstanding preferred shares, if any,
voting as a separate class:

                           (1) with respect to 75% of its total assets, invest
         more than 5% of the value of its total assets in the securities of any
         single issuer or purchase more than 10% of the outstanding voting
         securities of any one issuer.

                           (2) invest 25% or more of the value of its total
         assets in any one industry, provided that securities issued or
         guaranteed by the U.S. Government and non-U.S. governments, their
         agencies or instrumentalities, and corporations will not be considered
         to represent an industry;

                           (3) issue senior securities or borrow money other
         than as permitted by the Investment Company Act or pledge its assets
         other than to secure such issuances or in connection with hedging
         transactions, short sales, when issued and forward commitment
         transactions and similar investment strategies;

                           (4) make loans of money or property to any person,
         except through loans of portfolio securities, the purchase of debt
         securities consistent with the Trust's investment objectives and
         policies or the entry into repurchase agreements;

                           (5) underwrite the securities of other issuers,
         except to the extent that, in connection with the disposition of
         portfolio securities or the sale of its own securities, the Trust may
         be deemed to be an underwriter;

                           (6) purchase or sell real estate, except that the
         Trust may invest in securities of companies that deal in real estate
         or are engaged in the real estate business, including real estate
         investment trusts ("REITs") and real estate operating companies, and
         instruments secured by real estate or interests therein and the Trust
         may acquire, hold and sell real estate acquired through default,
         liquidation, or other distributions of an interest in real estate as a
         result of the Trust's ownership of such other assets; or

                           (7) purchase or sell commodities or commodity
         contracts for any purposes except as, and to the extent, permitted by
         applicable law without the Trust becoming subject to registration with
         the Commodity Futures Trading Commission (the "CFTC") as a commodity
         pool.

         When used with respect to particular shares of the Trust, "majority
of the outstanding" means (i) 67% or more of the shares present at a meeting,
if the holders of more than 50% of the shares are present or represented by
proxy, or (ii) more than 50% of the shares, whichever is less.

         The Trust is also subject to the following non-fundamental
restrictions and policies, which may be changed by the board of trustees. The
Trust may not:

                           (1) make any short sale of securities except in
         conformity with applicable laws, rules and regulations and unless
         after giving effect to such sale, the market value of all securities
         sold short does not exceed 25% of the value of the Trust's total
         assets and the Trust's aggregate short sales of a particular class of
         securities of an issuer does not exceed 25% of the then outstanding
         securities of that class. The Trust may also make short sales "against
         the box" without respect to such limitations. In this type of short
         sale, at the time of the sale, the Trust owns or has the immediate and
         unconditional right to acquire at no additional cost the identical
         security;

                           (2) purchase securities of open-end or closed-end
         investment companies except in compliance with the Investment Company
         Act or any exemptive relief obtained thereunder. Under the Investment
         Company Act, the Trust may invest up to 10% of its total assets in the
         aggregate in shares of other investment companies and up to 5% of its
         total assets in any one investment company, provided the investment
         does not represent more than 3% of the voting stock of the acquired
         investment company at the time such shares are purchased. As a
         shareholder in any investment company, the Trust will bear its ratable
         share of that investment company's expenses, and will remain subject
         to payment of the Trust's advisory fees and other expenses with
         respect to assets so invested. Holders of common shares will therefore
         be subject to duplicative expenses to the extent the Trust invests in
         other investment companies. In addition, the securities of other
         investment companies may also be leveraged and will therefore be
         subject to the same leverage risks described herein and in the
         prospectus. As described in the prospectus in the section entitled
         "Risks," the net asset value and market value of leveraged shares will
         be more volatile and the yield to shareholders will tend to fluctuate
         more than the yield generated by unleveraged shares; or

                           (3) under normal market conditions, invest less than
         80% of its total assets in securities that are not inflation-indexed
         securities and/or a variable or floating rate feature such as Senior
         Loans and Variable Debt. The Trust will provide shareholders with
         notice at least 60 days prior to changing this non-fundamental policy
         of the Trust unless such change was previously approved by
         shareholders.

         In addition, to comply with federal tax requirements for
qualification as a regulated investment company, the Trust's investments will
be limited in a manner such that at the close of each quarter of each taxable
year, (a) no more than 25% of the value of the Trust's total assets are
invested in the securities (other than U.S. Government securities or
securities of other regulated investment companies) of a single issuer or two
or more issuers controlled by the Trust and engaged in the same, similar or
related trades or businesses and (b) with regard to at least 50% of the
Trust's total assets, no more than 5% of its total assets are invested in the
securities (other than U.S. Government securities or securities of other
regulated investment companies) of a single issuer and no investment
represents more than 10% of the outstanding voting securities of such issuer.
These tax-related limitations may be changed by the trustees to the extent
appropriate in light of changes to applicable tax requirements.

         The percentage limitations applicable to the Trust's portfolio
described in this prospectus apply only at the time of investment and the
Trust will not be required to sell securities due to subsequent changes in the
value of securities it owns.


                      INVESTMENT POLICIES AND TECHNIQUES

         The following information supplements the discussion of the Trust's
investment objectives, policies and techniques that are described in the
prospectus.

Short-Term Debt Securities

         For temporary defensive proposes or to keep cash on hand, the Trust
may invest up to 100% of its Managed Assets in cash equivalents and short-term
debt securities. Short-term debt investments are defined to include, without
limitation, the following:

                           (1) U.S. Government securities, including bills,
         notes and bonds differing as to maturity and rates of interest that
         are either issued or guaranteed by the U.S. Treasury or by U.S.
         Government agencies or instrumentalities. U.S. Government securities
         include securities issued by (a) the Federal Housing Administration,
         Farmers Home Administration, Export-Import Bank of the United States,
         Small Business Administration, and GNMA, whose securities are
         supported by the full faith and credit of the United States; (b) the
         Federal Home Loan Banks, Federal Intermediate Credit Banks, and
         Tennessee Valley Authority, whose securities are supported by the
         right of the agency to borrow from the U.S. Treasury; (c) the FNMA,
         whose securities are supported by the discretionary authority of the
         U.S. Government to purchase certain obligations of the agency or
         instrumentality; and (d) the Student Loan Marketing Association, whose
         securities are supported only by its credit. While the U.S. Government
         provides financial support to such U.S. Government-sponsored agencies
         or instrumentalities, no assurance can be given that it always will do
         so since it is not so obligated by law. The U.S. Government, its
         agencies and instrumentalities do not guarantee the market value of
         their securities. Consequently, the value of such securities may
         fluctuate.

                           (2) Certificates of deposit issued against funds
         deposited in a bank or a savings and loan association. Such
         certificates are for a definite period of time, earn a specified rate
         of return, and are normally negotiable. The issuer of a certificate of
         deposit agrees to pay the amount deposited plus interest to the bearer
         of the certificate on the date specified thereon. Certificates of
         deposit purchased by the Trust may not be fully insured by the Federal
         Deposit Insurance Corporation.

                           (3) Repurchase agreements, which involve purchases
         of debt securities. At the time the Trust purchases securities
         pursuant to a repurchase agreement, it simultaneously agrees to resell
         and redeliver such securities to the seller, who also simultaneously
         agrees to buy back the securities at a fixed price and time. This
         assures a predetermined yield for the Trust during its holding period,
         since the resale price is always greater than the purchase price and
         reflects an agreed-upon market rate. Such actions afford an
         opportunity for the Trust to invest temporarily available cash. The
         Trust may enter into repurchase agreements only with respect to
         obligations of the U.S. Government, its agencies or instrumentalities;
         certificates of deposit; or bankers' acceptances in which the Trust
         may invest. Repurchase agreements may be considered loans to the
         seller, collateralized by the underlying securities. The risk to the
         Trust is limited to the ability of the seller to pay the agreed-upon
         sum on the repurchase date; in the event of default, the repurchase
         agreement provides that the Trust is entitled to sell the underlying
         collateral. If the value of the collateral declines after the
         agreement is entered into, and if the seller defaults under a
         repurchase agreement when the value of the underlying collateral is
         less than the repurchase price, the Trust could incur a loss of both
         principal and interest. BlackRock monitors the value of the collateral
         at the time the action is entered into and at all times during the
         term of the repurchase agreement. BlackRock does so in an effort to
         determine that the value of the collateral always equals or exceeds
         the agreed-upon repurchase price to be paid to the Trust. If the
         seller were to be subject to a federal bankruptcy proceeding, the
         ability of the Trust to liquidate the collateral could be delayed or
         impaired because of certain provisions of the bankruptcy laws.

                           (4) Commercial paper, which consists of short-term
         unsecured promissory notes, including variable rate master demand
         notes issued by corporations to finance their current operations.
         Master demand notes are direct lending arrangements between the Trust
         and a corporation. There is no secondary market for such notes.
         However, they are redeemable by the Trust at any time. BlackRock will
         consider the financial condition of the corporation (e.g., earning
         power, cash flow and other liquidity ratios) and will continuously
         monitor the corporation's ability to meet all of its financial
         obligations, because the Trust's liquidity might be impaired if the
         corporation were unable to pay principal and interest on demand.
         Investments in commercial paper will be limited to commercial paper
         rated in the highest categories by a major rating agency and which
         mature within one year of the date of purchase or carry a variable or
         floating rate of interest.

Non-Investment Grade Securities

         The Trust may invest in securities rated below investment grade such
as those rated Ba or below by Moody's or BB or below by S&P or Fitch or
securities comparably rated by other rating agencies or in unrated securities
determined by BlackRock to be of comparable quality. Securities rated Ba and
below by Moody's and Fitch are judged to have speculative elements; their
future cannot be considered as well assured and often the protection of
interest and principle payments may be very moderate. Securities rated BB by
S&P 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.

         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 of higher rated securities; adverse conditions could
make it difficult at times for the Trust to sell certain securities or could
result in lower prices than those used in calculating the Trust's net asset
value.

         The prices of debt securities generally are inversely related to
interest rate changes; however, the price volatility caused by fluctuating
interest rates of securities also is inversely related to the coupons of such
securities. Accordingly, below investment grade securities may be relatively
less sensitive to interest rate changes than higher quality securities of
comparable maturity because of their higher coupon. This higher coupon is what
the investor receives in return for bearing greater credit risk. The higher
credit risk associated with below investment grade securities potentially can
have a greater effect on the value of such securities than may be the case
with higher quality issues of comparable maturity.

         Lower grade securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could severely disrupt the
market for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principle and pay interest thereon and increase the incidence of default for
such securities.

         The ratings of Moody's, S&P and other rating agencies represent their
opinions as to the quality of the obligations which they undertake to rate.
Ratings are relative and subjective and, although ratings may be useful in
evaluating the safety of interest and principle payments, they do not evaluate
the market value risk of such obligations. Although these ratings may be an
initial criterion for selection of portfolio investments, BlackRock also will
independently evaluate these securities and the ability for the issuers of
such securities to pay interest and principal. To the extent that the Trust
invests in lower grade securities that have not been rated by a rating agency,
the Trust's ability to achieve its investment objectives will be more
dependent on BlackRock's credit analysis than would be the case when the Trust
invests in rated securities.

Mortgage-Related and Asset-Backed Securities

         Mortgage-Related Securities are a form of derivative collateralized
by pools of commercial or residential mortgages. Pools of mortgage loans are
assembled as securities for sale to investors by various governmental,
government-related and private organizations. These securities may include
complex instruments such as collateralized mortgage obligations, stripped
mortgage-backed securities, mortgage pass-through securities, interests in
real estate mortgage investment conduits ("REMICs"), real estate investment
trusts ("REITs"), including debt and preferred stock issued by REITs, as well
as other real estate-related securities. The Mortgage-Related Securities in
which the Trust may invest include those with fixed, floating or variable
interest rates, those with interest rates that change based on multiples of
changes in a specified index of interest rates and those with interest rates
that change inversely to changes in interest rates, as well as those that do
not bear interest. Although the Trust may invest in residential and commercial
Mortgage-Related Securities issued by governmental entities and private
issuers, the Trust expects that most of such investments will be limited to
Commercial Mortgage-Related Securities ("CMBS"), in which the Trust will not
invest more than 15% of its Managed Assets.

         Commercial Mortgage-Related Securities. CMBS generally are
multi-class debt or pass-through certificates secured or backed by mortgage
loans on commercial properties. CMBS generally are structured to provide
protection to the senior class investors against potential losses on the
underlying mortgage loans. This protection generally is provided by having the
holders of subordinated classes of securities ("Subordinated CMBS") take the
first loss if there are defaults on the underlying commercial mortgage loans.
Other protection, which may benefit all of the classes or particular classes,
may include issuer guarantees, reserve funds, additional Subordinated CMBS,
cross-collateralization and over-collateralization.

         The Trust may invest in Subordinated CMBS issued or sponsored by
commercial banks, savings and loan institutions, mortgage bankers, private
mortgage insurance companies and other non-governmental issuers. Subordinated
CMBS have no governmental guarantee, and are subordinated in some manner as to
the payment of principal and/or interest to the holders of more senior
Mortgage-Related Securities arising out of the same pool of mortgages. The
holders of Subordinated CMBS typically are compensated with a higher stated
yield than are the holders of more senior Mortgage-Related Securities. On the
other hand, Subordinated CMBS typically subject the holder to greater risk
than senior CMBS and tend to be rated in a lower rating category, and
frequently a substantially lower rating category, than the senior CMBS issued
in respect of the same mortgage pool. Subordinated CMBS generally are likely
to be more sensitive to changes in prepayment and interest rates and the
market for such securities may be less liquid than is the case for traditional
fixed-income securities and senior Mortgage-Related Securities.

         The market for CMBS developed more recently and in terms of total
outstanding principal amount of issues is relatively small compared to the
market for residential single-family Mortgage-Related Securities. In addition,
commercial lending generally is viewed as exposing the lender to a greater
risk of loss than one-to-four family residential lending. Commercial lending,
for example, typically involves larger loans to single borrowers or groups of
related borrowers than residential one-to-four family mortgage loans. In
addition, the repayment of loans secured by income producing properties
typically is dependent upon the successful operation of the related real
estate project and the cash flow generated therefrom. Consequently, adverse
changes in economic conditions and circumstances are more likely to have an
adverse impact on Mortgage-Related Securities secured by loans on commercial
properties than on those secured by loans on residential properties.

         Asset-Backed Securities. Asset-Backed Securities are a form of
derivative securities. The securitization techniques used for Asset-Backed
Securities are similar to those used for Mortgage-Related Securities. The
collateral for these securities may include home equity loans, automobile and
credit card receivables, boat loans, computer leases, airplane leases, mobile
home loans, recreational vehicle loans and hospital account receivables. The
Trust may invest in these and other types of Asset-Backed Securities that may
be developed in the future. Asset-Backed Securities present certain risks that
are not presented by Mortgage-Related Securities. Primarily, these securities
may provide the Trust with a less effective security interest in the related
collateral than do Mortgage-Related Securities. Therefore, there is the
possibility that recoveries on the underlying collateral may not, in some
cases, be available to support payments on these securities.

         Government Agency Securities. Mortgage-Related Securities issued by
the Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed
as to the timely payment of principal and interest by GNMA and such guarantee
is backed by the full faith and credit of the United States. GNMA is a
wholly-owned U.S. Government corporation within the Department of Housing and
Urban Development. GNMA certificates also are supported by the authority of
GNMA to borrow funds from the U.S. Treasury to make payments under its
guarantee.

         Government-Related Securities. Mortgage-Related Securities issued by
the Federal National Mortgage Association ("FNMA") include FNMA Guaranteed
Mortgage Pass-Through Certificates (also known as "Fannie Maes") which are
solely the obligations of FNMA and are not backed by or entitled to the full
faith and credit of the United States. FNMA is a government-sponsored
organization owned entirely by private shareholders. Fannie Maes are
guaranteed as to timely payment of principal and interest by FNMA.
Mortgage-Related Securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates (also
known as "Freddie Macs" or "PCs"). FHLMC is a corporate instrumentality of the
United States created pursuant to an Act of Congress, which is owned entirely
by Federal Home Loan Banks. Freddie Macs are not guaranteed by the United
States or by any Federal Home Loan Bank and do not constitute a debt or
obligation of the United States or of any Federal Home Loan Bank. Freddie Macs
entitle the holder to timely payment of interest, which is guaranteed by
FHLMC. FHLMC guarantees either ultimate collection or timely payment of all
principal payments on the underlying mortgage loans. When FHLMC does not
guarantee timely payment of principal, FHLMC may remit the amount due on
account of its guarantee of ultimate payment of principal at any time after
default on an underlying mortgage, but in no event later than one year after
it becomes payable.

         Private Entity Securities. These Mortgage-Related Securities are
issued by commercial banks, savings and loan institutions, mortgage bankers,
private mortgage insurance companies and other non-governmental issuers.
Timely payment of principal and interest on Mortgage-Related Securities backed
by pools created by non-governmental issuers often is supported partially by
various forms of insurance or guarantees, including individual loan, title,
pool and hazard insurance. The insurance and guarantees are issued by
government entities, private insurers and the mortgage poolers. There can be
no assurance that the private insurers or mortgage poolers can meet their
obligations under the policies, so that if the issuers default on their
obligations the holders of the security could sustain a loss. No insurance or
guarantee covers the Trust or the price of the Trust's shares.
Mortgage-Related Securities issued by non-governmental issuers generally offer
a higher rate of interest than government-agency and government-related
securities because there are no direct or indirect government guarantees of
payment.

         Collateralized Mortgage Obligations ("CMOS"). A CMO is a multi-class
bond backed by a pool of mortgage pass-through certificates or mortgage loans.
CMOs may be collateralized by (a) Ginnie Mae, Fannie Mae, or Freddie Mac
pass-through certificates, (b) unsecuritized mortgage loans insured by the
Federal Housing Administration or guaranteed by the Department of Veterans'
Affairs, (c) unsecuritized conventional mortgages, (d) other mortgage-related
securities, or (e) any combination thereof. Each class of CMOs, often referred
to as a "tranche," is issued at a specific coupon rate and has a stated
maturity or final distribution date. Principal prepayments on collateral
underlying a CMO may cause it to be retired substantially earlier than the
stated maturities or final distribution dates. The principal and interest on
the underlying mortgages may be allocated among the several classes of a
series of a CMO in many ways. One or more tranches of a CMO may have coupon
rates which reset periodically at a specified increment over an index, such as
the London Interbank Offered Rate ("LIBOR") (or sometimes more than one
index). These floating rate CMOs typically are issued with lifetime caps on
the coupon rate thereon. The Trust also may invest in inverse floating rate
CMOs. Inverse floating rate CMOs constitute a tranche of a CMO with a coupon
rate that moves in the reverse direction to an applicable index such as LIBOR.
Accordingly, the coupon rate thereon will increase as interest rates decrease.
Inverse floating rate CMOs are typically more volatile than fixed or floating
rate tranches of CMOs. Many inverse floating rate CMOs have coupons that move
inversely to a multiple of the applicable indexes. The effect of the coupon
varying inversely to a multiple of an applicable index creates a leverage
factor. Inverse floaters based on multiples of a stated index are designed to
be highly sensitive to changes in interest rates and can subject the holders
thereof to extreme reductions of yield and loss of principal. The markets for
inverse floating rate CMOs with highly leveraged characteristics at times may
be very thin. The Trust's ability to dispose of its positions in such
securities will depend on the degree of liquidity in the markets for such
securities. It is impossible to predict the amount of trading interest that
may exist in such securities, and therefore the future degree of liquidity.

         Stripped Mortgage-Backed Securities. The Trust also may invest in
Stripped Mortgage-Backed Securities. Stripped Mortgage-Backed Securities are
created by segregating the cash flows from underlying mortgage loans or
mortgage securities to create two or more new securities, each with a
specified percentage of the underlying security's principal or interest
payments. Mortgage securities may be partially stripped so that each investor
class receives some interest and some principal. When securities are
completely stripped, however, all of the interest is distributed to holders of
one type of security, known as an interest-only security, or IO, and all of
the principal is distributed to holders of another type of security known as a
principal-only security, or PO. Strips can be created in a pass-through
structure or as tranches of a CMO. The yields to maturity on IOs and POs are
very sensitive to the rate of principal payments (including prepayments) on
the related underlying mortgage assets. If the underlying mortgage assets
experience greater than anticipated prepayments of principal, the Trust may
not fully recoup its initial investment in IOs. Conversely, if the underlying
mortgage assets experience less than anticipated prepayments of principal, the
yield on POs could be materially and adversely affected.

         Real Estate Investment Trusts. A REIT is a corporation, or a business
trust that would otherwise be taxed as a corporation, which meets the
definitional requirements of the Code. The Code permits a qualifying REIT to
deduct dividends paid, thereby effectively eliminating corporate level federal
income tax and making the REIT a pass-through vehicle for federal income tax
purposes. To meet the definitional requirements of the Code, a REIT must,
among other things, invest substantially all of its assets in interests in
real estate (including mortgages and other REITs) or cash and government
securities, derive most of its income from rents from real property or
interest on loans secured by mortgages on real property, and distribute to
shareholders annually a substantial portion of its otherwise taxable income.
REITs are characterized as equity REITs, mortgage REITs and hybrid REITs.
Equity REITs, which may include operating or finance companies, own real
estate directly and the value of, and income earned by, the REITs depends upon
the income of the underlying properties and the rental income they earn.
Equity REITs also can realize capital gains (or losses) by selling properties
that have appreciated (or depreciated) in value. Mortgage REITs can make
construction, development or long term mortgage loans and are sensitive to the
credit quality of the borrower. Mortgage REITs derive their income from
interest payments on such loans. Hybrid REITs combine the characteristics of
both equity and mortgage REITs, generally by holding both ownership interests
and mortgage interests in real estate. The value of securities issued by REITs
are affected by tax and regulatory requirements and by perceptions of
management skill. They also are subject to heavy cash flow dependency,
defaults by borrowers or tenants, self- liquidation and the possibility of
failing to qualify for REIT status under the Code or to maintain exemption
from the Investment Company Act.

         Other Mortgage-Related Securities. Other mortgage-related securities
include securities other than those described above that directly or
indirectly represent a participation in, or are secured by and payable from,
mortgage loans on real property, including CMO residuals. Other
mortgage-related securities may be equity or debt securities issued by
agencies or instrumentalities of the U.S. Government or by private originators
of, or investors in, mortgage loans, including savings and loan associations,
homebuilders, mortgage banks, commercial banks, investment banks,
partnerships, trusts and special purpose entities of the foregoing.

Senior Loans

         A Senior Loan is typically originated, negotiated and structured by a
U.S. or foreign commercial bank, insurance company, finance company or other
financial institution (the "Agent") for a group of loan investors ("Loan
Investors"). The Agent typically administers and enforces the Senior Loan on
behalf of the other Loan Investors in the syndicate. In addition, an
institution, typically but not always the Agent, holds any collateral on
behalf of the Loan Investors.

         Senior Loans primarily include senior floating rate loans to
corporations and secondarily institutionally traded senior floating rate debt
obligations issued by an asset-backed pool, and interests therein. Loan
interests primarily take the form of assignments purchased in the primary or
secondary market. Loan interests may also take the form of participation
interests in a Senior Loan. Such loan interests may be acquired from U.S. or
foreign commercial banks, insurance companies, finance companies or other
financial institutions who have made loans or are Loan Investors or from other
investors in loan interests.

         The Trust may purchase "Assignments" from the Agent or other Loan
Investors. The purchaser of an Assignment typically succeeds to all the rights
and obligations under the Loan Agreement (as defined herein) of the assigning
Loan Investor and becomes a Loan Investor under the Loan Agreement with the
same rights and obligations as the assigning Loan Investor. Assignments may,
however, be arranged through private negotiations between potential assignees
and potential assignors, and the rights and obligations acquired by the
purchaser of an Assignment may differ from, and be more limited than, those
held by the assigning Loan Investor.

         The Trust also may invest in "Participations." Participations by the
Trust in a Loan Investor's portion of a Senior Loan typically will result in
the Trust having a contractual relationship only with such Loan Investor, not
with the Borrower. As a result, the Trust may have the right to receive
payments of principal, interest and any fees to which it is entitled only from
the Loan Investor selling the Participation and only upon receipt by such Loan
Investor of such payments from the Borrower. In connection with purchasing
Participations, the Trust generally will have no right to enforce compliance
by the Borrower with the terms of the loan agreement, nor any rights with
respect to any funds acquired by other Loan Investors through set-off against
the Borrower and the Trust may not directly benefit from the collateral
supporting the Senior Loan in which it has purchased the Participation. As a
result, the Trust may assume the credit risk of both the Borrower and the Loan
Investor selling the Participation. In the event of the insolvency of the Loan
Investor selling a Participation, the Trust may be treated as a general
creditor of such Loan Investor. The selling Loan Investors and other persons
interpositioned between such Loan Investors and the Trust with respect to such
Participations will likely conduct their principal business activities in the
banking, finance and financial services industries. Persons engaged in such
industries may be more susceptible to, among other things, fluctuations in
interest rates, changes in the Federal Open Market Committee's monetary
policy, governmental regulations concerning such industries and concerning
capital raising activities generally and fluctuations in the financial markets
generally.

         The Trust will only acquire Participations if the Loan Investor
selling the Participation, and any other persons interpositioned between the
Trust and the Loan Investor, at the time of investment has outstanding debt or
deposit obligations rated investment grade (BBB or A-3 or higher by S&P or Baa
or P-3 or higher by Moody's or comparably rated by another nationally
recognized rating agency) or determined by BlackRock to be of comparable
quality. The effect of industry characteristics and market compositions may be
more pronounced. Indebtedness of companies whose creditworthiness is poor
involves substantially greater risks, and may be highly speculative. Some
companies may never pay off their indebtedness, or may pay only a small
fraction of the amount owed. Consequently, when investing in indebtedness of
companies with poor credit, the Trust bears a substantial risk of losing the
entire amount invested.

         In order to borrow money pursuant to a Senior Loan, a Borrower will
frequently, for the term of the Senior Loan, pledge collateral, including but
not limited to, (i) working capital assets, such as accounts receivable and
inventory; (ii) tangible fixed assets, such as real property, buildings and
equipment; (iii) intangible assets, such as trademarks and patent rights (but
excluding goodwill); and (iv) security interests in shares of stock of
subsidiaries or affiliates. In the case of Senior Loans made to non-public
companies, the company's shareholders or owners may provide collateral in the
form of secured guarantees and/or security interests in assets that they own.
In many instances, a Senior Loan may be secured only by stock in the Borrower
or its subsidiaries. Collateral may consist of assets that may not be readily
liquidated, and there is no assurance that the liquidation of such assets
would satisfy fully a Borrower's obligations under a Senior Loan.

         In the process of buying, selling and holding Senior Loans, the Trust
may receive and/or pay certain fees. These fees are in addition to interest
payments received and may include facility fees, commitment fees, amendment
fees, commissions and prepayment penalty fees. When the Trust buys a Senior
Loan it may receive a facility fee and when it sells a Senior Loan it may pay
a facility fee. On an ongoing basis, the Trust may receive a commitment fee
based on the undrawn portion of the underlying line of credit portion of a
Senior Loan. In certain circumstances, the Trust may receive a prepayment
penalty fee upon the prepayment of a Senior Loan by a Borrower. Other fees
received by the Trust may include covenant waiver fees and covenant
modification fees.

         A Borrower must comply with various restrictive covenants contained
in a loan agreement or note purchase agreement between the Borrower and the
holders of the Senior Loan (the "Loan Agreement"). Such covenants, in addition
to requiring the scheduled payment of interest and principal, may include
restrictions on dividend payments and other distributions to stockholders,
provisions requiring the Borrower to maintain specific minimum financial
ratios, and limits on total debt. In addition, the Loan Agreement may contain
a covenant requiring the Borrower to prepay the Loan with any free cash flow.
Free cash flow is generally defined as net cash flow after scheduled debt
service payments and permitted capital expenditures, and includes the proceeds
from asset dispositions or sales of securities. A breach of a covenant which
is not waived by the Agent, or by the Loan Investors directly, as the case may
be, is normally an event of acceleration; i.e., the Agent, or the Loan
Investors directly, as the case may be, has the right to call the outstanding
Senior Loan. The typical practice of an Agent or a Loan Investor in relying
exclusively or primarily on reports from the Borrower to monitor the
Borrower's compliance with covenants may involve a risk of fraud by the
Borrower. In the case of a Senior Loan in the form of a Participation, the
agreement between the buyer and seller may limit the rights of the holder to
vote on certain changes which may be made to the Loan Agreement, such as
waiving a breach of a covenant. However, the holder of the Participation will,
in almost all cases, have the right to vote on certain fundamental issues such
as changes in principal amount, payment dates and interest rate.

         In a typical Senior Loan the Agent administers the terms of the Loan
Agreement. In such cases, the Agent is normally responsible for the collection
of principal and interest payments from the Borrower and the apportionment of
these payments to the credit of all institutions which are parties to the Loan
Agreement. The Trust will generally rely upon the Agent or an intermediate
participant to receive and forward to the Trust its portion of the principal
and interest payments on the Senior Loan. Furthermore, unless under the terms
of a Participation Agreement the Trust has direct recourse against the
Borrower, the Trust will rely on the Agent and the other Loan Investors to use
appropriate credit remedies against the Borrower. The Agent is typically
responsible for monitoring compliance with covenants contained in the Loan
Agreement based upon reports prepared by the Borrower. The seller of the
Senior Loan usually does, but is often not obligated to, notify holders of
Senior Loans of any failures of compliance. The Agent may monitor the value of
the collateral and, if the value of the collateral declines, may accelerate
the Senior Loan, may give the Borrower an opportunity to provide additional
collateral or may seek other protection for the benefit of the participants in
the Senior Loan. The Agent is compensated by the Borrower for providing these
services under a Loan Agreement, and such compensation may include special
fees paid upon structuring and funding the Senior Loan and other fees paid on
a continuing basis. With respect to Senior Loans for which the Agent does not
perform such administrative and enforcement functions, the Trust will perform
such tasks on its own behalf, although a collateral bank will typically hold
any collateral on behalf of the Trust and the other Loan Investors pursuant to
the applicable Loan Agreement.

         A financial institution's appointment as Agent may usually be
terminated in the event that it fails to observe the requisite standard of
care or becomes insolvent, enters Federal Deposit Insurance Corporation
("FDIC") receivership, or, if not FDIC insured, enters into bankruptcy
proceedings. A successor Agent would generally be appointed to replace the
terminated Agent, and assets held by the Agent under the Loan Agreement should
remain available to holders of Senior Loans. However, if assets held by the
Agent for the benefit of the Trust were determined to be subject to the claims
of the Agent's general creditors, the Trust might incur certain costs and
delays in realizing payment on a Senior Loan, or suffer a loss of principal
and/or interest. In situations involving intermediate participants similar
risks may arise.

         Senior Loans will usually require, in addition to scheduled payments
of interest and principal, the prepayment of the Senior Loan from free cash
flow, as defined above. The degree to which Borrowers prepay Senior Loans,
whether as a contractual requirement or at their election, may be affected by
general business conditions, the financial condition of the Borrower and
competitive conditions among Loan Investors, among others. As such,
prepayments cannot be predicted with accuracy. Upon a prepayment, either in
part or in full, the actual outstanding debt on which the Trust derives
interest income will be reduced. However, the Trust may receive both a
prepayment penalty fee from the prepaying Borrower and a facility fee upon the
purchase of a new Senior Loan with the proceeds from the prepayment of the
former. Prepayments generally will not materially affect the Trust's
performance because the Trust typically is able to reinvest prepayments in
other Senior Loans that have similar yields and because receipt of such fees
may mitigate any adverse impact on the Trust's yield.

         From time to time BlackRock and its affiliates may borrow money from
various banks in connection with their business activities. Such banks may
also sell interests in Senior Loans to or acquire them from the Trust or may
be intermediate participants with respect to Senior Loans in which the Trust
owns interests. Such banks may also act as Agents for Senior Loans held by the
Trust.

         The Trust may acquire interests in Senior Loans which are designed to
provide temporary or "bridge" financing to a Borrower pending the sale of
identified assets or the arrangement of longer-term loans or the issuance and
sale of debt obligations. The Trust may also invest in Senior Loans of
Borrowers that have obtained bridge loans from other parties. A Borrower's use
of bridge loans involves a risk that the Borrower may be unable to locate
permanent financing to replace the bridge loan, which may impair the
Borrower's perceived creditworthiness.

         The Trust will be subject to the risk that collateral securing a loan
will decline in value or have no value. Such a decline, whether as a result of
bankruptcy proceedings or otherwise, could cause the Senior Loan to be
undercollateralized or unsecured. In most credit agreements there is no formal
requirement to pledge additional collateral. In addition, the Trust may invest
in Senior Loans guaranteed by, or secured by assets of, shareholders or
owners, even if the Senior Loans are not otherwise collateralized by assets of
the Borrower; provided, however, that such guarantees are fully secured. There
may be temporary periods when the principal asset held by a Borrower is the
stock of a related company, which may not legally be pledged to secure a
Senior Loan. On occasions when such stock cannot be pledged, the Senior Loan
will be temporarily unsecured until the stock can be pledged or is exchanged
for or replaced by other assets, which will be pledged as security for the
Senior Loan. However, the Borrower's ability to dispose of such securities,
other than in connection with such pledge or replacement, will be strictly
limited for the protection of the holders of Senior Loans and, indirectly,
Senior Loans themselves.

         If a Borrower becomes involved in bankruptcy proceedings, a court may
invalidate the Trust's security interest in the loan collateral or subordinate
the Trust's rights under the Senior Loan to the interests of the Borrower's
unsecured creditors or cause interest previously paid to be refunded to the
Borrower. If a court required interest to be refunded, it could negatively
affect the Trust's performance. Such action by a court could be based, for
example, on a "fraudulent conveyance" claim to the effect that the Borrower
did not receive fair consideration for granting the security interest in the
loan collateral to the Trust. For Senior Loans made in connection with a
highly leveraged transaction, consideration for granting a security interest
may be deemed inadequate if the proceeds of the Loan were not received or
retained by the Borrower, but were instead paid to other persons (such as
shareholders of the Borrower) in an amount which left the Borrower insolvent
or without sufficient working capital. There are also other events, such as
the failure to perfect a security interest due to faulty documentation or
faulty official filings, which could lead to the invalidation of the Trust's
security interest in loan collateral. If the Trust's security interest in loan
collateral is invalidated or the Senior Loan is subordinated to other debt of
a Borrower in bankruptcy or other proceedings, the Trust would have
substantially lower recovery, and perhaps no recovery on the full amount of
the principal and interest due on the Loan.

         The Trust may acquire warrants and other equity securities as part of
a unit combining a Senior Loan and equity securities of a Borrower or its
affiliates. The acquisition of such equity securities will only be incidental
to the Trust's purchase of a Senior Loan. The Trust may also acquire equity
securities or debt securities (including non-dollar denominated debt
securities) issued in exchange for a Senior Loan or issued in connection with
the debt restructuring or reorganization of a Borrower, or if such
acquisition, in the judgment of BlackRock, may enhance the value of a Senior
Loan or would otherwise be consistent with the Trust's investment policies.

Duration and Risk Management

         Consistent with its investment objectives and policies set forth
herein, the Trust may also enter into certain duration and risk management
transactions. In particular, the Trust may purchase and sell futures
contracts, exchange listed and over-the-counter put and call options on
securities, equity and other indices and futures contracts, forward foreign
currency contracts, and may enter into various interest rate transactions
(collectively, "Strategic Transactions"). Strategic Transactions may be used
to attempt to protect against possible changes in the market value of the
Trust's portfolio resulting from fluctuations in the securities markets and
changes in interest rates, to protect the Trust's unrealized gains in the
value of its portfolio securities, to facilitate the sale of such securities
for investment purposes and to establish a position in the securities markets
as a temporary substitute for purchasing particular securities. Any or all of
these Strategic Transactions may be used at any time. There is no particular
strategy that requires use of one technique rather than another. Use of any
Strategic Transaction is a function of market conditions. The ability of the
Trust to use them successfully will depend on BlackRock's ability to predict
pertinent market movements as well as sufficient correlation among the
instruments, which cannot be assured. The Strategic Transactions that the
Trust may use are described below. Although the Trust recognizes it is not
likely that it will use certain of these strategies in light of its investment
policies, it nevertheless describes them here because the Trust may seek to
use these strategies in certain circumstances.

         Futures Contracts and Options on Futures Contracts. In connection
with its duration and other risk management strategies, the Trust may also
enter into contracts for the purchase or sale for future delivery ("futures
contracts") of securities, aggregates of securities or indices or prices
thereof, other financial indices and U.S. government debt securities or
options on the above. The Trust will engage in such transactions only for bona
fide duration, risk management and other portfolio management purposes.

         Forward Foreign Currency Contracts. The Trust may enter into forward
currency contracts to purchase or sell foreign currencies for a fixed amount
of U.S. dollars or another foreign currency. A forward currency contract
involves an obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days (term) from the date of the
forward currency contract agreed upon by the parties, at a price set at the
time the forward currency contract is entered into. Forward currency contracts
are traded directly between currency traders (usually large commercial banks)
and their customers. The Trust may purchase a forward currency contract to
lock in the U.S. dollar price of a security denominated in a foreign currency
that the Trust intends to acquire. The Trust may sell a forward currency
contract to lock in the U.S. dollar equivalent of the proceeds from the
anticipated sale of a security or a dividend or interest payment denominated
in a foreign currency. The Trust may also use forward currency contracts to
shift the Trust's exposure to foreign currency exchange rate changes from one
currency to another. For example, if the Trust owns securities denominated in
a foreign currency and BlackRock believes that currency will decline relative
to another currency, the Trust might enter into a forward currency contract to
sell the appropriate amount of the first foreign currency with payment to be
made in the second currency. The Trust may also purchase forward currency
contracts to enhance income when BlackRock anticipates that the foreign
currency will appreciate in value but securities denominated in that currency
do not present attractive investment opportunities. The Trust may also use
forward currency contracts to hedge against a decline in the value of existing
investments denominated in a foreign currency. Such a hedge would tend to
offset both positive and negative currency fluctuations, but would not offset
changes in security values caused by other factors. The Trust could also hedge
the position by entering into a forward currency contract to sell another
currency expected to perform similarly to the currency in which the Trust's
existing investments are denominated. This type of hedge could offer
advantages in terms of cost, yield or efficiency, but may not hedge currency
exposure as effectively as a simple hedge into U.S. dollars. This type of
hedge may result in losses if the currency used to hedge does not perform
similarly to the currency in which the hedged securities are denominated. The
Trust may also use forward currency contracts in one currency or a basket of
currencies to attempt to hedge against fluctuations in the value of securities
denominated in a different currency if BlackRock anticipates that there will
be a correlation between the two currencies. The cost to the Trust of engaging
in forward currency contracts varies with factors such as the currency
involved, the length of the contract period and the market conditions then
prevailing. Because forward currency contracts are usually entered into on a
principal basis, no fees or commissions are involved. When the Trust enters
into a forward currency contract, it relies on the counterparty to make or
take delivery of the underlying currency at the maturity of the contract.
Failure by the counterparty to do so would result in the loss of some or all
of any expected benefit of the transaction. Secondary markets generally do not
exist for forward currency contracts, with the result that closing
transactions generally can be made for forward currency contracts only by
negotiating directly with the counterparty. Thus, there can be no assurance
that the Trust will in fact be able to close out a forward currency contract
at a favorable price prior to maturity. In addition, in the event of
insolvency of the counterparty, the Trust might be unable to close out a
forward currency contract. In either event, the Trust would continue to be
subject to market risk with respect to the position, and would continue to be
required to maintain a position in securities denominated in the foreign
currency or to maintain cash or liquid assets in a segregated account. The
precise matching of forward currency contract amounts and the value of the
securities involved generally will not be possible because the value of such
securities, measured in the foreign currency, will change after the forward
currency contract has been established. Thus, the Trust might need to purchase
or sell foreign currencies in the spot (cash) market to the extent such
foreign currencies are not covered by forward currency contracts. The
projection of short term currency market movements is extremely difficult, and
the successful execution of a short term hedging strategy is highly uncertain.

         Calls on Securities, Indices and Futures Contracts. In order to
enhance income or reduce fluctuations on net asset value, the Trust may sell
or purchase call options ("calls") on securities and indices based upon the
prices of futures contracts and debt securities that are traded on U.S. and
foreign securities exchanges and in the over-the-counter markets. A call
option gives the purchaser of the option the right to buy, and obligates the
seller to sell, the underlying security, futures contract or index at the
exercise price at any time or at a specified time during the option period.
All such calls sold by the Trust must be "covered" as long as the call is
outstanding (i.e., the Trust must own the instrument subject to the call or
other securities or assets acceptable for applicable segregation and coverage
requirements). A call sold by the Trust exposes the Trust during the term of
the option to possible loss of opportunity to realize appreciation in the
market price of the underlying security, index or futures contract and may
require the Trust to hold an instrument which it might otherwise have sold.
The purchase of a call gives the Trust the right to buy a security, futures
contract or index at a fixed price. Calls on futures on securities must also
be covered by assets or instruments acceptable under applicable segregation
and coverage requirements.

         Puts on Securities, Indices and Futures Contracts. As with calls, the
Trust may purchase put options ("puts") that relate to securities (whether or
not it holds such securities in its portfolio), indices or futures contracts.
For the same purposes, the Trust may also sell puts on securities, indices or
futures contracts on such securities if the Trust's contingent obligations on
such puts are secured by segregated assets consisting of cash or liquid debt
securities having a value not less than the exercise price. The Trust will not
sell puts if, as a result, more than 50% of the Trust's total assets would be
required to cover its potential obligations under its hedging and other
investment transactions. In selling puts, there is a risk that the Trust may
be required to buy the underlying security at a price higher than the current
market price.

         Interest Rate Transactions. Among the Strategic Transactions are
which the Trust may enter into are interest rate swaps and the purchase or
sale of interest rate caps and floors. The Trust expects to enter into these
transactions primarily to preserve a return or spread on a particular
investment or portion of its portfolio as a duration management technique or
to protect against any increase in the price of securities the Trust
anticipates purchasing at a later date. The Trust intends to use these
transactions for duration and risk management purposes and not as a
speculative investment. The Trust will not sell interest rate caps or floors
that it does not own. Interest rate swaps involve the exchange by the Trust
with another party of their respective commitments to pay or receive interest,
e.g., an exchange of floating rate payments for fixed rate payments with
respect to a notional amount of principal. The purchase of an interest rate
cap entitles the purchaser, to the extent that a specified index exceeds a
predetermined interest rate, to receive payments of interest on a notional
principal amount from the party selling such interest rate cap. The purchase
of an interest rate floor entitles the purchaser, to the extent that a
specified index falls below a predetermined interest rate, to receive payments
of interest on a notional principal amount from the party selling such
interest rate floor.

         The Trust may enter into interest rate swaps, caps and floors on
either an asset-based or liability-based basis, depending on whether it is
managing its assets or liabilities, and will usually enter into interest rate
swaps on a net basis, i.e., the two payment streams are netted out, with the
Trust receiving or paying, as the case may be, only the net amount of the two
payments on the payment dates. In as much as these hedging transactions are
incurred into for good faith hedging purposes. BlackRock and the Trust believe
such obligations do not constitute senior securities, and, accordingly will
not treat them as being subject to its borrowing restrictions. The Trust will
accrue the net amount of the excess, if any, of the Trust's obligations over
its entitlements with respect to each interest rate swap on a daily basis and
will designate on its books and records with a custodian an amount of cash or
liquid high grade securities having an aggregate net asset value at all times
at least equal to the accrued excess. The Trust will not enter into any
interest rate swap, cap or floor transaction unless the unsecured senior debt
or the claims-paying ability of the other party thereto is rated in the
highest rating category of at least one nationally recognized statistical
rating organization at the time of entering into such transaction. If there is
a default by the other party to such a transaction, the Trust will have
contractual remedies pursuant to the agreements related to the transaction.
The swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. Caps and floors are more recent
innovations for which standardized documentation has not yet been developed
and, accordingly, they are less liquid than swaps.

         Credit Derivatives. The Trust 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 transactional forms for credit derivatives: swaps, options and
structured instruments. 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 BlackRock is incorrect in
its forecasts of default risks, market spreads or other applicable factors,
the investment performance of the Trust would diminish compared with what it
would have been if these techniques were not used. Moreover, even if BlackRock
is correct in its forecasts, there is a risk that a credit derivative position
may correlate imperfectly with the price of the asset or liability being
protected. There is no limit on the amount of credit derivative transactions
that may be entered into by the Trust. The Trust's risk of loss in a credit
derivative transaction varies with the form of the transaction. For example,
if the Trust purchases a default option on a security, and if no default
occurs with respect to the security, the Trust's loss is limited to the
premium it paid for the default option. In contrast, if there is a default by
the grantor of a default option, the Trust'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.

         Appendix A contains further information about the characteristics,
risks and possible benefits of Strategic Transactions and the Trust's other
policies and limitations (which are not fundamental policies) relating to
investment in futures contracts and options. The principal risks relating to
the use of futures contracts and other Strategic Transactions are: (a) less
than perfect correlation between the prices of the instrument and the market
value of the securities in the Trust's portfolio; (b) possible lack of a
liquid secondary market for closing out a position in such instruments; (c)
losses resulting from interest rate or other market movements not anticipated
by BlackRock; and (d) the obligation to meet additional variation margin or
other payment requirements, all of which could result in the Trust being in a
worse position than if such techniques had not been used.

         Certain provisions of the Code may restrict or affect the ability of
the Trust to engage in Strategic Transactions. See "Tax Matters."

Short Sales

         The Trust may make short sales of securities. A short sale is a
transaction in which the Trust sells a security it does not own in
anticipation that the market price of that security will decline. The Trust
may make short sales to hedge positions, for risk management, in order to
maintain portfolio flexibility or to enhance income or gain.

         When the Trust makes a short sale, it must borrow the security sold
short and deliver it to the broker-dealer through which it made the short sale
as collateral for its obligation to deliver the security upon conclusion of
the sale. The Trust may have to pay a fee to borrow particular securities and
is often obligated to pay over any payments received on such borrowed
securities.

         The Trust's obligation to replace the borrowed security will be
secured by collateral deposited with the broker-dealer, usually cash, U.S.
Government securities or other liquid securities. The Trust will also be
required to designate on its books and records similar collateral with its
custodian to the extent, if any, necessary so that the aggregate collateral
value is at all times at least equal to the current market value of the
security sold short. Depending on arrangements made with the broker-dealer
from which it borrowed the security regarding payment over of any payments
received by the Trust on such security, the Trust may not receive any payments
(including interest) on its collateral deposited with such broker-dealer.

         If the price of the security sold short increases between the time of
the short sale and the time the Trust replaces the borrowed security, the
Trust will incur a loss; conversely, if the price declines, the Trust will
realize a gain. Any gain will be decreased, and any loss increased, by the
transaction costs described above. Although the Trust's gain is limited to the
price at which it sold the security short, its potential loss is theoretically
unlimited.

         The Trust will not make a short sale if, after giving effect to such
sale, the market value of all securities sold short exceeds 25% of the value
of its total assets or the Trust's aggregate short sales of a particular class
of securities exceeds 25% of the outstanding securities of that class. The
Trust may also make short sales "against the box" without respect to such
limitations. In this type of short sale, at the time of the sale, the Trust
owns or has the immediate and unconditional right to acquire at no additional
cost the identical security.

Brady Bonds

         The Trust's emerging market debt securities may include emerging
market governmental debt obligations commonly referred to as Brady Bonds.
Brady Bonds are securities created through the exchange of existing commercial
bank loans to sovereign entities for new obligations in connection with debt
restructurings under a debt restructuring plan introduced by former U.S.
Secretary of the Treasury, Nicholas F. Brady (the "Brady Plan"). Brady Plan
debt restructurings have been implemented in a number of countries, including:
Argentina, Bolivia, Brazil, Bulgaria, Costa Rica, the Dominican Republic,
Ecuador, Jordan, Mexico, Niger, Nigeria, Panama, Peru, the Philippines,
Poland, Uruguay, and Venezuela.

Supranational Organization Obligations

         The Trust may purchase debt securities of supranational organizations
such as the World Bank, which are chartered to promote economic development.


                   OTHER INVESTMENT POLICIES AND TECHNIQUES

Restricted and Illiquid Securities

         The Trust may not be able to readily dispose of illiquid securities
at prices that approximate those at which the Trust could sell such securities
if they were more widely traded and, as a result of such illiquidity, the
Trust may have to sell other investments or engage in borrowing transactions
if necessary to raise cash to meet its obligations.

         The Trust may purchase certain securities eligible for resale to
qualified institutional buyers as contemplated by Rule 144A under the
Securities Act ("Rule 144A Securities"). Rule 144A provides an exemption from
the registration requirements of the Securities Act for the resale of certain
restricted securities to certain qualified institutional buyers. One effect of
Rule 144A is that certain restricted securities may be considered liquid,
though no assurance can be given that a liquid market for Rule 144A Securities
will develop or be maintained. However, where a substantial market of
qualified institutional buyers has developed for certain unregistered
securities purchased by the Trust pursuant to Rule 144A under the Securities
Act, the Trust intends to treat such securities as liquid securities in
accordance with procedures approved by the Trust's board of trustees. Because
it is not possible to predict with assurance how the market for Rule 144A
Securities will develop, the Trust's board of trustees has directed BlackRock
to monitor carefully the Trust's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a period
of time, qualified institutional buyers cease purchasing restricted securities
pursuant to Rule 144A, the Trust's investing in such securities may have the
effect of increasing the level of illiquidity in its investment portfolio
during such period.

When-Issued and Forward Commitment Securities

         The Trust may purchase securities on a "when-issued" basis and may
purchase or sell securities on a "forward commitment" basis in order to
acquire the security or to hedge against anticipated changes in interest rates
and prices. When such transactions are negotiated, the price, which is
generally expressed in yield terms, is fixed at the time the commitment is
made, but delivery and payment for the securities take place at a later date.
When-issued securities and forward commitments may be sold prior to the
settlement date, but the Trust will enter into when-issued and forward
commitments only with the intention of actually receiving or delivering the
securities, as the case may be (provided that dollar roll transactions will
not be considered forward commitment transactions if they are entered into on
the basis of regular way settlement). If the Trust disposes of the right to
acquire a when-issued security prior to its acquisition or disposes of its
right to deliver or receive against a forward commitment, it might incur a
gain or loss. At the time the Trust enters into a transaction on a when-issued
or forward commitment basis, it will designate on its books and records cash
or liquid debt securities equal to at least the value of the when-issued or
forward commitment securities. The value of these assets will be monitored
daily to ensure that their marked to market value will at all times equal or
exceed the corresponding obligations of the Trust. There is always a risk that
the securities may not be delivered and that the Trust may incur a loss.
Settlements in the ordinary course, which may take substantially more than
five business days, are not treated by the Trust as when-issued or forward
commitment transactions and accordingly are not subject to the foregoing
restrictions.

         Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest rates
rise) based upon the public's perception of the creditworthiness of the issuer
and changes, actual or anticipated, in the level of interest rates. Securities
purchased with a forward commitment or when-issued basis may expose the Trust
to risks because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can involve the
additional risks that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. Purchasing securities on a forward commitment or when-issued basis
when the Trust is fully invested may result in greater potential fluctuation
in the value of the Trust's net assets and its net asset value per share.

Rights Offerings and Warrants to Purchase

         The Trust may participate in rights offerings and may purchase
warrants, which are privileges issued by corporations enabling the owners to
subscribe to and purchase a specified number of shares of the corporation at a
specified price during a specified period of time. Subscription rights
normally have a short life span to expiration. The purchase of rights or
warrants involves the risk that a Portfolio could lose the purchase value of a
right or warrant if the right to subscribe to additional shares is not
exercised prior to the rights' and warrants' expiration. Also, the purchase of
rights and/or warrants involves the risk that the effective price paid for the
right and/or warrant added to the subscription price of the related security
may exceed the value of the subscribed security's market price such as when
there is no movement in the level of the underlying security.

Reverse Repurchase Agreements

         The Trust may enter into reverse repurchase agreements with respect
to its portfolio investments subject to the investment restrictions set forth
herein. Reverse repurchase agreements involve the sale of securities held by
the Trust with an agreement by the Trust to repurchase the securities at an
agreed upon price, date and interest payment. At the time the Trust enters
into a reverse repurchase agreement, it may designate on its books and records
liquid instruments having a value not less than the repurchase price
(including accrued interest). If the Trust establishes and maintains such a
segregated account, a reverse repurchase agreement will not be considered a
borrowing by the Trust; however, under certain circumstances in which the
Trust does not establish and maintain such a segregated account, such reverse
repurchase agreement will be considered a borrowing for the purpose of the
Trust's limitation on borrowings. The use by the Trust of reverse repurchase
agreements involves many of the same risks of leverage since the proceeds
derived from such reverse repurchase agreements may be invested in additional
securities. Reverse repurchase agreements involve the risk that the market
value of the securities acquired in connection with the reverse repurchase
agreement may decline below the price of the securities the Trust has sold but
is obligated to repurchase. Also, reverse repurchase agreements involve the
risk that the market value of the securities retained in lieu of sale by the
Trust in connection with the reverse repurchase agreement may decline in
price.

         If the buyer of securities under a reverse repurchase agreement files
for bankruptcy or becomes insolvent, such buyer or its trustee or receiver may
receive an extension of time to determine whether to enforce the Trust's
obligation to repurchase the securities, and the Trust's use of the proceeds
of the reverse repurchase agreement may effectively be restricted pending such
decision. Also, the Trust would bear the risk of loss to the extent that the
proceeds of the reverse repurchase agreement are less than the value of the
securities subject to such agreement.

Dollar Roll Transactions

         To take advantage of attractive opportunities in the bond market and
to enhance current income, the Trust may enter into dollar roll transactions.
A dollar roll transaction involves a sale by the Trust of a mortgage-backed or
other security concurrently with an agreement by the Trust to repurchase a
similar security at a later date at an agreed upon price. The securities that
are repurchased will bear the same interest rate and stated maturity as those
sold, but pools of mortgages collateralizing those securities may have
different prepayment histories than those sold. During the period between the
sale and repurchase, the Trust will not be entitled to receive interest and
principal payments on the securities sold. Proceeds of the sale will be
invested in additional instruments for the Trust, and the income from these
investments will generate income for the Trust. If such income does not exceed
the income, capital appreciation and gain or loss that would have been
realized on the securities sold as part of the dollar roll, the use of this
technique will diminish the investment performance of the Trust compared with
what the performance would have been without the use of dollar rolls. At the
time the Trust enters into a dollar roll transaction, it will place in a
segregated account maintained with its custodian cash, U.S. Government
securities or other liquid securities having a value equal to the repurchase
price (including accrued interest) and will subsequently monitor the account
to ensure that its value is maintained. The Trust's dollar rolls, together
with its reverse repurchase agreements, the issuance of Preferred Shares and
other borrowings, will not exceed, in the aggregate, 38% of the value of its
total managed assets.

         Dollar roll transactions involve the risk that the market value of
the securities the Trust is required to purchase may decline below the agreed
upon repurchase price of those securities. The Trusts right to purchase or
repurchase securities may be restricted. Successful use of mortgage dollar
rolls may depend upon the investment manager's ability to correctly predict
interest rates and prepayments. There is no assurance that dollar rolls can be
successfully employed.

Repurchase Agreements

         As temporary investments, the Trust may invest in repurchase
agreements. A repurchase agreement is a contractual agreement whereby the
seller of securities agrees to repurchase the same security at a specified
price on a future date agreed upon by the parties. The agreed-upon repurchase
price determines the yield during the Trust's holding period. Repurchase
agreements are considered to be loans collateralized by the underlying
security that is the subject of the repurchase contract. The Trust will only
enter into repurchase agreements with registered securities dealers or
domestic banks that, in the opinion of BlackRock, present minimal credit risk.
The risk to the Trust is limited to the ability of the issuer to pay the
agreed-upon repurchase price on the delivery date; however, although the value
of the underlying collateral at the time the transaction is entered into
always equals or exceeds the agreed-upon repurchase price, if the value of the
collateral declines there is a risk of loss of both principal and interest. In
the event of default, the collateral may be sold but the Trust might incur a
loss if the value of the collateral declines, and might incur disposition
costs or experience delays in connection with liquidating the collateral. In
addition, if bankruptcy proceedings are commenced with respect to the seller
of the security, realization upon the collateral by the Trust may be delayed
or limited. BlackRock will monitor the value of the collateral at the time the
transaction is entered into and at all times subsequent during the term of the
repurchase agreement in an effort to determine that such value always equals
or exceeds the agreed-upon repurchase price. In the event the value of the
collateral declines below the repurchase price, BlackRock will demand
additional collateral from the issuer to increase the value of the collateral
to at least that of the repurchase price, including interest.

Lending of Securities

         The Trust may lend its portfolio securities to banks or dealers which
meet the creditworthiness standards established by the board of trustees of
the Trust ("Qualified Institutions"). By lending its portfolio securities, the
Trust attempts to increase its income through the receipt of interest on the
loan. Any gain or loss in the market price of the securities loaned that may
occur during the term of the loan will be for the account of the Trust. The
Trust may lend its portfolio securities so long as the terms and the structure
of such loans are not inconsistent with requirements of the Investment Company
Act, which currently require that (i) the borrower pledge and maintain with
the Trust collateral consisting of cash, a letter of credit issued by a
domestic U.S. bank, or securities issued or guaranteed by the U.S. government
having a value at all times not less than 100% of the value of the securities
loaned, (ii) the borrower add to such collateral whenever the price of the
securities loaned rises (i.e., the value of the loan is "marked to the market"
on a daily basis), (iii) the loan be made subject to termination by the Trust
at any time and (iv) the Trust receive reasonable interest on the loan (which
may include the Trust's investing any cash collateral in interest bearing
short term investments), any distributions on the loaned securities and any
increase in their market value. The Trust will not lend portfolio securities
if, as a result, the aggregate of such loans exceeds 331/3% of the value of
the Trust's total assets (including such loans). Loan arrangements made by the
Trust will comply with all other applicable regulatory requirements, including
the rules of the New York Stock Exchange, which rules presently require the
borrower, after notice, to redeliver the securities within the normal
settlement time of five business days. All relevant facts and circumstances,
including the creditworthiness of the Qualified Institution, will be monitored
by BlackRock, and will be considered in making decisions with respect to
lending securities, subject to review by the Trust's board of trustees.

         The Trust may pay reasonable negotiated fees in connection with
loaned securities, so long as such fees are set forth in a written contract
and approved by the Trust's board of trustees. In addition, voting rights may
pass with the loaned securities, but if a material event were to occur
affecting such a loan, the loan must be called and the securities voted.

                            MANAGEMENT OF THE TRUST

Investment Management Agreement

         Although BlackRock Advisors intends to devote such time and effort to
the business of the Trust as is reasonably necessary to perform its duties to
the Trust, the services of BlackRock Advisors are not exclusive and BlackRock
Advisors provides similar services to other investment companies and other
clients and may engage in other activities.

         The investment management agreement also provides that in the absence
of willful misfeasance, bad faith, gross negligence or reckless disregard of
its obligations thereunder, BlackRock Advisors is not liable to the Trust or
any of the Trust's shareholders for any act or omission by BlackRock Advisors
in the supervision or management of its respective investment activities or
for any loss sustained by the Trust or the Trust's shareholders and provides
for indemnification by the Trust of BlackRock Advisors, its directors,
officers, employees, agents and control persons for liabilities incurred by
them in connection with their services to the Trust, subject to certain
limitations and conditions.

         The investment management agreement was approved by the Trust's board
of trustees at an in-person meeting of the board of trustees held on _______,
2004, including a majority of the trustees who are not parties to the
agreement or interested persons of any such party (as such term is defined in
the Investment Company Act.) The investment management agreement provides for
the Trust to pay a management fee at an annual rate equal to __% of the
average weekly value of the Trust's net assets. BlackRock Financial
Management, the Sub-Advisor, is a wholly owned subsidiary of BlackRock, Inc.
Pursuant to the sub-investment advisory agreement, BlackRock Advisors has
appointed BlackRock Financial Management, one of its affiliates, to perform
certain of the day-to-day investment management of the Trust. BlackRock
Financial Management will receive a portion of the management fee paid by the
Trust to BlackRock Advisors. From the management fees, BlackRock Advisors will
pay BlackRock Financial Management, for serving as Sub-Advisor, 50% of the
monthly management fees received by BlackRock Advisors.

         In approving these agreements, the board of trustees considered,
among other things, (i) the investment objective and policies of the Trust,
(ii) the team of investment advisory personnel assigned to the Trust, (iii)
the nature and quality of the services to be provided to the Trust by
BlackRock Advisors, (iv) the Trust's fee and expense data as compared to
various benchmarks and a peer group of closed-end funds with similar
investment strategies as the Trust, (v) BlackRock's profitability with respect
to the management of the BlackRock family of closed-end funds, and (vi) the
direct and indirect benefits to BlackRock from its relationship with the
Trust.

         Based on the information reviewed or discussions held with respect to
each of the foregoing items, the board of trustees, including a majority of
the non-interested trustees, concluded that it was satisfied with the nature
and quality of the services to be provided by BlackRock to the Trust and that
the advisory fee rate was reasonable in relation to such services. The
non-interested trustees were represented by independent counsel who assisted
them in their deliberations.

         The investment management agreement was approved by the sole common
shareholder of the Trust as of                 , 2004. The investment
management agreement will continue in effect for a period of two years from its
effective date, and if not sooner terminated, will continue in effect for
successive periods of 12 months thereafter, provided that each continuance is
specifically approved at least annually by both (1) the vote of a majority of
the Trust's board of trustees or the vote of a majority of the outstanding
voting securities of the Trust (as such term is defined in the Investment
Company Act) and (2) by the vote of a majority of the trustees who are not
parties to the investment management agreement or interested persons (as such
term is defined in the Investment Company Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval. The
investment management agreement may be terminated as a whole at any time by the
Trust, without the payment of any penalty, upon the vote of a majority of the
Trust's board of trustees or a majority of the outstanding voting securities of
the Trust or by BlackRock Advisors, on 60 days' written notice by either party
to the other which can be waived by the non-terminating party. The investment
management agreement will terminate automatically in the event of its
assignment (as such term is defined in the Investment Company Act and the rules
thereunder).

Sub-Investment Advisory Agreement

         BlackRock Financial Management, the Sub-Advisor, is a wholly owned
subsidiary of BlackRock, Inc. Pursuant to the sub-investment advisory
agreement, BlackRock Advisors has appointed BlackRock Financial Management,
one of its affiliates, to perform certain of the day-to-day investment
management of the Trust. BlackRock Financial Management will receive a portion
of the management fee paid by the Trust to BlackRock Advisors. From the
management fees, BlackRock Advisors will pay BlackRock Financial Management,
for serving as Sub-Advisor, % of the monthly management fees received by
BlackRock Advisors.

         The sub-investment advisory agreement also provides that, in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations thereunder, the Trust will indemnify BlackRock
Financial Management, its directors, officers, employees, agents, associates
and control persons for liabilities incurred by them in connection with their
services to the Trust, subject to certain limitations.

         Although BlackRock Financial Management intends to devote such time
and effort to the business of the Trust as is reasonably necessary to perform
its duties to the Trust, the services of BlackRock Financial Management are
not exclusive and BlackRock Financial Management provides similar services to
other investment companies and other clients and may engage in other
activities.

         The sub-investment advisory agreement was approved by the Trust's
board of trustees at an in-person meeting of the board of trustees held on ,
2004, including a majority of the trustees who are not parties to the
agreement or interested persons of any such party (as such term is defined in
the Investment Company Act). In approving this agreement the board of trustees
considered, among other things, (i) the nature and quality of the services to
be provided to the Trust by BlackRock Financial Management, (ii) the Trust's
fee and expense data as compared to various benchmarks and a peer group of
closed-end funds with similar investment strategies as the Trust, (iii)
BlackRock's profitability with respect to the management of the BlackRock
family of closed-end funds, and (iv) the direct and indirect benefits to
BlackRock Financial Management from its relationship with the Trust.

         During its deliberations, the board of trustees focused on the
experience, resources and strengths of BlackRock Financial Management in
sub-advising investment companies that invest in debt securities.

         Based on the information reviewed and the discussions the followed,
the board of trustees, including a majority of the non-interested trustees,
concluded that it was satisfied with the nature and quality of the services to
be provided by BlackRock Financial Management, Inc. to the Trust and that the
sub-advisory fee rate was reasonable in relation to such services. The
non-interested trustees were represented by independent counsel who assisted
them in their deliberations.

         The sub-investment advisory agreement was approved by the sole common
shareholder of the Trust as of               , 2004. The sub-investment
advisory agreement will continue in effect for a period of two years from its
effective date, and if not sooner terminated, will continue in effect for
successive periods of 12 months thereafter, provided that each continuance is
specifically approved at least annually by both (1) the vote of a majority of
the Trust's board of trustees or the vote of a majority of the outstanding
voting securities of the Trust (as defined in the Investment Company Act) and
(2) by the vote of a majority of the trustees who are not parties to such
agreement or interested persons (as such term is defined in the Investment
Company Act) of any such party, cast in person at a meeting called for the
purpose of voting on such approval. The sub-investment advisory agreement may
be terminated as a whole at any time by the Trust without the payment of any
penalty, upon the vote of a majority of the Trust's board of trustees or a
majority of the outstanding voting securities of the Trust, or by BlackRock
Advisors or BlackRock Financial Management, on 60 days' written notice by
either party to the other. The sub-investment advisory agreement will also
terminate automatically in the event of its assignment (as such term is defined
in the Investment Company Act and the rules thereunder).

Trustees and Officers

         The officers of the Trust manage its day-to-day operations. The
officers are directly responsible to the Trust's board of trustees which sets
broad policies for the Trust and chooses its officers. Anne F. Ackerley is the
sole initial Trustee of the Trust. Following is a list of her present
positions and principal occupations during the last five years. Ms. Ackerley
is an interested person of the Trust (as defined by the Investment Company
Act). The business address of the Trust, BlackRock Advisors and their board
members and officers is 100 Bellevue Parkway, Wilmington, Delaware 19809,
unless specified otherwise below. Ms. Ackerley is an officer of other
closed-end funds in which BlackRock Advisors acts as investment adviser.

<TABLE>
<CAPTION>
                                                             Principal Occupation During the Past
Name and Age                  Title                            Five Years and Other Affiliations

<S>                  <C>                    <C>
Anne F. Ackerley     Sole Initial Trustee   Managing Director of BlackRock, Inc. since 2000. Formerly, First Vice
Age: 41                                     President and Chief Operating Officer, Mergers and Acquisition Group
                                            at Merrill Lynch & Co. from 1997 to 2000; First Vice President and
                                            Chief Operating Officer, Public Finance Group at Merrill Lynch & Co.
                                            from 1995 to 1997; First Vice President, Emerging Markets Fixed
                                            Income Research at Merrill Lynch & Co. prior thereto.

         Prior to this offering, all of the outstanding shares of the Trust were owned by an affiliate of BlackRock
Advisors.

<CAPTION>
<S>                                   <C>                            <C>
                                                                     Aggregate Dollar Range Of Equity Securities
                                        Dollar Range Of Equity        Overseen By Directors In The Family In All
Name of Director                      Securities In The Trust(*)          Registered Investment Companies(*)









-----------------
(*)   As of December 31, 2003. The Trustees do not own shares in the Trust as it is a newly formed closed-end investment
      company.

         The fees and expenses of the Independent Trustees of the Trust are paid by the Trust. The trustees who are
members of the BlackRock organization receive no compensation from the Trust. During the year ended December 31, 2003,
the Independent Trustees/Directors earned the compensation set forth below in their capacities as trustees/directors of
the funds in the BlackRock Family of Funds. It is estimated that the Independent Trustees will receive from the Trust
the amounts set forth below for the Trust's calendar year ending December 31, 2004, assuming the Trust will have been in
existence for the full calendar year.

<CAPTION>
                                       Estimated Compensation From     Total Compensation From The Trust And Fund
        Name of Board Member                    The Trust                   Complex Paid To Board Members(1)
-------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                             <C>







(1)      Estimates the total compensation to be earned by that person during the calendar year end December 31, 2004
         from the closed-end funds advised by the Advisor (the "Fund Complex").

(2)      Of these amounts it is anticipated that Messrs.      ,        ,        ,         and          may defer
         $0, $0, $0, $0, $2,000 and $0, respectively, pursuant to the Fund Complex's deferred compensation plan in
         the calendar year ended December 31, 2004.

(3)                 serves as "lead director" for each board of trustees/directors in the Fund Complex. For his
         services as lead trustee/director,            will be compensated in the amount of $40,000 per annum
         by the Fund Complex.

(4)      Of this amount, Messrs.           ,         ,         ,        and        are expected to defer
         $50,000, $50,000, $190,000, $30,000 $50,000 and $30,000, respectively, pursuant to the Fund
         Complex's deferred compensation plan.

(5)      Includes compensation for service on the Audit Committee.
</TABLE>

         Each Independent Trustee will receive an annual fee calculated as
follows: (i) $6,000 from each fund/trust in the Fund Complex and (ii) $1,000
for each meeting of each board in the Fund Complex attended by such
Independent Trustee. The total annual aggregate compensation for each
Independent Trustee is capped at $190,000 per annum, except that
will receive an additional $40,000 per annum from the Fund Complex for acting
as the lead trustee for each board of trustees/directors in the Fund Complex
and Messrs.        ,               and will receive an additional $20,000 per
annum from the Fund Complex for their service on the audit committee of the
Fund Complex. This additional compensation to Messrs.         ,           and
        will be allocated among the fund/trusts in the Fund Complex based on
their relative net assets.

         In the event that the $190,000 cap is met with respect to an
Independent Trustee, the amount of the Independent Trustee's fee borne by each
fund/trust in the Fund Complex is reduced by reference to the net assets of the
Trust relative to the other funds/trusts in the Fund Complex. In addition, the
attendance fees of each Independent Trustee are reduced proportionately, based
on each respective fund's/trust's net assets, so that the aggregate per meeting
fee for all meetings of the boards of trustees/directors of the funds/trusts
(excluding the per annum audit committee fee) held on a single day does not
exceed $15,834 for any Independent Trustee.

         Certain of the above fees paid to the Independent Trustees will be
subject to mandatory deferrals pursuant to the Fund Complex's deferred
compensation plan. The Independent Trustees have agreed that at least $30,000
of their $190,000 base fee will be mandatory deferred pursuant to the Fund
Complex's deferred compensation plan. Also, members of the audit committee of
the Fund Complex will be required to defer all of the $20,000 per annum fee
they will receive for their services on the audit committee pursuant to the
Fund Complex's deferred compensation plan. Under the deferred compensation
plan, deferred amounts earn a return for the Independent Trustees as though
equivalent dollar amounts had been invested in common shares of certain other
funds/trusts in the Fund Complex selected by the Independent Trustees. This
has the same economic effect for the Independent Trustees as if they had
invested the deferred amounts in such other funds/trusts. The deferred
compensation plan is not funded and obligations thereunder represent general
unsecured claims against the general assets of a fund/trust. A fund/trust may,
however, elect to invest in common shares of those funds/trusts selected by
the Independent Trustee in order to match its deferred compensation
obligations.

         The board of trustees of the Trust currently has three committees: an
Executive Committee, an Audit Committee and a Governance Committee.

         The Executive Committee consists of Messrs.           and
        , and acts in accordance with the powers permitted to such a committee
under the Agreement and Declaration of Trust and the By-Laws of the Trust. The
Executive Committee, subject to the Trust's Agreement and Declaration of Trust,
By-Laws and applicable law, acts on behalf of the full board of trustees in the
intervals between meetings of the Board.

         The Audit Committee consists of Messrs.       ,      ,       and
        . The Audit Committee acts according to the Audit Committee charter.
         has been appointed as Chairman of the Audit Committee. The Audit
Committee is responsible for reviewing and evaluating issues related to the
accounting and financial reporting policies of the Trust, overseeing the
quality and objectivity of the Trust's financial statements and the audit
thereof and to act as a liaison between the board of trustees and the Trust's
independent accountants. The board of trustees of the Trust has determined
that the Trust has two audit committee financial experts serving on its Audit
Committee,           and           , both of whom are independent for the
purpose of the definition of audit committee financial expert as applicable to
the Trust.

         The Governance Committee consists of Messrs.      ,      ,        ,
       and         . The Governance Committee acts in accordance with the
Governance Committee charter.         has been appointed as Chairman of the
Governance Committee. The Governance Committee consists of the Independent
Trustees and performs those functions enumerated in the Governance Committee
Charter including, but not limited to, making nominations for the appointment
or election of Independent Trustees including shareholder nominees, reviewing
Independent Trustee compensation, retirement policies and personnel training
policies and administrating the provisions of the Code of Ethics applicable to
the Independent Trustees.

         The Governance Committee will consider trustee candidates recommended
by shareholders. In considering candidates submitted by shareholders, the
Governance Committee will take into consideration the needs of the Board and
the qualifications of the candidate. The Governance Committee may also take
into consideration the number of shares held by the recommending shareholder
and the length of time that such shares have been held. To have a candidate
considered by the Governance Committee, a shareholder must submit the
recommendation in writing and must include:

         o  The name of the shareholder and evidence of the person's ownership
            of shares of the applicable Trust, including the number of shares
            owned and the length of time of ownership; and

         o  The name of the candidate, the candidate's resume or a listing of
            his or her qualifications to be a trustee of the Trust and the
            person's consent to be named as a trustee if selected by the
            Governance Committee and nominated by the Board.

         The shareholder recommendation and information described above must
be sent to the Corporate Secretary, c/o BlackRock, P.O. Box 4546, New York,
New York 10163.

         No Trustee who is not an interested person of the Trust owns
beneficially or of record, any security of BlackRock Advisors or any person
(other than a registered investment company) directly or indirectly
controlling, controlled by or under common control with BlackRock Advisors.

         As the Trust is a closed-end investment company with no prior
investment operations, no meetings of the above committees have been held in
the current fiscal year, provided that the Governance Committee has acted by
written consent to form the Audit Committee and the Audit Committee has had an
initial meeting in connection with the organization of the Trust.

         No Trustee who is not an interested person of the Trust owns
beneficially or of record, any security of BlackRock Advisors or any person
(other than a registered investment company) directly or indirectly
controlling, controlled by or under common control with BlackRock Advisors.

Proxy Voting Policies

         The board of trustees of the Trust has delegated the voting of
proxies for Trust securities to BlackRock pursuant to BlackRock's proxy voting
guidelines. Under these guidelines, BlackRock will vote proxies related to
Trust securities in the best interests of the Trust and its shareholders. A
copy of BlackRock's proxy voting procedures are attached as Appendix B to this
Statement of Additional Information.

Codes of Ethics

         The Trust, the Advisor and the Sub-Advisor have adopted codes of
ethics under Rule 17j-1 of the Investment Company Act. These codes permit
personnel subject to the codes to invest in securities, including securities
that may be purchased or held by the Trust. These codes can be reviewed and
copied at the Securities and Exchange Commission's Public Reference Room in
Washington, D.C. Information on the operation of the Public Reference Room may
be obtained by calling the Securities and Exchange Commission at
1-202-942-8090. The code of ethics are available on the EDGAR Database on the
Securities and Exchange Commission's web site (http://www.sec.gov), and copies
of these codes may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing the
Securities and Exchange Commission's Public Reference Section, Washington,
D.C. 20549-0102.

Investment Advisor and Sub-Advisor

         BlackRock Advisors acts as the Trust's investment advisor. BlackRock
Financial Management acts as the Trust's sub-advisor. BlackRock Advisors,
located at 100 Bellevue Parkway, Wilmington, Delaware 19809, and BlackRock
Financial Management, located at 40 East 52nd Street, New York, New York
10022, are wholly owned subsidiaries of BlackRock, Inc., which is one of the
largest publicly traded investment management firms in the United States with
approximately $321 billion of assets under management as of March 31, 2004.
BlackRock manages assets on behalf of institutional and individual investors
worldwide through a variety of equity, fixed income, liquidity and alternative
investment products, including the BlackRock Funds and BlackRock Liquidity
Funds. In addition, BlackRock provides risk management and investment system
services to institutional investors under the BlackRock Solutions(R) name.

         The BlackRock organization has over 16 years of experience managing
closed-end products and, at March 31, 2004, advised a closed-end family of 50
active funds with approximately $14.7 billion in assets. Clients are served
from the company's headquarters in New York City, as well as offices in
Wilmington, San Francisco, Boston, Edinburgh, Tokyo and Hong Kong. BlackRock,
Inc. is a member of The PNC Financial Services Group, Inc. ("PNC"), one of the
largest diversified financial services organizations in the United States, and
is majority-owned by PNC and by BlackRock employees. The BlackRock organization
invented the term trust in 1988 and has successfully managed five consecutive
term trusts to returning principal on maturity.


                      PORTFOLIO TRANSACTIONS AND BROKERAGE

         The Advisor and the Sub-Advisor are responsible for decisions to buy
and sell securities for the Trust, the selection of brokers and dealers to
effect the transactions and the negotiation of prices and any brokerage
commissions. The Trust will generally purchase securities on a stock exchange
effected through brokers who charge a commission for their services. The Trust
may also invest in securities that are traded principally in the
over-the-counter market. In the over-the-counter market, securities are
generally traded on a "net" basis with dealers acting as principal for their
own accounts without a stated commission, although the price of such
securities usually includes a mark-up to the dealer. Securities purchased in
underwritten offerings generally include, in the price, a fixed amount of
compensation for the manager(s), underwriter(s) and dealer(s). The Trust may
also purchase certain money market instruments directly from an issuer, in
which case no commissions or discounts are paid.

         Payments of commissions to brokers who are affiliated persons of the
Trust (or affiliated persons of such persons) will be made in accordance with
Rule 17e-1 under the Investment Company Act. Commissions paid on such
transactions would be commensurate with the rate of commissions paid on
similar transactions to brokers that are not so affiliated.

         The Advisor and Sub-Advisor may, consistent with the interests of the
Trust, select brokers on the basis of the research, statistical and pricing
services they provide to the Trust and the Advisor's or Sub-Advisor's other
clients. Such research, statistical and/or pricing services must provide
lawful and appropriate assistance to the Advisor's or Sub-Advisor's investment
decision-making process in order for such research, statistical and/or pricing
services to be considered by the Advisor or Sub-Advisor in selecting a broker.
Information and research received from such brokers will be in addition to,
and not in lieu of, the services required to be performed by the Advisor and
Sub-Advisor under their respective contracts. A commission paid to such
brokers may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Advisor or
Sub-Advisor determines in good faith that such commission is reasonable in
terms either of the transaction or the overall responsibility of the Advisor
or Sub-Advisor and its other clients and that the total commissions paid by
the Trust will be reasonable in relation to the benefits to the Trust over the
long-term. The advisory fees that the Trust pay to the Advisor will not be
reduced as a consequence of the Advisor's or Sub-Advisor's receipt of
brokerage and research services. To the extent that portfolio transactions are
used to obtain such services, the brokerage commissions paid by the Trust will
exceed those that might otherwise be paid by an amount which cannot be
presently determined. Such services generally would be useful and of value to
the Advisor or Sub-Advisor in serving one or more of their other clients and,
conversely, such services obtained by the placement of brokerage business of
other clients generally would be useful to the Advisor and Sub-Advisor in
carrying out their obligations to the Trust. While such services are not
expected to reduce the expenses of the Advisor or Sub-Advisor, the Advisor
would, through use of the services, avoid the additional expenses which would
be incurred if they should attempt to develop comparable information through
their own staffs. Commission rates for brokerage transactions on foreign stock
exchanges are generally fixed.

         One or more of the other investment companies or accounts which the
Advisor and/or the Sub-Advisor manages may own from time to time some of the
same investments as the Trust. Investment decisions for the Trust are made
independently from those of such other investment companies or accounts;
however, from time to time, the same investment decision may be made for more
than one company or account. When two or more companies or accounts seek to
purchase or sell the same securities, the securities actually purchased or
sold will be allocated among the companies and accounts on a good faith
equitable basis by the Advisor and/or the Sub-Advisor in their discretion in
accordance with the accounts' various investment objectives. In some cases,
this system may adversely affect the price or size of the position obtainable
for the Trust. In other cases, however, the ability of the Trust to
participate in volume transactions may produce better execution for the Trust.
It is the opinion of the Trust's board of trustees that this advantage, when
combined with the other benefits available due to the Advisor's or the
Sub-Advisor's organization, outweighs any disadvantages that may be said to
exist from exposure to simultaneous transactions.

         It is not the Trust's policy to engage in transactions with the
objective of seeking profits from short-term trading. It is expected that the
annual portfolio turnover rate of the Trust will be less than 100%. Because it
is difficult to predict accurately portfolio turnover rates, actual turnover
may be higher or lower. Higher portfolio turnover results in increased Trust
costs, including brokerage commissions, dealer mark-ups and other transaction
costs on the sale of securities and on the reinvestment in other securities.


                             DESCRIPTION OF SHARES

Common Shares

         The Trust intends to hold annual meetings of shareholders so long as
the common shares are listed on a national securities exchange and such
meetings are required as a condition to such listing. All common shares are
equal as to dividends, assets and voting privileges and have no conversion,
preemptive or other subscription rights. The Trust will send annual and
semi-annual reports, including financial statements, to all holders of its
shares. The prospectus contains a detailed discussion of the common shares.

Preferred Shares

         The Agreement and Declaration of Trust provides that the Trust's
board of trustees may authorize and issue Preferred Shares with rights as
determined by the board of trustees, by action of the board of trustees
without the approval of the holders of the common shares. Holders of common
shares have no preemptive right to purchase any Preferred Shares that might be
issued. Whenever Preferred Shares are outstanding, the holders of common
shares will not be entitled to receive any distributions from the Trust unless
all accrued dividends on Preferred Shares have been paid, unless asset
coverage (as defined in the Investment Company Act) with respect to Preferred
Shares would be at least 200% after giving effect to the distributions and
unless certain other requirements imposed by any rating agencies rating the
Preferred Shares have been met. The prospectus contains a discussion of the
Preferred Shares it is currently anticipated the Trust will issue.

Other Shares

         The board of trustees (subject to applicable law and the Trust's
Agreement and Declaration of Trust) may authorize an offering, without the
approval of the holders of either common shares or Preferred Shares, of other
classes of shares, or other classes or series of shares, as they determine to
be necessary, desirable or appropriate, having such terms, rights,
preferences, privileges, limitations and restrictions as the board of trustees
see fit. The Trust currently does not expect to issue any other classes of
shares, or series of shares, except for the common shares and the Preferred
Shares.


                          REPURCHASE OF COMMON SHARES

         The Trust is a closed-end management investment company and as such
its shareholders will not have the right to cause the Trust to redeem their
shares. Instead, the Trust's common shares will trade in the open market at a
price that will be a function of several factors, including dividend levels
(which are in turn affected by expenses), net asset value, call protection,
dividend stability, relative demand for and supply of such shares in the
market, general market and economic conditions and other factors. Because
shares of a closed-end investment company may frequently trade at prices lower
than net asset value, the Trust's board of trustees may consider action that
might be taken to reduce or eliminate any material discount from net asset
value in respect of common shares, which may include the repurchase of such
shares in the open market or in private transactions, the making of a tender
offer for such shares, or the conversion of the Trust to an open-end
investment company. The board of trustees may decide not to take any of these
actions. In addition, there can be no assurance that share repurchases or
tender offers, if undertaken, will reduce market discount.

         Notwithstanding the foregoing, at any time when the Trust's Preferred
Shares are outstanding, the Trust may not purchase, redeem or otherwise
acquire any of its common shares unless (1) all accrued Preferred Shares
dividends have been paid and (2) at the time of such purchase, redemption or
acquisition, the net asset value of the Trust's portfolio (determined after
deducting the acquisition price of the common shares) is at least 200% of the
liquidation value of the outstanding Preferred Shares (expected to equal the
original purchase price per share plus any accrued and unpaid dividends
thereon). Any service fees incurred in connection with any tender offer made
by the Trust will be borne by the Trust and will not reduce the stated
consideration to be paid to tendering shareholders.

         Subject to its investment restrictions, the Trust may borrow to
finance the repurchase of shares or to make a tender offer. Interest on any
borrowings to finance share repurchase transactions or the accumulation of
cash by the Trust in anticipation of share repurchases or tenders will reduce
the Trust's net income. Any share repurchase, tender offer or borrowing that
might be approved by the Trust's board of trustees would have to comply with
the Securities Exchange Act of 1934, as amended, the Investment Company Act
and the rules and regulations thereunder.

         Although the decision to take action in response to a discount from
net asset value will be made by the board of trustees at the time it considers
such issue, it is the board's present policy, which may be changed by the
board of trustees, not to authorize repurchases of common shares or a tender
offer for such shares if: (1) such transactions, if consummated, would (a)
result in the de-listing of the common shares from the New York Stock
Exchange, or (b) impair the Trust's status as a regulated investment company
under the Code (which would make the Trust a taxable entity, causing the
Trust's income to be taxed at the corporate level in addition to the taxation
of shareholders who receive dividends from the Trust), or as a registered
closed-end investment company under the Investment Company Act; (2) the Trust
would not be able to liquidate portfolio securities in an orderly manner and
consistent with the Trust's investment objectives and policies in order to
repurchase shares; or (3) there is, in the board's judgment, any (a) material
legal action or proceeding instituted or threatened challenging such
transactions or otherwise materially adversely affecting the Trust, (b)
general suspension of or limitation on prices for trading securities on the
New York Stock Exchange, (c) declaration of a banking moratorium by Federal or
state authorities or any suspension of payment by United States or New York
banks, (d) material limitation affecting the Trust or the issuers of its
portfolio securities by Federal or state authorities on the extension of
credit by lending institutions or on the exchange of foreign currency, (e)
commencement of war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, or (f) other
event or condition which would have a material adverse effect (including any
adverse tax effect) on the Trust or its shareholders if shares were
repurchased. The board of trustees may in the future modify these conditions
in light of experience.

         The repurchase by the Trust of its shares at prices below net asset
value will result in an increase in the net asset value of those shares that
remain outstanding. However, there can be no assurance that share repurchases
or tender offers at or below net asset value will result in the Trust's shares
trading at a price equal to their net asset value. Nevertheless, the fact that
the Trust's shares may be the subject of repurchase or tender offers from time
to time, or that the Trust may be converted to an open-end investment company,
may reduce any spread between market price and net asset value that might
otherwise exist.

         In addition, a purchase by the Trust of its common shares will
decrease the Trust's total assets which would likely have the effect of
increasing the Trust's expense ratio. Any purchase by the Trust of its common
shares at a time when Preferred Shares are outstanding will increase the
leverage applicable to the outstanding common shares then remaining.

         Before deciding whether to take any action if the common shares trade
below net asset value, the Trust's board of trustees would likely consider all
relevant factors, including the extent and duration of the discount, the
liquidity of the Trust's portfolio, the impact of any action that might be
taken on the Trust or its shareholders and market considerations. Based on
these considerations, even if the Trust's shares should trade at a discount,
the board of trustees may determine that, in the interest of the Trust and its
shareholders, no action should be taken.


                                  TAX MATTERS

         The following discussion is a brief summary of certain U.S. federal
income tax considerations affecting the Trust and its shareholders. No attempt
is made to present a detailed explanation of all federal, state, local and
foreign tax concerns affecting the Trust and its shareholders (including
shareholders owning a large position in the Trust), and the discussions set
forth here and in the prospectus do not constitute tax advice. Investors are
urged to consult their own tax advisors with any specific questions relating
to federal, state, local and foreign taxes. The discussion reflects applicable
tax laws of the United States as of the date of this Statement of Additional
Information, which tax laws may be changed or subject to new interpretations
by the courts or the Internal Revenue Service (the "IRS") retroactively or
prospectively.

Taxation of the Trust

         The Trust intends to elect to be treated and to qualify each year as
a regulated investment company under Subchapter M of the Code (a "RIC").
Accordingly, the Trust must, among other things, (i) derive in each taxable
year at least 90% of its gross income (including tax-exempt interest) from
dividends, interest, payments with respect to certain securities loans, and
gains from the sale or other disposition of stock, securities or foreign
currencies, or other income (including but not limited to gains from options,
futures and forward contracts) derived with respect to its business of
investing in such stock, securities or currencies; and (ii) diversify its
holdings so that, at the end of each quarter of each taxable year (a) at least
50% of the market value of the Trust's total assets is represented by cash and
cash items, U.S. government securities, the securities of other RICs and other
securities, with such other securities limited, in respect of any one issuer,
to an amount not greater than 5% of the value of the Trust's total assets and
not more than 10% of the outstanding voting securities of such issuer, and (b)
not more than 25% of the market value of the Trust's total assets is invested
in the securities of any issuer (other than U.S. government securities and the
securities of other RICs) or of any two or more issuers that the Trust
controls and that are determined to be engaged in the same business or similar
or related trades or businesses.

         As a RIC, the Trust generally is not subject to U.S. federal income
tax on income and gains that it distributes each taxable year to shareholders,
if it distributes at least 90% of the sum of the Trust's (i) investment
company taxable income (which includes, among other items, dividends, interest
and the excess of any net short-term capital gain over net long-term capital
loss and other taxable income, other than any net long-term capital gain,
reduced by deductible expenses) determined without regard to the deduction for
dividends paid and (ii) its net tax-exempt interest (the excess of its gross
tax-exempt interest over certain disallowed deductions). The Trust intends to
distribute at least annually substantially all of such income.

         Amounts not distributed on a timely basis in accordance with a
calendar year distribution requirement are subject to a nondeductible 4%
excise tax at the Trust level. To avoid the tax, the Trust must distribute
during each calendar year an amount at least equal to the sum of (i) 98% of
its ordinary income (not taking into account any capital gain or loss) for the
calendar year, (ii) 98% of its capital gain in excess of its capital loss
(adjusted for certain ordinary losses) for a one-year period generally ending
on October 31 of the calendar year (unless an election is made to use the
Trust's fiscal year), and (iii) certain undistributed amounts from previous
years on which the Trust paid no U.S. federal income tax. While the Trust
intends to distribute any income and capital gain in the manner necessary to
minimize imposition of the 4% excise tax, there can be no assurance that
sufficient amounts of the Trust's taxable income and capital gain will be
distributed to avoid entirely the imposition of the tax. In that event, the
Trust will be liable for the tax only on the amount by which it does not meet
the foregoing distribution requirement.

         A distribution will be treated as paid during the calendar year if it
is paid during the calendar year or declared by the Trust in October, November
or December of the year, payable to shareholders of record on a date during
such a month and paid by the Trust during January of the following year. Any
such distributions paid during January of the following year will be deemed to
be received on December 31 of the year the distributions are declared, rather
than when the distributions are received.

         If the Trust were unable to satisfy the 90% distribution requirement
or otherwise were to fail to qualify as a RIC in any year, it would be taxed
in the same manner as an ordinary corporation and distributions to the Trust's
shareholders would not be deductible by the Trust in computing its taxable
income.

The Trust's Investments

         Certain of the Trust's investment practices may subject the Trust to
special tax rules, the effect of which may be to accelerate income to the
Trust, defer the Trust's losses, cause adjustments in the holding periods of
the Trust's securities, convert long-term capital gains into short-term
capital gains and convert short-term capital losses into long-term capital
losses. These rules could therefore affect the amount, timing and character of
distributions to holders of common shares.

         Some of the debt obligations acquired by the Trust may be treated as
debt obligations that are issued with original issue discount ("OID").
Generally, the amount of OID is treated as interest income and is included in
taxable income over the term of the debt security, even through payment of the
amount is not received until a later time, usually when the debt security
matures. The Trust will invest in inflation indexed securities. Generally, an
inflation-adjusted increase in principal is required to be included in income
as OID in the year the increase occurs even though the investor will not
receive payment of amounts equal to such increase until the security matures.
The Trust will be required to distribute dividends equal to substantially all
of its investment company taxable income, including the daily accretion of
inflation adjustment income and other OID income accrued by the Trust with
respect to securities for which the Trust receives no payments in cash prior
to their maturity. The Investment Adviser may have to dispose of securities
under disadvantageous circumstances in order to generate cash to satisfy the
Trust's distribution requirements.

         If the Trust invests (directly or indirectly through a REIT) in
residual interests in REMICs a portion of the Trust's income will be subject
to U.S. federal income tax in all events. "Excess inclusion income" of the
Trust generated by a residual interest in a REMICs will be allocated to
shareholders of the Trust in proportion to the dividends received by the
shareholders of the Trust. Excess inclusion income generally (i) cannot be
offset by net operating losses, (ii) will constitute unrelated business
taxable income to certain tax exempt investors and (iii) in the case of a
foreign shareholder will not qualify for any reduction in U.S. federal
withholding taxes. In addition, if the shareholders of the Trust include a
"disqualified organization" (such as certain governments or governmental
agencies) the Trust may be liable for a tax on the excess inclusion income
allocable to the disqualified organization.

         Income received by the Trust with respect to foreign securities may
be subject to withholding and other taxes imposed by foreign countries. Tax
conventions may reduce or eliminate such taxes. If the Trust invests more than
50% of its total assets in foreign securities, the Trust will elect to have
its foreign tax deduction or credit for foreign taxes paid with respect to
qualifying taxes to be taken by its shareholders instead of on its own return.
In that case, each shareholder shall include in gross income, and also treat
as paid by him, his proportionate share of the foreign taxes paid by the
Trust. If the Trust makes this election, it will furnish its shareholders with
a written notice after the close of the taxable year.

         Investments by the Trust in certain "passive foreign investment
companies" could subject the Trust to U.S. federal income tax (including
interest charges) on certain distributions or dispositions with respect to
those investments which cannot be eliminated by making distributions to
shareholders. Several elections may be available to the Trust to mitigate the
effect of this provision but the elections generally accelerate the
recognition of income without the receipt of cash.

         It is not expected that shareholders will be subject to alternative
minimum tax as a result of an investment in the Trust.

Taxation of Shareholders

         Distributions paid by the Trust from its investment company taxable
income, which includes net short-term capital gain, generally are taxable as
ordinary income to the extent of the Trust's earnings and profits. Such
distributions (if designated by the Trust) may qualify (provided holding
period and other requirements are met) (i) for the dividends received
deduction available to corporations, but only to the extent that the Trust's
income consists of dividends received from U.S. corporations and (ii) under
the Jobs and Growth Tax Relief Reconciliation Act of 2003 (effective for
taxable years after December 31, 2002 through December 31, 2008) ("Tax Act"),
as qualified dividend income eligible for the reduced maximum rate to
individuals of generally 15% (5% for individuals in lower tax brackets) to the
extent that the Trust receives qualified dividend income. Qualified dividend
income is, in general, dividend income from taxable domestic corporations and
certain foreign corporations (e.g., generally, foreign corporations
incorporated in a possession of the United States or in certain countries with
a comprehensive tax treaty with the United States, or the stock of which is
readily tradable on an established securities market in the United States).

         Due to the Trust's expected investments, generally, distributions
will not be eligible for the dividends received deduction allowed to
corporations and will not qualify for the reduced rate on qualified dividend
income allowed to individuals.

         Distributions of net capital gain designated as capital gain
dividends, if any, are taxable to shareholders at rates applicable to
long-term capital gain, whether paid in cash or in shares, and regardless of
how long the shareholder has held the Trust's shares. Capital gain dividends
are not eligible for the dividends received deduction. Under the Tax Act, the
maximum tax rate on net capital gain of individuals is reduced generally from
20% to 15% (5% for individuals in lower brackets) for such gain realized after
May 5, 2003 and before January 1, 2009. Distributions in excess of the Trust's
earnings and profits will first reduce the adjusted tax basis of a holder's
shares and, after such adjusted tax basis is reduced to zero, will constitute
capital gain to such holder (assuming the shares are held as a capital asset).
For non-corporate taxpayers, under the Tax Act, distributions of investment
company taxable income (other than qualified dividend income) will currently
be taxed at a maximum rate of 35%, while net capital gain generally will be
taxed at a maximum rate of 15%. For corporate taxpayers, distributions of both
investment company taxable income and net capital gain are taxed at a maximum
rate of 35%.

         The Trust may retain for reinvestment all or part of its net capital
gain. If any such gain is retained, the Trust will be subject to a tax of 35%
of such amount. In that event, the Trust expects to designate the retained
amount as undistributed capital gain in a notice to its shareholders, each of
whom (i) will be required to include in income for tax purposes as long-term
capital gain its share of such undistributed amounts, (ii) will be entitled to
credit its proportionate share of the tax paid by the Trust against its U.S.
federal income tax liability and to claim refunds to the extent that the
credit exceeds such liability and (iii) will increase its basis in its shares
of the Trust by an amount equal to 65% of the amount of undistributed capital
gain included in such shareholder's gross income.

         Shareholders may be entitled to offset their capital gain dividends
with capital loss. There are a number of statutory provisions affecting when
capital loss may be offset against capital gain, and limiting the use of loss
from certain investments and activities. Accordingly, shareholders with
capital loss are urged to consult their tax advisors.

         The price of shares purchased at any time may reflect the amount of a
forthcoming distribution. Those purchasing shares just prior to a distribution
will receive a distribution which will be taxable to them even though it
represents in part a return of invested capital.

         Upon a sale or exchange of shares, a shareholder will realize a
taxable gain or loss depending upon its basis in the shares. Such gain or loss
will be treated as long-term capital gain or loss if the shares have been held
for more than one year. Any loss realized on a sale or exchange will be
disallowed to the extent the shares disposed of are replaced with
substantially identical shares within a 61-day period beginning 30 days before
and ending 30 days after the date that the shares are disposed of. In such a
case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss.

         Any loss realized by a shareholder on the sale of Trust shares held
by the shareholder for six months or less will be treated for tax purposes as
a long-term capital loss to the extent of any capital gain dividends received
by the shareholder (or amounts credited to the shareholder as an undistributed
capital gain) with respect to such shares.

         Ordinary income dividends and capital gain dividends also may be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisors regarding specific questions about U.S. federal (including the
application of the alternative minimum tax rules), state, local or foreign tax
consequences to them of investing in the Trust.

         A shareholder that is a nonresident alien individual or a foreign
corporation (a "foreign investor") generally may be subject to U.S.
withholding tax at the rate of 30% (or possibly a lower rate provided by an
applicable tax treaty) on ordinary income dividends. Different tax
consequences may result if the foreign investor is engaged in a trade or
business in the United States or, in the case of an individual, is present in
the United States for 183 days or more during a taxable year and certain other
conditions are met.

         The Trust may be required to withhold federal income tax on all
taxable distributions and redemption proceeds payable to non-corporate
shareholders who fail to provide the Trust with their correct taxpayer
identification number or to make required certifications, or who have been
notified by the IRS that they are subject to backup withholding. Backup
withholding is not an additional tax. Any amounts withheld may be refunded or
credited against such shareholder's U.S. federal income tax liability, if any,
provided that the required information is furnished to the IRS.

         The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For the
complete provisions, reference should be made to the pertinent Code sections
and the Treasury regulations promulgated thereunder. The Code and the Treasury
regulations are subject to change by legislative, judicial or administrative
action, either prospectively or retroactively. Persons considering an
investment in common shares should consult their own tax advisors regarding
the purchase, ownership and disposition of common shares.


                                    EXPERTS

         The Statement of Net Assets of the Trust as of       , 2004 appearing
in this Statement of Additional Information has been audited by             ,
independent auditors, as set forth in their report thereon appearing elsewhere
herein, and is included in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.           , located at
             , provides accounting and auditing services to the Trust.


                            ADDITIONAL INFORMATION

         A Registration Statement on Form N-2, including amendments thereto,
relating to the shares offered hereby, has been filed by the Trust with the
Securities and Exchange Commission (the "Commission"), Washington, D.C. The
prospectus and this Statement of Additional Information do not contain all of
the information set forth in the Registration Statement, including any
exhibits and schedules thereto. For further information with respect to the
Trust and the shares offered hereby, reference is made to the Registration
Statement. Statements contained in the prospectus and this Statement of
Additional Information as to the contents of any contract or other document
referred to are not necessarily complete and in each instance reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. A copy of the Registration Statement may be inspected without
charge at the Commission's principal office in Washington, D.C., and copies of
all or any part thereof may be obtained from the Commission upon the payment
of certain fees prescribed by the Commission.


<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Trustees and Shareholder of BlackRock Global Floating Rate
Income Trust

We have audited the accompanying statement of assets and liabilities of
BlackRock Global Floating Rate Income Trust (the "Trust") as of        , 2004,
and the related statements of operations and the changes in net assets for the
period from         , 2004 (date of inception) to         , 2004. These
financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BlackRock Global Floating
Rate Income Trust as of        , 2004, and the results of its operations and
the changes in its net assets for the period from        , 2004 (date of
inception) to        , 2004, in conformity with accounting principles
generally accepted in the United States of America.

<PAGE>


                  BLACKROCK GLOBAL FLOATING RATE INCOME TRUST

                      STATEMENT OF ASSETS AND LIABILITIES

                                     , 2004







<PAGE>


                  BLACKROCK GLOBAL FLOATING RATE INCOME TRUST

                            STATEMENT OF OPERATIONS

         For the period      , 2004 (date of inception) to      , 2004




<PAGE>


                BLACKROCK GLOBAL FLOATING RATE AND INCOME TRUST

                      STATEMENT OF CHANGES IN NET ASSETS

           For the period      , 2004 (date of inception) to       , 2004



<PAGE>

                                   APPENDIX A

                       GENERAL CHARACTERISTICS AND RISKS
                           OF STRATEGIC TRANSACTIONS

In order to manage the risk of its securities portfolio, or to enhance income
or gain as described in the prospectus, the Trust will engage in Strategic
Transactions. The Trust will engage in such activities in the Advisor's or
Sub-Advisor's discretion, and may not necessarily be engaging in such
activities when movements in interest rates that could affect the value of the
assets of the Trust occur. The Trust's ability to pursue certain of these
strategies may be limited by applicable regulations of the CFTC. Certain
Strategic Transactions may give rise to taxable income.

Put and Call Options on Securities and Indices

The Trust may purchase and sell put and call options on securities and
indices. A put option gives the purchaser of the option the right to sell and
the writer the obligation to buy the underlying security at the exercise price
during the option period. The Trust may also purchase and sell options on
securities indices ("index options"). Index options are similar to options on
securities except that, rather than taking or making delivery of securities
underlying the option at a specified price upon exercise, an index option
gives the holder the right to receive cash upon exercise of the option if the
level of the securities index upon which the option is based is greater, in
the case of a call, or less, in the case of a put, than the exercise price of
the option. The purchase of a put option on a security could protect the
Trust's holdings in a security or a number of securities against a substantial
decline in the market value. A call option gives the purchaser of the option
the right to buy and the seller the obligation to sell the underlying security
or index at the exercise price during the option period or for a specified
period prior to a fixed date. The purchase of a call option on a security
could protect the Trust against an increase in the price of a security that it
intended to purchase in the future. In the case of either put or call options
that it has purchased, if the option expires without being sold or exercised,
the Trust will experience a loss in the amount of the option premium plus any
related commissions. When the Trust sells put and call options, it receives a
premium as the seller of the option. The premium that the Trust receives for
selling the option will serve as a partial hedge, in the amount of the option
premium, against changes in the value of the securities in its portfolio.
During the term of the option, however, a covered call seller has, in return
for the premium on the option, given up the opportunity for capital
appreciation above the exercise price of the option if the value of the
underlying security increases, but has retained the risk of loss should the
price of the underlying security decline. Conversely, a secured put seller
retains the risk of loss should the market value of the underlying security
decline be low the exercise price of the option, less the premium received on
the sale of the option. The Trust is authorized to purchase and sell
exchange-listed options and over-the-counter options ("OTC Options") which are
privately negotiated with the counterparty. Listed options are issued by the
Options Clearing Corporation ("OCC") which guarantees the performance of the
obligations of the parties to such options.

The Trust's ability to close out its position as a purchaser or seller of an
exchange-listed put or call option is dependent upon the existence of a liquid
secondary market on option exchanges. Among the possible reasons for the
absence of a liquid secondary market on an exchange are: (i) insufficient
trading interest in certain options; (ii) restrictions on transactions imposed
by an exchange; (iii) trading halts, suspensions or other restrictions imposed
with respect to particular classes or series of options or underlying
securities; (iv) interruption of the normal operations on an exchange; (v)
inadequacy of the facilities of an exchange or OCC to handle current trading
volume; or (vi) a decision by one or more exchanges to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been listed by the OCC as a result of trades on that exchange would generally
continue to be exercisable in accordance with their terms. OTC Options are
purchased from or sold to dealers, financial institutions or other
counterparties which have entered into direct agreements with the Trust. With
OTC Options, such variables as expiration date, exercise price and premium
will be agreed upon between the Trust and the counterparty, without the
intermediation of a third party such as the OCC. If the counterparty fails to
make or take delivery of the securities underlying an option it has written,
or otherwise settle the transaction in accordance with the terms of that
option as written, the Trust would lose the premium paid for the option as
well as any anticipated benefit of the transaction. As the Trust must rely on
the credit quality of the counterparty rather than the guarantee of the OCC,
it will only enter into OTC Options with counterparties with the highest
long-term credit ratings, and with primary United States government securities
dealers recognized by the Federal Reserve Bank of New York.

The hours of trading for options on securities may not conform to the hours
during which the underlying securities are traded. To the extent that the
option markets close before the markets for the underlying securities,
significant price movements can take place in the underlying markets that
cannot be reflected in the option markets.

Futures Contracts and Related Options

Characteristics. The Trust may sell financial futures contracts or purchase
put and call options on such futures to protect against anticipated market
movements. The sale of a futures contract creates an obligation by the Trust,
as seller, to deliver the specific type of financial instrument called for in
the contract at a specified future time for a specified price. Options on
futures contracts are similar to options on securities except that an option
on a futures contract gives the purchaser the right in return for the premium
paid to assume a position in a futures contract (a long position if the option
is a call and a short position if the option is a put).

Margin Requirements. At the time a futures contract is purchased or sold, the
Trust must allocate cash or securities as a deposit payment ("initial
margin"). It is expected that the initial margin that the Trust will pay may
range from approximately 1% to approximately 5% of the value of the securities
or commodities underlying the contract. In certain circumstances, however,
such as periods of high volatility, the Trust may be required by an exchange
to increase the level of its initial margin payment. Additionally, initial
margin requirements may be increased generally in the future by regulatory
action. An outstanding futures contract is valued daily and the payment in
case of "variation margin" may be required, a process known as "marking to the
market." Transactions in listed options and futures are usually settled by
entering into an offsetting transaction, and are subject to the risk that the
position may not be able to be closed if no offsetting transaction can be
arranged.

Limitations on Use of Futures and Options on Futures. The Trust's use of
futures and options on futures will in all cases be consistent with applicable
regulatory requirements and in particular the rules and regulations of the
CFTC. The Trust currently may enter into such transactions without limit for
risk management and duration management and other portfolio strategies. The
Trust may also engage in transactions in futures contracts or related options
to enhance income or gain provided that the Trust will not enter into a
futures contract or related option (except for closing transactions) for
purposes other than risk management including duration management if,
immediately thereafter, the sum of the amount of its initial deposits and
premiums on open contracts and options would exceed 5% of the Trust's
liquidation value, i.e., net assets (taken at current value); provided,
however, that in the case of an option that is in-the-money at the time of the
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation. The above policies are non-fundamental and may be changed by the
Trust's board of trustees at any time. Also, when required, an account of cash
equivalents designated on the books and records will be maintained and marked
to market on a daily basis in an amount equal to the market value of the
contract.

Segregation and Cover Requirements. Futures contracts, interest rate swaps,
caps, floors and collars, short sales, reverse repurchase agreements and
dollar rolls, and listed or OTC options on securities, indices and futures
contracts sold by the Trust are generally subject to earmarking and coverage
requirements of either the CFTC or the SEC, with the result that, if the Trust
does not hold the security or futures contract underlying the instrument, the
T rust will be required to designate on its books and records an ongoing
basis, cash, U.S. government securities, or other liquid high grade debt
obligations in an amount at least equal to the Trust's obligations with
respect to such instruments. Such amounts fluctuate as the obligations
increase or decrease. The earmarking requirement can result in the Trust
maintaining securities positions it would otherwise liquidate, segregating
assets at a time when it might be disadvantageous to do so or otherwise
restrict portfolio management.

Strategic Transactions Present Certain Risks. With respect to risk management,
the variable degree of correlation between price movements of instruments and
price movements in the position being hedged create the possibility that
losses on the position may be greater than gains in the value of the Trust's
position. The same is true for such instruments entered into for income or
gain. In addition, certain instruments and markets may not be liquid in all
circumstances. As a result, in volatile markets, the Trust may not be able to
close out a transaction without incurring losses substantially greater than
the initial deposit. Although the contemplated use of these instruments
predominantly for risk management should tend to minimize the risk of loss due
to a decline in the value of the position, at the same time they tend to limit
any potential gain which might result from an increase in the value of such
position. The ability of the Trust to successfully utilize Strategic
Transactions will depend on the Advisor's and the Sub-Advisor's ability to
predict pertinent market movements and sufficient correlations, which cannot
be assured. Finally, the daily deposit requirements in futures contracts that
the Trust has sold create an on going greater potential financial risk than do
options transactions, where the exposure is limited to the cost of the initial
premium. Losses due to the use of Strategic Transactions will reduce net asset
value.

Regulatory Considerations. The Trust has claimed an exclusion from the term
"commodity pool operator" under the Commodity Exchange Act and, therefore, is
not subject to registration or regulation as a commodity pool operator under
the Commodity Exchange Act.



<PAGE>
                                  APPENDIX B

                            PROXY VOTING PROCEDURES



<PAGE>


                              PROXY VOTING POLICY

                                      For

                           BlackRock Advisors, Inc.
               and Its Affiliated Registered Investment Advisors

Introduction

This Proxy Voting Policy ("Policy") for BlackRock Advisors, Inc. and its
affiliated registered investment advisors ("BlackRock") reflects our duty as a
fiduciary under the Investment Advisers Act of 1940 (the "Advisers Act") to
vote proxies in the best interests of our clients. In addition, the Department
of Labor views the fiduciary act of managing ERISA plan assets to include the
voting of proxies. Proxy voting decisions must be made solely in the best
interests of the pension plan's participants and beneficiaries. The Department
of Labor has interpreted this requirement as prohibiting a fiduciary from
subordinating the retirement income interests of participants and
beneficiaries to unrelated objectives. The guidelines in this Policy have been
formulated to ensure decision-making consistent with these fiduciary
responsibilities.

Any general or specific proxy voting guidelines provided by an advisory client
or its designated agent in writing will supercede the specific guidelines in
this Policy. BlackRock will disclose to our advisory clients information about
this Policy as well as disclose to our clients how they may obtain information
on how we voted their proxies. Additionally, BlackRock will maintain proxy
voting records for our advisory clients consistent with the Advisers Act. For
those of our clients that are registered investment companies, BlackRock will
disclose this Policy to the shareholders of such funds and make filings with
the Securities and Exchange Commission and make available to fund shareholders
the specific proxy votes that we cast in shareholder meetings of issuers of
portfolio securities in accordance with the rules and regulations under the
Investment Company Act of 1940.

Registered investment companies that are advised by BlackRock as well as
certain of our advisory clients may participate in securities lending
programs, which may reduce or eliminate the amount of shares eligible for
voting by BlackRock in accordance with this Policy if such shares are out on
loan and cannot be recalled in time for the vote.

Implicit in the initial decision to retain or invest in the security of a
corporation is approval of its existing corporate ownership structure, its
management, and its operations. Accordingly, proxy proposals that would change
the existing status of a corporation will be reviewed carefully and supported
only when it seems clear that the proposed changes are likely to benefit the
corporation and its shareholders. Notwithstanding this favorable
predisposition, management will be assessed on an ongoing basis both in terms
of its business capability and its dedication to the shareholders to ensure
that our continued confidence remains warranted. If it is determined that
management is acting on its own behalf instead of for the well being of the
corporation, we will vote to support shareholder proposals, unless other
mitigating circumstances are present.

Additionally, situations may arise that involve an actual or perceived
conflict of interest. For example, we may manage assets of a pension plan of a
company whose management is soliciting proxies, or a BlackRock employee
involved with managing an account may have a close relative who serves as a
director or executive of a company that is soliciting proxies regarding
securities held in such account. In all cases, the manner in which we vote
proxies must be based on our clients' best interests and not the product of a
conflict.

This Policy and its attendant recommendations attempt to generalize a complex
subject. It should be clearly understood that specific fact situations,
including differing voting practices in jurisdictions outside the United
States, might warrant departure from these guidelines. In such instances, the
relevant facts will be considered, and if a vote contrary to these guidelines
is indicated it will be cast and the reasons therefor recorded in writing.

Section I of the Policy describes proxy proposals that may be characterized as
routine and lists examples of the types of proposals we would typically
support. Section II of the Policy describes various types of non-routine
proposals and provides general voting guidelines. These non-routine proposals
are categorized as those involving:

         A. Social Issues,

B.       Financial/Corporate Issues, and

C.       Shareholder Rights.

Finally, Section III of the Policy describes the procedures to be followed in
casting a vote pursuant to these guidelines.

<PAGE>

                                   SECTION I

                                ROUTINE MATTERS

Routine proxy proposals, amendments, or resolutions are typically proposed by
management and meet the following criteria:

         1. They do not measurably change the structure, management control, or
operation of the corporation.

         2. They are consistent with industry standards as well as the
corporate laws of the state of incorporation.

                             Voting Recommendation

BlackRock will normally support the following routine proposals:

         1. To increase authorized common shares.

         2. To increase authorized preferred shares as long as there are not
disproportionate voting rights per preferred share.

         3. To elect or re-elect directors.

         4. To appoint or elect auditors.

         5. To approve indemnification of directors and limitation of
directors' liability.

         6. To establish compensation levels.

         7. To establish employee stock purchase or ownership plans.

         8. To set time and location of annual meeting.

<PAGE>

                                  SECTION II

                             NON-ROUTINE PROPOSALS

         D. Social Issues

Proposals in this category involve issues of social conscience. They are
typically proposed by shareholders who believe that the corporation's
internally adopted policies are ill-advised or misguided.

                             Voting Recommendation

If we have determined that management is generally socially responsible, we
will generally vote against the following shareholder proposals:

         1. To enforce restrictive energy policies.

         2. To place arbitrary restrictions on military contracting.

         3. To bar or place arbitrary restrictions on trade with other
countries.

         4. To restrict the marketing of controversial products.

         5. To limit corporate political activities.

         6. To bar or restrict charitable contributions.

         7. To enforce a general policy regarding human rights based on
arbitrary parameters.

         8. To enforce a general policy regarding employment practices based on
arbitrary parameters.

         9. To enforce a general policy regarding animal rights based on
arbitrary parameters.

         10. To place arbitrary restrictions on environmental practices.

         E. Financial/Corporate Issues

Proposals in this category are usually offered by management and seek to
change a corporation's legal, business or financial structure.

                             Voting Recommendation

We will generally vote in favor of the following management proposals provided
the position of current shareholders is preserved or enhanced:

         1. To change the state of incorporation.

         2. To approve mergers, acquisitions or dissolution.

         3. To institute indenture changes.

         4. To change capitalization.

         F. Shareholder Rights

Proposals in this category are made regularly both by management and
shareholders. They can be generalized as involving issues that transfer or
realign board or shareholder voting power.

We typically would oppose any proposal aimed solely at thwarting potential
takeover offers by requiring, for example, super-majority approval. At the
same time, we believe stability and continuity promote profitability. The
guidelines in this area seek to find a middle road, and they are no more than
guidelines. Individual proposals may have to be carefully assessed in the
context of their particular circumstances.

                             Voting Recommendation

We will generally vote for the following management proposals:

         1. To require majority approval of shareholders in acquisitions of a
controlling share in the corporation.

         2. To institute staggered board of directors.

         3. To require shareholder approval of not more than 662/3% for a
proposed amendment to the corporation's by-laws.

         4. To eliminate cumulative voting.

         5. To adopt anti-greenmail charter or by-law amendments or to
otherwise restrict a company's ability to make greenmail payments.

         6. To create a dividend reinvestment program.

         7. To eliminate preemptive rights.

         8. To eliminate any other plan or procedure designed primarily to
discourage a takeover or other similar action (commonly known as a "poison
pill").

We will generally vote against the following management proposals:

         9. To require greater than 662/3% shareholder approval for a proposed
amendment to the corporation's by-laws ("super-majority provisions").

         10. To require that an arbitrary fair price be offered to all
shareholders that is derived from a fixed formula ("fair price amendments").

         11. To authorize a new class of common stock or preferred stock which
may have more votes per share than the existing common stock.

         12. To prohibit replacement of existing members of the board of
directors.

         13. To eliminate shareholder action by written consent without a
shareholder meeting.

         14. To allow only the board of directors to call a shareholder meeting
or to propose amendments to the articles of incorporation.

         15. To implement any other action or procedure designed primarily to
discourage a takeover or other similar action (commonly known as a "poison
pill").

         16. To limit the ability of shareholders to nominate directors.

We will generally vote for the following shareholder proposals:

         17. To rescind share purchases rights or require that they be
submitted for shareholder approval, but only if the vote required for approval
is not more than 662/3%.

         18. To opt out of state anti-takeover laws deemed to be detrimental to
the shareholder.

         19. To change the state of incorporation for companies operating under
the umbrella of anti-shareholder state corporation laws if another state is
chosen with favorable laws in this and other areas.

         20. To eliminate any other plan or procedure designed primarily to
discourage a takeover or other similar action.

         21. To permit shareholders to participate in formulating management's
proxy and the opportunity to discuss and evaluate management's director
nominees, and/or to nominate shareholder nominees to the board.

         22. To require that the board's audit, compensation, and/or nominating
committees be comprised exclusively of independent directors.

         23. To adopt anti-greenmail charter or by-law amendments or otherwise
restrict a company's ability to make greenmail payments.

         24. To create a dividend reinvestment program.

         25. To recommend that votes to "abstain" not be considered votes
"cast" at an annual meeting or special meeting, unless required by state law.

         26. To require that "golden parachutes" be submitted for shareholder
ratification.

We will generally vote against the following shareholder proposals:

         27. To restore preemptive rights.

         28. To restore cumulative voting.

         29. To require annual election of directors or to specify tenure.

         30. To eliminate a staggered board of directors.

         31. To require confidential voting.

         32. To require directors to own a minimum amount of company stock in
order to qualify as a director or to remain on the board.

         33. To dock director pay for failing to attend board meetings.

<PAGE>


                                  SECTION III

                                VOTING PROCESS

         BlackRock has engaged a third-party service provider to assist us in
the voting of proxies. These guidelines have been provided to this service
provider, who then analyzes all proxy solicitations we receive for our clients
and makes recommendations to us as to how, based upon our guidelines, the
relevant votes should be cast. These recommendations are set out in a report
that is provided to the relevant Portfolio Management Group team, who must
approve the proxy vote in writing and return such written approval to the
Operations Group. If any authorized member of a Portfolio Management Group team
desires to vote in a manner that differs from the recommendations, the reason
for such differing vote shall be noted in the written approval form. A copy of
the written approval form is attached as an exhibit. The head of each relevant
Portfolio Management Group team is responsible for making sure that proxies are
voted in a timely manner. The Brokerage Allocation Committee shall receive
regular reports of all p IF THERE IS ANY POSSIBILITY THAT THE VOTE MAY INVOLVE
A MATERIAL CONFLICT OF INTEREST BECAUSE, FOR EXAMPLE, THE ISSUER SOLICITING THE
VOTE IS A BLACKROCK CLIENT OR THE MATTER BEING VOTED ON INVOLVES BLACKROCK, PNC
OR ANY AFFILIATE (INCLUDING A PORTFOLIO MANAGEMENT GROUP EMPLOYEE) OF EITHER OF
THEM, PRIOR TO APPROVING SUCH VOTE, THE BROKERAGE ALLOCATION COMMITTEE MUST BE
CONSULTED AND THE MATTER DISCUSSED. The Committee, in consultation with the
Legal and Compliance Department, shall determine whether the potential conflict
is material and if so, the appropriate method to resolve such conflict, based
on the particular facts and circumstances, the importance of the proxy issue,
whether the Portfolio Management Group team is proposing a vote that differs
from recommendations made by our third-party service provider with respect to
the issue and the nature of the conflict, so as to ensure that the voting of
the proxy is not affected by the potential conflict. If the conflict is
determined not to be material With respect to votes in connection with
securities held on a particular record date but sold from a client account
prior to the holding of the related meeting, BlackRock may take no action on
proposals to be voted on in such meeting. With respect to voting proxies of
non-U.S. companies, a number of logistical problems may arise that may have a
detrimental effect on BlackRock's ability to vote such proxies in the best
interests of our clients. These problems include, but are not limited to, (i)
untimely and/or inadequate notice of shareholder meetings, (ii) restrictions on
the ability of holders outside the issuer's jurisdiction of organization to
exercise votes, (iii) requirements to vote proxies in person, if not
practicable, (iv) the imposition of restrictions on the sale of the securities
for a period of time in proximity to the shareholder meeting, and (v)
impracticable or inappropriate requirements to provide local agents with power
of attorney to facilitate the voting instructions. Accordingly, BlackRock may
determine not to vote proxies if it believes that the restrictions or other
detriments associated with such vote outweigh the benefits that will be derived
by voting on the company's proposal.

                                   * * * * *

         Any questions regarding this Policy may be directed to the General
Counsel of BlackRock.

Approved: October 21, 1998

Revised: May 27, 2003

<PAGE>

                                    PART C

                               Other Information

Item 24.  Financial Statements And Exhibits

Financial Statements

Part A--None.

Part B--Statement of Assets and Liabilities(1)

Exhibits

(a) Amended and Restated Agreement and Declaration of Trust(2)

(b) Amended and Restated By-Laws(2)

(c) Inapplicable

(d) Form of Specimen Certificate(1)

(e) Dividend Reinvestment Plan(1)

(f) Inapplicable

(g) (1)Investment Management Agreement(1)

(g) (2)Sub-Investment Advisory Agreement(1)

(h) Form of Underwriting Agreement(1)

(i) Form of the BlackRock Closed-End Trusts Amended and Restated Deferred
Compensation Plan(1)

(j) (1)Custody Agreement(1)

(j) (2)Form of Foreign Custody Manager Agreement(1)

(k) (1)Form of Stock Transfer Agency Agreement(1)

(l) Opinion and Consent of Counsel to the Trust(1)

(m) Inapplicable.

(n) Independent Auditor's Consent(1)

(o) Inapplicable.

(p) Initial Subscription Agreement(1)

(q) Inapplicable.

(r) (1)Code of Ethics of Trust(1)

(r) (2) Code of Ethics of the Advisor and Sub-Advisor(1)

(r) (3) Code of Ethics of The PNC Financial Services Group(1)

(s) Power of Attorney(1)

___________

(1) To be filed by Amendment.

(2) Filed herewith.


Item 25.  Marketing Arrangements

         Reference is made to the Form of Underwriting Agreement for the
Registrant's shares of beneficial interest to be filed by amendment to this
registration statement.

Item 26.  Other Expenses Of Issuance And Distribution

         The following table sets forth the estimated expenses to be incurred
in connection with the offering described in this registration statement:

              Registration fee
              NYSE listing fee
              Printing (other than certificates)
              Engraving and printing certificates
              Accounting fees and expenses
              Legal fees and expenses
              NASD fee
                        Total


Item 27.  Persons Controlled By Or Under Common Control With The Registrant

         None.


Item 28.  Number Of Holders Of Shares

         As of May 27, 2004

                 Title Of Class                    Number of Record Holders
                 --------------                    ------------------------
           Shares of Beneficial Interest                    0


Item 29.  Indemnification

         Article V of the Registrant's Agreement and Declaration of Trust
provides as follows:

5.1 No Personal Liability of Shareholders, Trustees, etc. No Shareholder of
the Trust shall be subject in such capacity to any personal liability
whatsoever to any Person in connection with Trust Property or the acts,
obligations or affairs of the Trust. Shareholders shall have the same
limitation of personal liability as is extended to stockholders of a private
corporation for profit incorporated under the Delaware General Corporation
Law. No Trustee or officer of the Trust shall be subject in such capacity to
any personal liability whatsoever to any Person, save only liability to the
Trust or its Shareholders arising from bad faith, willful misfeasance, gross
negligence or reckless disregard for his duty to such Person; and, subject to
the foregoing exception, all such Persons shall look solely to the Trust
Property for satisfaction of claims of any nature arising in connection with
the affairs of the Trust. If any Shareholder, Trustee or officer, as such, of
the Trust, is made a party to any suit or proceeding to enforce any such
liability, subject to the foregoing exception, he shall not, on account
thereof, be held to any personal liability. Any repeal or modification of this
Section 5.1 shall not adversely affect any right or protection of a Trustee or
officer of the Trust existing at the time of such repeal or modification with
respect to acts or omissions occurring prior to such repeal or modification.

5.2 Mandatory Indemnification. (a) The Trust hereby agrees to indemnify each
person who at any time serves as a Trustee or officer of the Trust (each such
person being an "indemnitee") against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and reasonable counsel fees reasonably incurred by such indemnitee
in connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
investigative body in which he may be or may have been involved as a party or
otherwise or with which he may be or may have been threatened, while acting in
any capacity set forth in this Article V by reason of his having acted in any
such capacity, except with respect to any matter as to which he shall not have
acted in good faith in the reasonable belief that his action was in the best
interest of the Trust or, in the case of any criminal proceeding, as to which
he shall have had reasonable cause to believe that the conduct was unlawful,
provided, however, that no indemnitee shall be indemnified hereunder against
any liability to any person or any expense of such indemnitee arising by
reason of (i) willful misfeasance, (ii) bad faith, (iii) gross negligence, or
(iv) reckless disregard of the duties involved in the conduct of his position
(the conduct referred to in such clauses (i) through (iv) being sometimes
referred to herein as "disabling conduct"). Notwithstanding the foregoing,
with respect to any action, suit or other proceeding voluntarily prosecuted by
any indemnitee as plaintiff, indemnification shall be mandatory only if the
prosecution of such action, suit or other proceeding by such indemnitee (1)
was authorized by a majority of the Trustees or (2) was instituted by the
indemnitee to enforce his or her rights to indemnification hereunder in a case
in which the indemnitee is found to be entitled to such indemnification. The
rights to indemnification set forth in this Declaration shall continue as to a
person who has ceased to be a Trustee or officer of the Trust and shall inure
to the benefit of his or her heirs, executors and personal and legal
representatives. No amendment or restatement of this Declaration or repeal of
any of its provisions shall limit or eliminate any of the benefits provided to
any person who at any time is or was a Trustee or officer of the Trust or
otherwise entitled to indemnification hereunder in respect of any act or
omission that occurred prior to such amendment, restatement or repeal.

(b) Notwithstanding the foregoing, no indemnification shall be made hereunder
unless there has been a determination (i) by a final decision on the merits by
a court or other body of competent jurisdiction before whom the issue of
entitlement to indemnification hereunder was brought that such indemnitee is
entitled to indemnification hereunder or, (ii) in the absence of such a
decision, by (1) a majority vote of a quorum of those Trustees who are neither
"interested persons" of the Trust (as defined in Section 2(a)(19) of the
Investment Company Act) nor parties to the proceeding ("Disinterested
Non-Party Trustees"), that the indemnitee is entitled to indemnification
hereunder, or (2) if such quorum is not obtainable or even if obtainable, if
such majority so directs, independent legal counsel in a written opinion
concludes that the indemnitee should be entitled to indemnification hereunder.
All determinations to make advance payments in connection with the expense of
defending any proceeding shall be authorized and made in accordance with the
immediately succeeding paragraph (c) below.

(c) The Trust shall make advance payments in connection with the expenses of
defending any action with respect to which indemnification might be sought
hereunder if the Trust receives a written affirmation by the indemnitee of the
indemnitee's good faith belief that the standards of conduct necessary for
indemnification have been met and a written undertaking to reimburse the Trust
unless it is subsequently determined that the indemnitee is entitled to such
indemnification and if a majority of the Trustees determine that the
applicable standards of conduct necessary for indemnification appear to have
been met. In addition, at least one of the following conditions must be met:
(i) the indemnitee shall provide adequate security for his undertaking, (ii)
the Trust shall be insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of the Disinterested Non-Party
Trustees, or if a majority vote of such quorum so direct, independent legal
counsel in a written opinion, shall conclude, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is
substantial reason to believe that the indemnitee ultimately will be found
entitled to indemnification.

(d) The rights accruing to any indemnitee under these provisions shall not
exclude any other right which any person may have or hereafter acquire under
this Declaration, the By-Laws of the Trust, any statute, agreement, vote of
stockholders or Trustees who are "disinterested persons" (as defined in
Section 2(a)(19) of the Investment Company Act) or any other right to which he
or she may be lawfully entitled.

(e) Subject to any limitations provided by the Investment Company Act and this
Declaration, the Trust shall have the power and authority to indemnify and
provide for the advance payment of expenses to employees, agents and other
Persons providing services to the Trust or serving in any capacity at the
request of the Trust to the full extent corporations organized under the
Delaware General Corporation Law may indemnify or provide for the advance
payment of expenses for such Persons, provided that such indemnification has
been approved by a majority of the Trustees.

5.3 No Bond Required of Trustees. No Trustee shall, as such, be obligated to
give any bond or other security for the performance of any of his duties
hereunder.

5.4 No Duty of Investigation; Notice in Trust Instruments, etc. No purchaser,
lender, transfer agent or other person dealing with the Trustees or with any
officer, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the
Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, undertaking, instrument, certificate, Share, other security of the
Trust, and every other act or thing whatsoever executed in connection with the
Trust shall be conclusively taken to have been executed or done by the
executors thereof only in their capacity as Trustees under this Declaration or
in their capacity as officers, employees or agents of the Trust. The Trustees
may maintain insurance for the protection of the Trust Property, its
Shareholders, Trustees, officers, employees and agents in such amount as the
Trustees shall deem adequate to cover possible tort liability, and such other
insurance as the Trustees in their sole judgment shall deem advisable or is
required by the Investment Company Act.

5.5 Reliance on Experts, etc. Each Trustee and officer or employee of the
Trust shall, in the performance of its duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the Trust by any of
the Trust's officers or employees or by any advisor, administrator, manager,
distributor, selected dealer, accountant, appraiser or other expert or
consultant selected with reasonable care by the Trustees, officers or
employees of the Trust, regardless of whether such counsel or expert may also
be a Trustee.

Insofar as indemnification for liabilities arising under the Act, may be
terminated to Trustees, officers and controlling persons of the Trust,
pursuant to the foregoing provisions or otherwise, the Trust has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Reference is made to Article __ of the underwriting agreement attached as
Exhibit (h), which is incorporated herein by reference.


Item 30.  Business And Other Connections Of Investment Advisor

         Not Applicable


Item 31.  Location Of Accounts And Records

         The Registrant's accounts, books and other documents are currently
located at the offices of the Registrant, c/o BlackRock Advisors, Inc., 100
Bellevue Parkway, Wilmington, Delaware 19809 and at the offices of, the
Registrant's Custodian and Transfer Agent.


Item 32.  Management Services

         Not Applicable


Item 33.  Undertakings

(1) The Registrant hereby undertakes to suspend the offering of its units
until it amends its prospectus if (a) subsequent to the effective date of its
registration statement, the net asset value declines more than 10 percent from
its net asset value as of the effective date of the Registration Statement or
(b) the net asset value increases to an amount greater than its net proceeds
as stated in the prospectus.

(2) Not applicable

(3) Not applicable

(4) Not applicable

(5) (a) For the purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
a registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant under Rule 497 (h) under the Securities
Act of 1933 shall be deemed to be part of the Registration Statement as of the
time it was declared effective.

(b) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering thereof.

(6) The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery within two business days of receipt
of a written or oral request, any Statement of Additional Information.



<PAGE>

                                  SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State of New York, on the 27th day of
May 2004.


                             /s/ Anne F. Ackerley
                             ------------------------------------------------
                             Anne F. Ackerley
                             Sole Initial Trustee, President, Chief Executive
                             Officer and Principal Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities set forth
below on the 27th day of May 2004.

NAME                               TITLE


/s/ Anne F. Ackerley
---------------------------
Anne F. Ackerley                   Sole Initial Trustee, President,
                                   Chief Executive Officer and
                                   Principal Financial Officer

<PAGE>


INDEX TO EXHIBITS

(a) Amended and Restated Agreement and Declaration of Trust
(b) Amended and Restated By-Laws



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</DOCUMENT>
