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<SEC-DOCUMENT>0000900092-09-000371.txt : 20090701
<SEC-HEADER>0000900092-09-000371.hdr.sgml : 20090701
<ACCEPTANCE-DATETIME>20090701145013
ACCESSION NUMBER:		0000900092-09-000371
CONFORMED SUBMISSION TYPE:	N-CSRS
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20090430
FILED AS OF DATE:		20090701
DATE AS OF CHANGE:		20090701
EFFECTIVENESS DATE:		20090701

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BLACKROCK FLOATING RATE INCOME TRUST
		CENTRAL INDEX KEY:			0001287480
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		N-CSRS
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21566
		FILM NUMBER:		09922059

	BUSINESS ADDRESS:	
		STREET 1:		40 EAST 52ND STREET
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022
		BUSINESS PHONE:		212-754-5336

	MAIL ADDRESS:	
		STREET 1:		40 EAST 52ND STREET
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BLACKROCK GLOBAL FLOATING RATE INCOME TRUST
		DATE OF NAME CHANGE:	20040528

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BLACKROCK VARIABLE RATE & INFLATION PROTECTED SECURITIES
		DATE OF NAME CHANGE:	20040416
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSRS
<SEQUENCE>1
<FILENAME>bgtfinal.htm
<DESCRIPTION>BR FLOATING RATE INCOME TRUST
<TEXT>

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<P align="center">
<FONT face="ArialMT,Arial,Helvetica,sans-serif">UNITEDSTATES</FONT><BR>
<FONT face="ArialMT,Arial,Helvetica,sans-serif">SECURITIESANDEXCHANGECOMMISSION</FONT><BR>
<FONT face="ArialMT,Arial,Helvetica,sans-serif">Washington,D.C.20549</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FORM N-CSRS</FONT></B><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">INVESTMENT COMPANIES</FONT></B></P>
<P align="left">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investment Company Act file number 811-21566</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Name of Fund: BlackRock Floating Rate Income Trust (BGT)</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Floating Rate Income Trust, 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">address: P.O. Box 9011, Princeton, NJ, 08543-9011</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Registrant&#146;s telephone number, including area code: (800) 882-0052, Option 4</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date of fiscal year end: 10/31/2009</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date of reporting period: 04/30/2009</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 1 &#150; Report to Stockholders</FONT></P>

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<P align=left><FONT size=1 face=DIN-Light,Arial,Helvetica,sans-serif>EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS</FONT><BR>
<BR>
<FONT size=5 face=DIN-Regular,Arial,Helvetica,sans-serif>Semi-Annual Report</FONT><BR>
<BR>
<FONT face=DIN-Regular,Arial,Helvetica,sans-serif>APRIL 30, 2009 | (UNAUDITED)</FONT></P>
<P align=left><FONT color=#0035c4 size=4 face=DIN-Regular,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade 2009 Term Trust Inc. (BCT)</FONT><BR>
<BR>
<FONT color=#0035c4 size=4 face=DIN-Regular,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc. (CII)</FONT><BR>
<BR>
<FONT color=#0035c4 size=4 face=DIN-Regular,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT><BR>
<BR>
<FONT color=#0035c4 size=4 face=DIN-Regular,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate Income Strategies Fund, Inc. (PSW)</FONT><BR>
<BR>
<FONT color=#0035c4 size=4 face=DIN-Regular,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (BTZ)</FONT><BR>
<BR>
<FONT color=#0035c4 size=4 face=DIN-Regular,Arial,Helvetica,sans-serif>BlackRock Preferred Income Strategies Fund, Inc. (PSY)</FONT><BR>
<BR>
<FONT color=#0035c4 size=4 face=DIN-Regular,Arial,Helvetica,sans-serif>BlackRock Preferred Opportunity Trust (BPP)</FONT></P>
<IMG border=0 src="brcetaxable7sar0409x1x1.jpg">
<BR>
<P align=left><FONT size=1 face=DIN-Light,Arial,Helvetica,sans-serif>NOT FDIC INSURED</FONT><BR>
<BR>
<FONT size=1 face=DIN-Light,Arial,Helvetica,sans-serif>MAY LOSE VALUE</FONT><BR>
<BR>
<FONT size=1 face=DIN-Light,Arial,Helvetica,sans-serif>NO BANK GUARANTEE</FONT></P>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Table of Contents</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=right><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Page</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dear Shareholder</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Semi-Annual Report:</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund Summaries</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Benefits and Risks of Leveraging</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Derivative Instruments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Statements:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Schedules of Investments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Statements of Assets and Liabilities</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Statements of Operations</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Statements of Changes in Net Assets</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Statements of Cash Flows</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Highlights</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>46</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Notes to Financial Statements</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>53</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Officers and Directors/Trustees</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>63</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Additional Information</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>65</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Section 19 Disclosure</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc. (CII) and BlackRock</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity Advantage Trust (BTZ) (each a &#147;Fund&#148; and collectively,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the &#147;Funds&#148;), acting pursuant to a Securities and Exchange Commission</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(&#147;SEC&#148;) exemptive order and with the approval of each Fund&#146;s Board of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Directors/Trustees (the &#147;Board&#148;), each have adopted a level distribution</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>plan (the &#147;Plan&#148;) that is consistent with its investment objectives and poli-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cies. In adopting the Plan, each Fund employs either a managed distribution</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or option over-write policy to support a level distribution of income, capital</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>gains and/or return of capital. In accordance with the Plans, the Funds cur-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rently distribute the following fixed amounts per share:</FONT></P>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount Per</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Distribution</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Exchange Symbol</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Share</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Frequency</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CII</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.485</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Quarterly</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BTZ</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Monthly</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The fixed amounts distributed per share are subject to change at the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>discretion of each Fund&#146;s Board. Under its Plan, each Fund will distribute all</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>available investment income to its shareholders, consistent with its primary</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment objectives and as required by the Internal Revenue Code of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1986, as amended (the &#147;Code&#148;). If sufficient investment income is not</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>available on a monthly/quarterly basis, the Funds will distribute long-term</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>capital gains and/or return of capital to shareholders in order to maintain</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>a level distribution. Each monthly/quarterly distribution to shareholders is</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expected to be at the fixed amount established by the Board, except for</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>extraordinary distributions and potential distribution rate increases or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>decreases to enable the Funds to comply with the distribution requirements</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>imposed by the Code.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shareholders should not draw any conclusions about the Fund&#146;s investment</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>performance from the amount of these distributions or from the terms of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Plan. Each Fund&#146;s total return performance on net asset value is presented</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>in its financial highlights table.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Board may amend, suspend or terminate a Fund&#146;s Plan without prior</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>notice if it deems such actions to be in the best interests of the Fund or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>its shareholders. The suspension or termination of the Plan could have</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the effect of creating a trading discount (if the Fund&#146;s stock is trading at or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>above net asset value) or widening an existing trading discount. The Funds</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are subject to risks that could have an adverse impact on their ability to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>maintain a level distribution. Examples of potential risks include, but are not</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>limited to, economic downturns impacting the markets, decreased market</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>volatility, companies suspending or decreasing corporate dividend distribu-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tions and changes in the Code. Please refer to each Fund&#146;s prospectus for a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>more complete description of its risks.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Please refer to Additional Information for a cumulative summary of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Section 19(a) notices for each Fund&#146;s current fiscal period. Section 19(a)</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>notices for the Funds, as applicable, are available on the BlackRock website</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>www.blackrock.com.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>2 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Dear Shareholder</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The past 12 months reveal a tale of two markets &#151; one of investor pessimism and decided weakness, and another of optimism and some early signs of</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>recovery. The majority of the past year was characterized by the former as the global financial crisis erupted into the worst recession in decades. Economic</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>data were uniformly poor and daily headlines recounted the downfalls of storied financial firms, volatile swings in global financial markets, and monumental</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>government actions that included widespread (and globally coordinated) monetary and quantitative easing by central banks and large-scale fiscal stimuli.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sentiment improved noticeably in March 2009, however, on the back of new program announcements by the Treasury and Federal Reserve Board, as well</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>as signs of improved economic performance, such as in retail sales, consumer confidence and select areas of the housing market.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Against this backdrop, US equities contended with unprecedented levels of volatility, posting steep declines early, and then pared some of those losses in</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>March and April. The experience in international markets was similar to that in the United States, though there was a marked divergence in regional perform-</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ance. Notably, emerging economies, which lagged most developed regions through the downturn, were among the market leaders during the late-period rally.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>In fixed income markets, while risk aversion remained a dominant theme overall, relatively attractive yields and distressed valuations, alongside a more</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>favorable macro environment, eventually captured investor attention, leading to a modest recovery in non-Treasury assets. A notable example from the</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>opposite end of the credit spectrum was the high yield sector, which generally outperformed in the first four months of 2009 after extraordinary challenges</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and severe underperformance last year. At the same time, the new year ushered in a return to normalcy for the tax-exempt market, which had registered one</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of its worst years on record in 2008.</FONT></P>
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     <TD width="11%"></TD></TR>
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     <TD colSpan=2 align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>All told, the major benchmark indexes posted mixed results for the current reporting period, reflective of a bifurcated market.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Returns as of April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>6-month</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>12-month</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>US equities (S&amp;P 500 Index)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(8.53)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(35.31)%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Small cap US equities (Russell 2000 Index)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(8.40)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(30.74)</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International equities (MSCI Europe, Australasia, Far East Index)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.64)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(42.76)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>US Treasury securities (Merrill Lynch 10-Year US Treasury Index)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.98</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.30</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Taxable fixed income (Barclays Capital US Aggregate Bond Index)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.74</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.84</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax-exempt fixed income (Barclays Capital Municipal Bond Index)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.20</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.11</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>High yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16.39</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12.55)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>On June 16, 2009, BlackRock, Inc. announced that it received written notice from Barclays PLC (&#147;Barclays&#148;) in which Barclays&#146; Board of Directors had</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>accepted BlackRock&#146;s offer to acquire Barclays Global Investors (&#147;BGI&#148;). Barclays also notified BlackRock that its Board will recommend the transaction to</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays&#146; shareholders for approval at a special meeting to be held in early August 2009. The combination of BlackRock and BGI will bring together market</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>leaders in active and index strategies to create the preeminent asset management firm. The transaction is expected to close in the fourth quarter 2009</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>following approval by Barclays&#146; shareholders, the receipt of client consents and regulatory approvals, and satisfaction of customary closing conditions.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Through periods of market turbulence, as ever, BlackRock&#146;s full resources are dedicated to the management of our clients&#146; assets. We thank you for entrusting</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock with your investments and look forward to continuing to serve you in the months and years ahead.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sincerely,</FONT></P>
<IMG border=0 src="brcetaxable7sar0409x3x1.jpg">
<BR>
<P align=left><FONT color=#4d4d4d size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>THIS PAGE NOT PART OF YOUR FUND REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>3</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Fund Summary </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>as of April 30, 2009 </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade 2009 Term Trust Inc.</FONT></B></P>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Objective</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade 2009 Term Trust Inc. (BCT) (the &#147;Fund&#148;) </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seeks to manage a portfolio of fixed income securities that will return $15 per</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>share (the initial public offering price per share) to investors on or about December 31, 2009 while providing high monthly income. No assurance can be</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>given that the Fund&#146;s investment objective will be achieved. As discussed in the performance commentary below, it is expected the Fund will return less than</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$15 per share. See Note 1 of the Notes to Financial Statements (&#147;Organization and Significant Accounting Policies&#148;).</FONT><BR>
<BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Performance</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, the Fund returned (10.48)% based on market price and (9.84)% based on net asset value (NAV). For the same</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>period, the closed-end Lipper US Mortgage Funds category posted an average return of (1.09)% on a market price basis and (1.40)% on a NAV basis. All</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>returns reflect reinvestment of dividends. The Fund&#146;s discount to NAV, which widened during the period, accounts for the difference between performance</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>based on price and performance based on NAV. On June 3, 2009, the investment advisor and the Board of Trustees (the &#147;Board&#148;) of the Fund announced</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that the Fund will make its final liquidating distribution on or about October 30, 2009, instead of December 31, 2009. Based on the Fund&#146;s net assets,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>prolonged adverse market conditions and investment opportunities currently available to the Fund, BlackRock and the Board believe it is in the investors&#146;</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>best interest to liquidate the Fund in advance of its scheduled date. At final liquidation, the Fund&#146;s shareholders will receive the net asset value of the Fund</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at that time in one or more liquidating distributions, which is expected to be less than the Fund&#146;s initial offering price. The Fund remains focused on its</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December 2009 maturity and is positioned accordingly. During the six months, we maintained the Fund&#146;s allocation to agency debt and corporate debt,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>as well as to mortgage-backed securities (MBS). The exposure to MBS detracted from performance, while the allocation to corporates was beneficial. The</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund maintained moderate levels of cash during the period, which did not signifcantly impact performance.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>views are not intended to be a forecast of future events and are no guarantee of future results.</FONT></P>
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     <TD width="9%"></TD>
     <TD width="7%"></TD>
     <TD width="7%"></TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Symbol on American Stock Exchange</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BCT</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Offering Date</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; June 17, 1993</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=3 align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on Closing Market Price as of April 30, 2009 ($11.19)</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.00%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Monthly Distribution per share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.00</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Annualized Distribution per share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.00</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Leverage as of April 30, 2009</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=6 align=left>&nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Past performance does not guarantee future results.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=6 align=left>&nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Effective November 2008, the Fund has discontinued its monthly distribution in an effort to meet its termination target of $15.00.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=7 align=left>&nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Fund (including any assets</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=7 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>attributable to any borrowing that may be outstanding) minus the sum of accrued liabilities (other than debt representing financial leverage).</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=6 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For a discussion of leveraging techniques utilized by the Fund, please see the Benefits and Risks of Leveraging on page 11.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The table below summarizes the changes in the Fund&#146;s market price and net asset value per share:</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Change</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market Price</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$11.19</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$12.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10.48)%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$13.05</FONT>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10.95</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net Asset Value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$11.54</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$12.80</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9.84)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$12.80</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$11.29</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=4 align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following chart shows the portfolio composition of the Fund&#146;s total investments:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Portfolio Composition</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S. Government Sponsored Agency</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Obligations</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>71%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>66%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Non-U.S. Government Sponsored</FONT>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Agency Mortgage-Backed</FONT>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Securities</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S. Government Sponsored Agency</FONT>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mortgage-Backed Securities &#151;</FONT>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Collateralized Mortgage</FONT>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Obligations</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Taxable Municipal Bonds</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S. Government Sponsored Agency</FONT>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mortgage-Backed Securities</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>4 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Fund Summary </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>as of April 30, 2009 </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc.</FONT></B></P>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Objective</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc. (CII) (the &#147;Fund&#148;) </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seeks to provide investors with a combination of current income and capital</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>appreciation. The Fund seeks to achieve its investment objective by investing primarily in a diversified portfolio of common stocks in an attempt to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>generate current income and by employing a strategy of writing (selling) call options on equity indexes in an attempt to generate gains from option</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>premiums primarily on the S&amp;P 500 Index. No assurance can be given that the Fund&#146;s investment objective will be achieved.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Board recently approved a change to the Fund&#146;s option writing policy. Please refer to page 65 in the General Information section.</FONT><BR>
<BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Performance</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, the Fund returned 0.05% based on market price and 2.12% based on net asset value (NAV). For the same</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>period, the benchmark S&amp;P 500 Citigroup Value Index returned (14.39)%. All returns reflect reinvestment of dividends. The Fund&#146;s discount to NAV, which</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>widened during the period, accounts for the difference between performance based on price and performance based on NAV. The largest contributor to per-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>formance was the Fund&#146;s underweight exposure to the financials sector, which was a weak performer during the six months. Stock selection in healthcare,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>energy and industrials also was strong. Key individual contributors in healthcare were Schering-Plough Corp. and Wyeth, while BJ Services Co., Exxon Mobil</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corp. and Halliburton Co. led within energy and industrials. The lack of ownership in General Electric Co. and Deere &amp; Co. also was advantageous. The main</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>detractor from performance was stock selection in the consumer discretionary sector. Key laggards included General Mills, Inc. and Kimberly-Clark Corp.,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>which posted weak returns during the period.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>views are not intended to be a forecast of future events and are no guarantee of future results.</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="12%"></TD>
     <TD width="35%"></TD>
     <TD width="8%"></TD>
     <TD width="9%"></TD>
     <TD width="9%"></TD>
     <TD width="7%"></TD>
     <TD width="7%"></TD>
     <TD width="9%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Symbol on New York Stock Exchange</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CII</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Offering Date</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2004</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on Closing Market Price as of April 30, 2009 ($11.38)</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17.05%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Quarterly Distribution per share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.485</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Annualized Distribution per share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1.940</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=6 align=left>&nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Past performance does not guarantee future results.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=left>&nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The distribution is not constant and is subject to change.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The table below summarizes the changes in the Fund&#146;s market price and net asset value per share:</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Change</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market Price</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$11.38</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$12.37</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(8.00)%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$13.13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7.92</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net Asset Value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$12.94</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$13.78</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(6.10)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$14.37</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10.62</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=7 align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following charts show the ten largest holdings and sector allocations as a percent of the Fund&#146;s long-term investments:</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Portfolio Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Percent of</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Percent of</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Long-Term</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Long-Term</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ten Largest Holdings</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Sector Allocations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Exxon Mobil Corp.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4%</FONT>&nbsp;</TD>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Information Technology</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Travelers Cos., Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financials</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Schering-Plough Corp.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Health Care</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase &amp; Co.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Energy</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LSI Corp.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Consumer Staples</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Xerox Corp.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Industrials</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Qwest Communications International Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD colSpan=3 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Telecommunication Services</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kimberly-Clark Corp.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Consumer Discretionary</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bristol-Myers Squibb Co.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Utilities</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Verizon Communications, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Materials</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>5</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Fund Summary </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>as of April 30, 2009 </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust</FONT></B></P>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Objective</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT) (formerly BlackRock Global Floating Rate Income Trust) (the &#147;Fund&#148;) </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seeks to provide a high level of current</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>income and to seek the preservation of capital. The Fund seeks to achieve its objective by investing in a global portfolio of primarily floating and variable</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rate securities. No assurance can be given that the Fund&#146;s investment objective will be achieved.</FONT><BR>
<BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Performance</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, the Fund returned 16.00% based on market price and 5.03% based on net asset value (NAV). For the same</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>period, the closed-end Lipper Loan Participation Funds category posted an average return of 0.24% on a market price basis and (4.14)% on a NAV basis.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>All returns reflect reinvestment of dividends. The Fund&#146;s discount to NAV, which narrowed during the period, accounts for the difference between performance</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>based on price and performance based on NAV. For the first two months of the reporting period, the high yield loan market was under extreme pressure</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and lost 10.90%, as measured by the Barclays Capital High Yield Loan Index. However, this underperformance was followed by a strong first four months of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009, in which the sector gained in excess of 20%. This resulted in positive market performance for the six months as a whole. During this time, the Fund</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>maintained a high level of leverage and focused on higher-quality sectors and structures, which benefited most during the market rally; these were the pri-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>mary contributors to the Fund&#146;s outperformance of its Lipper peers. Conversely, conservative positioning hampered results during the sharp rally in the first</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>four months of 2009.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>views are not intended to be a forecast of future events and are no guarantee of future results.</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="12%"></TD>
     <TD width="58%"></TD>
     <TD width="28%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Symbol on New York Stock Exchange</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BGT</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Offering Date</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>August 30, 2004</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on Closing Market Price as of April 30, 2009 ($9.85)</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12.18%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Monthly Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.10</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Annualized Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1.20</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Leverage as of April 30, 2009</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Past performance does not guarantee future results.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Monthly Distribution per Common Share, declared on June 1, 2009, was decreased to $0.075. The Yield on Closing Market Price, Current</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>distribution rate is not constant and is subject to further change in the future. A portion of the distribution may be deemed a tax return of capital or</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>net realized gain.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Represents loan outstanding and Auction Market Preferred Shares (&#147;Preferred Shares&#148;) as a percentage of total managed assets, which is the total</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>assets of the Fund (including any assets attributable to any borrowing that may be outstanding and Preferred Shares) minus the sum of accrued</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>liabilities (other than debt representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see the Benefits</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Risks of Leveraging on page 11.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The table below summarizes the changes in the Fund&#146;s market price and net asset value per share:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="27%"></TD>
     <TD width="11%"></TD>
     <TD width="10%"></TD>
     <TD width="11%"></TD>
     <TD width="7%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Change</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market Price</FONT>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9.85</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9.63</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.28%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10.25</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$6.88</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net Asset Value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10.41</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$11.24</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(7.38)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$11.43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8.86</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following charts show the portfolio composition of the Fund&#146;s long-term investments and credit quality allocations of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s Corporate Bond investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="23%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=center><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Portfolio Composition</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>76%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>79%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17</FONT>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign Government Obligations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="53%"></TD>
     <TD width="27%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit Quality Allocations</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A/A</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 19%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BBB/Baa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>47</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BB/Ba</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B/B</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CCC/Caa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>D</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Not Rated</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the higher of Standard &amp; Poor&#146;s (&#147;S&amp;P&#146;s&#148;) or Moody&#146;s Investors</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Service (&#147;Moody&#146;s&#148;) ratings.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>6 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<A name="page_8"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Fund Summary </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>as of April 30, 2009 </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate Income Strategies Fund, Inc.</FONT></B></P>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Objective</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate Income Strategies Fund, Inc. (PSW) (the &#147;Fund&#148;) </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seeks to provide shareholders with high current income and capital</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>appreciation. The Fund seeks to achieve its objectives by investing primarily in a portfolio of preferred securities and debt securities, including convertible</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>securities that may be converted into common stock or other securities of the same or a different issuer. No assurance can be given that the Fund&#146;s invest-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ment objective will be achieved.</FONT><BR>
<BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Performance</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, the Fund returned (11.81)% based on market price and (15.87)% based on net asset value (NAV). For the same</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>period, the closed-end Lipper Income &amp; Preferred Stock Funds category posted an average return of (5.69)% on a market price basis and (8.83)% on a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NAV basis. All returns reflect reinvestment of dividends. The Fund&#146;s discount to NAV, which narrowed during the period, accounts for the difference between</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>performance based on price and performance based on NAV. The Fund&#146;s Lipper category contains both preferred and equity funds, both of which declined</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>significantly through early March and rebounded sharply afterwards. Equities, as measured by the S&amp;P 500 Index, lost 8.53% for the six months, while</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>preferred securities, as measured by the Merrill Lynch Fixed Rate Preferred Index, lost 11.62%. Financial issues make up a significant percentage of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>preferred market and, during the period, were highly correlated to financial equities, which significantly underperformed. Accordingly, the Fund&#146;s holdings of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>financials detracted from returns, as did relatively high levels of leverage. Due to adverse market conditions during the period, the Fund invested a higher</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>than usual percentage of its assets in cash equivalent securities. This higher-than-normal allocation to cash helped performance for the six months.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>views are not intended to be a forecast of future events and are no guarantee of future results.</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="12%"></TD>
     <TD width="61%"></TD>
     <TD width="26%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Symbol on New York Stock Exchange</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PSW</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Offering Date</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>August 1, 2003</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield based on Closing Market Price as of April 30, 2009 ($5.55)</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17.47%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Monthly Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.0808</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Annualized Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.9696</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Leverage as of April 30, 2009</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>44%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Past performance does not guarantee future results.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Monthly Distribution per Common Share, declared on June 1, 2009, was decreased to $0.06. The Yield on Closing Market Price, Current</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>distribution rate is not constant and is subject to further change in the future. A portion of the distribution may be deemed a tax return of capital or</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>net realized gain.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(including any assets attributable to any borrowing that may be outstanding and Preferred Shares) minus the sum of accrued liabilities (other than</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>debt representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see the Benefits and Risks of Leveraging</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on page 11.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The table below summarizes the changes in the Fund&#146;s market price and net asset value per share:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="27%"></TD>
     <TD width="11%"></TD>
     <TD width="11%"></TD>
     <TD width="9%"></TD>
     <TD width="7%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Change</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market Price</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$5.55</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$7.00</FONT>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(20.71)%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$7.99</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$3.44</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net Asset Value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$5.62</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$7.43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(24.36)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$7.60</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$4.55</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following charts show the portfolio composition of the Fund&#146;s total investments and credit quality allocations of the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital Trust, Trust Preferred and Corporate Bond investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="30%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Portfolio Composition</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Securities</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>71%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>87%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27</FONT>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="53%"></TD>
     <TD width="27%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit Quality Allocations</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AA/Aa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; 14%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A/A</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>33</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>46</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BBB/Baa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>57</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BB/Ba</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B/B</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CCC/Caa</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the higher of S&amp;P&#146;s or Moody&#146;s ratings.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>7</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Fund Summary </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>as of April 30, 2009 </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust</FONT></B></P>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Objective</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (BTZ) (the &#147;Fund&#148;) </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seeks to achieve high current income, current gains and capital appreciation. The</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund will invest primarily in preferred and equity securities and derivatives with economic characteristics similar to individual or groups of equity securi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ties. The Fund will seek to generate income through an allocation of Qualified Dividend Income-eligible preferreds, common stocks that generate qualified</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>dividend income and an index options strategy. No assurance can be given that the Fund&#146;s investment objective will be achieved.</FONT><BR>
<BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Performance</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, the Fund returned (4.23)% based on market price and (8.73)% based on net asset value (NAV). For the same</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>period, the closed-end Lipper Income &amp; Preferred Stock Funds category posted an average return of (5.69)% on a market price basis and (8.83)% on a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NAV basis. All returns reflect reinvestment of dividends. The Fund&#146;s discount to NAV, which narrowed during the period, accounts for the difference between</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>performance based on price and performance based on NAV. The Fund&#146;s Lipper category contains both preferred and equity funds, both of which declined</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>significantly through early March and rebounded sharply afterwards. Equities, as measured by the S&amp;P 500 Index, lost 8.53% for the six months, while</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>preferred securities, as measured by the Merrill Lynch Fixed Rate Preferred Index, lost 11.62%. Financial issues make up a significant percentage of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>preferred market and, during the period, were highly correlated to financial equities, which significantly underperformed. Accordingly, the Fund&#146;s holdings of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>financials detracted from returns, as did relatively high levels of leverage. Due to adverse market conditions during the period, the Fund invested a higher</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>than usual percentage of its assets in cash equivalent securities. This higher-than-average allocation to cash, combined with options strategies used by the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund to generate additional income, helped performance for the six months.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>views are not intended to be a forecast of future events and are no guarantee of future results.</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="12%"></TD>
     <TD width="57%"></TD>
     <TD width="30%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Symbol on New York Stock Exchange</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BTZ</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Offering Date</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December 27, 2006</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on Closing Market Price as of April 30, 2009 ($8.05)</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19.38%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Monthly Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.13</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Annualized Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1.56</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Leverage as of April 30, 2009</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Past performance does not guarantee future results.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Monthly Distribution per Common Share, declared on June 1, 2009, was decreased to $0.10. The Yield on Closing Market Price, Current</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>distribution rate is not constant and is subject to further change in the future. A portion of the distribution may be deemed a tax return of capital or</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>net realized gain.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(including any assets attributable to any borrowing that may be outstanding and Preferred Shares) minus the sum of accrued liabilities (other than</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>debt representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see the Benefits and Risks of Leveraging</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on page 11.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The table below summarizes the changes in the Fund&#146;s market price and net asset value per share:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="27%"></TD>
     <TD width="11%"></TD>
     <TD width="11%"></TD>
     <TD width="10%"></TD>
     <TD width="7%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Change</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market Price</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8.05</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9.36</FONT>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(14.00)%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9.80</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$4.56</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net Asset Value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8.68</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10.59</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(18.04)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10.80</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$6.89</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following charts show the portfolio composition of the Fund&#146;s total investments and credit quality allocations of the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital Trust, Trust Preferred and Corporate Bond investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="30%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Portfolio Composition</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Securities</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>52%</FONT>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>59%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24</FONT>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15</FONT>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="53%"></TD>
     <TD width="27%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit Quality Allocations</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AA/Aa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp; 21%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A/A</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BBB/Baa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>47</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>34</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BB/Ba</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B/B</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CCC/Caa</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the higher of S&amp;P&#146;s or Moody&#146;s ratings.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>8 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Fund Summary </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>as of April 30, 2009 </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Income Strategies Fund, Inc.</FONT></B></P>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Objective</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Income Strategies Fund, Inc. (PSY) (the &#147;Fund&#148;) </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seeks to provide shareholders with current income and capital appreciation. The Fund</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seeks to achieve its objectives by investing primarily in a portfolio of preferred securities, including convertible preferred securities that may be converted</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>into common stock or other securities of the same or a different issuer. No assurance can be given that the Fund&#146;s investment objective will be achieved.</FONT><BR>
<BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Performance</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, the Fund returned (16.83)% based on market price and (17.88)% based on net asset value (NAV). For the same</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>period, the closed-end Lipper Income &amp; Preferred Stock Funds category posted an average return of (5.69)% on a market price basis and (8.83)% on a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NAV basis. All returns reflect reinvestment of dividends. The Fund&#146;s premium to NAV, which widened during the period, accounts for the difference between</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>performance based on price and performance based on NAV. The Fund&#146;s Lipper category contains both preferred and equity funds, both of which declined</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>significantly through early March and rebounded sharply afterwards. Equities, as measured by the S&amp;P 500 Index, lost 8.53% for the six months, while</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>preferred securities, as measured by the Merrill Lynch Fixed Rate Preferred Index, lost 11.62%. Financial issues make up a significant percentage of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>preferred market and, during the period, were highly correlated to financial equities, which significantly underperformed. Accordingly, the Fund&#146;s holdings of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>financials detracted from returns, as did relatively high levels of leverage. Due to adverse market conditions during the period, the Fund invested a higher</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>than usual percentage of its assets in cash equivalent securities. This higher-than-normal allocation to cash helped performance for the six months.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>views are not intended to be a forecast of future events and are no guarantee of future results.</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="12%"></TD>
     <TD width="58%"></TD>
     <TD width="28%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Symbol on New York Stock Exchange</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PSY</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Offering Date</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>March 28, 2003</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on Closing Market Price as of April 30, 2009 ($6.05)</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18.76%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Monthly Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.094583</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Annualized Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1.134996</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Leverage as of April 30, 2009</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Past performance does not guarantee future results.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Monthly Distribution per Common Share, declared June 1, 2009, was decreased to $0.075. The Yield on Closing Market Price, Current</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>distribution rate is not constant and is subject to further change in the future. A portion of the distribution may be deemed a tax return of capital or</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>net realized gain.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(including any assets attributable to any borrowing that may be outstanding and Preferred Shares) minus the sum of accrued liabilities (other than</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>debt representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see the Benefits and Risks of Leveraging</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on page 11.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The table below summarizes the changes in the Fund&#146;s market price and net asset value per share:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="27%"></TD>
     <TD width="11%"></TD>
     <TD width="11%"></TD>
     <TD width="9%"></TD>
     <TD width="7%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Change</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market Price</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$6.05</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8.10</FONT>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(25.31)%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8.40</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$3.69</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net Asset Value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$5.87</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$7.96</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(26.26)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8.17</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$4.60</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following charts show the portfolio composition of the Fund&#146;s total investments and credit quality allocations of the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital Trust, Trust Preferred and Corporate Bond investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="30%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Portfolio Composition</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Securities</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>94%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>93%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="53%"></TD>
     <TD width="27%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit Quality Allocations</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AA/Aa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A/A</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>34</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>49</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BBB/Baa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BB/Ba</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B/B</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CCC/Caa</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the higher of S&amp;P&#146;s or Moody&#146;s ratings.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>9</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Fund Summary </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>as of April 30, 2009 </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Opportunity Trust</FONT></B></P>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Objective</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Opportunity Trust (BPP) (the &#147;Fund&#148;) </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seeks high current income consistent with capital preservation by investing primarily in preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>securities. No assurance can be given that the Fund&#146;s investment objective will be achieved.</FONT><BR>
<BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Performance</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, the Fund returned (7.59)% based on market price and (15.77)% based on net asset value (NAV). For the same</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>period, the closed-end Lipper Income &amp; Preferred Stock Funds category posted an average return of (5.69)% on a market price basis and (8.83)% on a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NAV basis. All returns reflect reinvestment of dividends. The Fund moved from a discount to NAV to a premium by period-end, which accounts for the differ-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ence between performance based on price and performance based on NAV. The Fund&#146;s Lipper category contains both preferred and equity funds, both of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>which declined significantly through early March and rebounded sharply afterwards. Equities, as measured by the S&amp;P 500 Index, lost 8.53% for the six</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>months, while preferred securities, as measured by the Merrill Lynch Fixed Rate Preferred Index, lost 11.62%. Financial issues make up a significant per-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>centage of the preferred market and, during the period, were highly correlated to financial equities, which significantly underperformed. Accordingly, the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s holdings of financials detracted from returns, as did relatively high levels of leverage. Due to adverse market conditions during the period, the Fund</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>invested a higher than usual percentage of its assets in cash equivalent securities. This higher-than-average allocation to cash helped performance for the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>six months.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>views are not intended to be a forecast of future events and are no guarantee of future results.</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="12%"></TD>
     <TD width="57%"></TD>
     <TD width="29%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Symbol on New York Stock Exchange</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BPP</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Offering Date</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>February 28, 2003</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on Closing Market Price as of April 30, 2009 ($7.08)</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17.80%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Monthly Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.105</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Current Annualized Distribution per Common Share</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1.260</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Leverage as of April 30, 2009</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Past performance does not guarantee future results.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Monthly Distribution per Common Share, declared on June 1, 2009, was decreased to $0.0725. The Yield on Closing Market Price, Current</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>distribution rate is not constant and is subject to further change in the future. A portion of the distribution may be deemed a tax return of capital or</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>net realized gain.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Represents reverse repurchase agreements and Preferred Shares as a percentage of total managed assets, which is the total assets of the Fund</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(including any assets attributable to any borrowing that may be outstanding and Preferred Shares) minus the sum of accrued liabilities (other than</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>debt representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see the Benefits and Risks of Leveraging</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on page 11.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The table below summarizes the changes in the Fund&#146;s market price and net asset value per share:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="27%"></TD>
     <TD width="11%"></TD>
     <TD width="11%"></TD>
     <TD width="10%"></TD>
     <TD width="7%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Change</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market Price</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$7.08</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8.51</FONT>&nbsp;</TD>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(16.80)%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10.18</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$4.00</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net Asset Value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$6.65</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8.77</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(24.17)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9.05</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$5.06</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following chart shows the portfolio composition of the Fund&#146;s total investments and credit quality allocations of the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital Trust, Trust Preferred and Corporate Bond investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="30%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Portfolio Composition</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Securities</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp; 77%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&nbsp; 90%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT>&nbsp;</TD>
     <TD align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment Companies</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="53%"></TD>
     <TD width="27%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit Quality Allocations</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>10/31/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AA/Aa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A/A</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BBB/Baa</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>56</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BB/Ba</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD>
     <TD align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CCC/Caa</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the higher of S&amp;P&#146;s or Moody&#146;s ratings.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>10 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>The Benefits and Risks of Leveraging</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds may utilize leverage to seek to enhance the yield and NAV of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>their Common Shares. However, these objectives cannot be achieved in all</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interest rate environments.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>To leverage, BlackRock Floating Rate Income Trust, BlackRock Preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Corporate Income Strategies Fund, Inc., BlackRock Preferred and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Equity Advantage Trust, BlackRock Preferred Income Strategies Fund, Inc.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and BlackRock Preferred Opportunity Trust issue Preferred Shares, which</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pay dividends at prevailing short-term interest rates. In addition, certain</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Funds may utilize leverage through borrowings or issuance of short-term</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>securities. In general, the concept of leveraging is based on the premise</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that the cost of assets to be obtained from leverage will be based on</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>short-term interest rates, which normally will be lower than the income</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>earned by each Fund on its longer-term portfolio investments. To the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>extent that the total assets of each Fund (including the assets obtained</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>from leverage) are invested in higher-yielding portfolio investments, each</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s Common Shareholders will benefit from the incremental yield.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The interest earned on securities purchased with the proceeds from lever-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>age is paid to Common Shareholders in the form of dividends, and the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of these portfolio holdings is reflected in the per share NAV of each</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s Common Shares. However, in order to benefit Common Shareholders,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the yield curve must be positively sloped; that is, short-term interest rates</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>must be lower than long-term interest rates. If the yield curve becomes</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>negatively sloped, meaning short-term interest rates exceed long-term</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interest rates, returns to Common Shareholders will be lower than if the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Funds had not used leverage.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>To illustrate these concepts, assume a Fund&#146;s Common Shares capitalization</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>is $100 million and it issues Preferred Shares for an additional $50 million,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>creating a total value of $150 million available for investment in long-term</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>municipal bonds. If prevailing short-term interest rates are 3% and long-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>term interest rates are 6%, the yield curve has a strongly positive slope. In</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>this case, the Fund pays dividends on the $50 million of Preferred Shares</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>based on the lower short-term interest rates. At the same time, the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>total portfolio of $150 million earns the income based on long-term interest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rates. In this case, the dividends paid to Preferred Shareholders are signifi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cantly lower than the income earned on the fund&#146;s long-term investments,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and therefore the Common Shareholders are the beneficiaries of the incre-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>mental yield.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Conversely, if prevailing short-term interest rates rise above long-term inter-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>est rates of 6%, the yield curve has a negative slope. In this case, the Fund</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pays dividends on the higher short-term interest rates whereas the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>total portfolio earns income based on lower long-term interest rates. If short-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>term interest rates rise, narrowing the differential between short-term and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>long-term interest rates, the incremental yield pickup on the Common</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares will be reduced or eliminated completely.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Furthermore, the value of the Fund&#146;s portfolio investments generally varies</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>inversely with the direction of long-term interest rates, although other factors</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>can influence the value of portfolio investments. In contrast, the redemption</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of the Fund&#146;s Preferred Shares does not fluctuate in relation to interest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rates. As a result, changes in interest rates can influence the Fund&#146;s NAV</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>positively or negatively in addition to the impact on Fund performance from</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>leverage from debt securities.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The use of leverage may enhance opportunities for increased returns to the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund and Common Shareholders, but as described above, they also create</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>risks as short- or long-term interest rates fluctuate. Leverage also will gener-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ally cause greater changes in a Fund&#146;s NAV, market price and dividend rate</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>than a comparable portfolio without leverage. If the income derived from</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>securities purchased with assets received from leverage exceeds the cost</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of leverage, the Fund&#146;s net income will be greater than if leverage had not</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>been used. Conversely, if the income from the securities purchased is not</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>sufficient to cover the cost of leverage, the Fund&#146;s net income will be less</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>than if leverage had not been used, and therefore the amount available for</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>distribution to shareholders will be reduced. The Fund may be required to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>sell portfolio securities at inopportune times or below fair market values in</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>order to comply with regulatory requirements applicable to the use of lever-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>age or as required by the terms of leverage instruments which may cause a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund to incur losses. The use of leverage may limit a Fund&#146;s ability to invest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>in certain types of securities or use certain types of hedging strategies,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>such as in the case of certain restrictions imposed by ratings agencies that</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rate preferred shares issued by the Fund. The Fund will incur expenses in</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>connection with the use of leverage, all of which are borne by the holders</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of the Common Shares and may reduce returns on the Common Shares.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Under the Investment Company Act of 1940, the Funds are permitted to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>issue Preferred Shares in an amount of up to 50% of their total managed</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>assets at the time of issuance. Under normal circumstances, each Fund</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>anticipates that the total economic leverage from Preferred Shares, reverse</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>repurchase agreements and credit facility borrowings will not exceed 50%</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of its total managed assets at the time such leverage is incurred. As of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009, the Funds had economic leverage from Preferred Shares,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>reverse repurchase agreements and/or credit facility borrowings as a per-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>centage of their total managed assets as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="80%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Percent of</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Leverage</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade 2009 Term Trust Inc</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate Income Strategies Fund, Inc</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>44%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Income Strategies Fund, Inc</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Opportunity Trust</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Derivative Instruments</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds may invest in various derivative instruments, including swap</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>agreements, futures and forward currency contracts, and other instruments</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>specified in the Notes to Financial Statements, which constitute forms of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>economic leverage. Such instruments are used to obtain exposure to a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market without owning or taking physical custody of securities or to hedge</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market and/or interest rate risks. Such derivative instruments involve risks,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>including the imperfect correlation between the value of a derivative instru-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ment and the underlying asset, possible default of the other party to the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>transaction and illiquidity of the derivative instrument. The Funds&#146; ability</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>to successfully use a derivative instrument depends on the Advisor&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ability to accurately predict pertinent market movements, which cannot</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>be assured. The use of derivative instruments may result in losses greater</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>than if they had not been used, may require the Funds to sell or purchase</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>portfolio securities at inopportune times or for prices other than current</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market values, may limit the amount of appreciation the Funds can realize</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on an investment or may cause the Funds to hold a security that it might</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>otherwise sell. The Funds&#146; investments in these instruments are discussed</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>in detail in the Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>11</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade 2009 Term Trust Inc. (BCT)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="60%"></TD>
     <TD width="10%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Asset-Backed Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Global Rated Eligible Asset Trust Series 1998-A</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Class 1, 7.45%, 9/15/07 (a)(b)(c)</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 234</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Structured Mortgage Asset Residential Trust Series 2,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.24%, 11/07/07 (a)(b)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>568</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>57</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Asset-Backed Securities &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>81</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 2.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Entergy Gulf States, Inc., 1.661%, 12/01/09 (d)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>979,547</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 5.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Comcast Corp., 1.439%, 7/14/09 (d)(e)(f)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,998,408</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Corporate Bonds &#151; 8.7%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,977,955</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>U.S. Government Sponsored Agency Mortgage-Backed Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fannie Mae Guaranteed Pass Through Certificates:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.50%, 1/01/17 &#150; 2/01/17</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>221</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>231,698</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.50%, 7/01/29</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,520</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total U.S. Government Sponsored Agency Mortgage-Backed</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>240,218</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>U.S. Government Sponsored Agency Mortgage-Backed</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities &#151; Collateralized Mortgage Obligations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fannie Mae Trust (g):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 1992-174 Class S, 154.28%, 9/25/22 (d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,108</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,976</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 1993-49 Class L, 444.9167%, 4/25/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,283</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 2004-13 Class IG, 5%, 10/25/22</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series G-21 Class L, 949.50%, 7/25/21</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>194</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,626</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Freddie Mac Multiclass Certificates:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 65 Class I, 918.0295%, 8/15/20 (g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>617</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,505</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 141 Class H, 1,060%, 5/15/21 (g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>116</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,570</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 1510 Class G, 7.05%, 5/15/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>998</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,058,099</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 2517 Class SE, 15.122%, 10/15/09 (d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>149</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>154,045</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 2523 Class EH, 5.50%, 4/15/20 (g)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>291</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,774</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total U.S. Government Sponsored Agency Mortgage&#150;Backed</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities &#151; Collateralized Mortgage Obligations &#151; 3.7%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,246,220</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Taxable Municipal Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>County/City/Special District/School District &#151; 2.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fresno, California, Taxable Pension Obligation Revenue</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bonds, 7.80%, 6/01/14 (e)(h)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>440</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>476,806</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kern County, California, Taxable Pension Obligation</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Revenue Bonds, 6.98%, 8/15/09 (e)(i)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>506,565</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Taxable Municipal Bonds &#151; 2.9%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>983,371</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="61%"></TD>
     <TD width="18%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Non-U.S. Government Sponsored Agency</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Mortgage-Backed Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Mortgage Trust Series 2006-A7 Class 2A2,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.791%, 1/25/37 (d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,194</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 786,377</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nomura Asset Acceptance Corp. Series 2004-AR4</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Class 2A3, 0.773%, 12/25/34 (d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>62</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>29,983</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Salomon Brothers Mortgage Securities VI, Inc. Series</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1987-3 Class A, 12.50%, 10/23/17 (j)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,959</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Structured Adjustable Rate Mortgage Loan Trust Series</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2004-11 Class A, 5.043%, 8/25/34 (d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>388</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>386,675</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Vendee Mortgage Trust Series 2002-1, 0.043%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10/15/31 (d)(g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,688</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,428</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>WaMu Mortgage Pass-Through Certificates Series</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2005-AR4 Class A3, 4.585%, 4/25/35 (d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>815</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>758,391</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wells Fargo Mortgage Backed Securities Trust Series</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2004-N Class A6, 4%, 8/25/34 (d)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>497,424</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Non-U.S. Government Sponsored Agency</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Mortgage-Backed Securities &#151; 7.2%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,472,237</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>U.S. Government Sponsored Agency Obligations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fannie Mae, 5.964%, 10/09/19 (f)(k)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,505,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total U.S. Government Sponsored Agency</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Obligations &#151; 74.8%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,505,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Long-Term Investments</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $35,519,186) &#151; 98.0%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>33,425,582</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Money Market Fund &#151; 8.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund, 0.64% (l)(m)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,780,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,780,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $2,780,000) &#151; 8.1%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,780,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments (Cost &#151; $38,299,186*) &#151; 106.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,205,582</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities in Excess of Other Assets &#151; (6.1)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,094,680)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets &#151; 100.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 34,110,902</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* The cost and unrealized appreciation (depreciation) of investments as of April 30,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009, as computed for federal income tax purposes, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="42%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 38,299,186</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized appreciation</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 172,777</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,266,381)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (2,093,604)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a) Non-income producing security.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(b) Issuer filed for bankruptcy and/or is in default of interest payments.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(c) Security exempt from registration under Rule 144A of the Securities Act of 1933.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>These securities may be resold in transactions exempt from registration to qualified</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>institutional investors.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(d) Variable rate security. Rate shown is as of report date.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>12 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (concluded) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade 2009 Term Trust Inc. (BCT)</FONT></B></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(e) All or a portion of security has been pledged as collateral in connection with open</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>financial futures contracts.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(f) All or a portion of security has been pledged as collateral for reverse repurchase</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>agreements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(g) Represents the interest-only portion of a mortgage-backed security and has either a</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>nominal or notional amount of principal.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(h) Security is collateralized by Municipal or US Treasury Obligations.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(i) NPFGC Insured.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(j) Represents the principal only portion of a mortgage-backed security.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(k) Represents a zero-coupon bond. Rate shown reflects the current yield as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>report date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(l) Investments in companies considered to be an affiliate of the Fund, for purposes</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="53%"></TD>
     <TD width="28%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Affiliate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Activity</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,780,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$3,712</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(m) Represents the current yield as of report date.</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="19%"></TD>
     <TD width="1%"></TD>
     <TD width="11%"></TD>
     <TD width="2%"></TD>
     <TD width="2%"></TD>
     <TD width="14%"></TD>
     <TD width="13%"></TD>
     <TD width="16%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Interest</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD colSpan=3 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trade Maturity Net Closing</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counterparty</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank Plc</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.35%</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2/19/09</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Open $ 1,749,632</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,748,425</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit Suisse</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.25%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1/29/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Open</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>525,875</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>524,219</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,275,507</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,272,644</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=8 align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><SUP><FONT size=5 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif><FONT size=1>Financial</FONT> </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>futures contracts sold as of April 30, 2009 were as follows:</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expiration</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Depreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>289</FONT>&nbsp;</TD>
     <TD colSpan=3 align=right>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10-Year U.S.</FONT>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June</FONT>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=4 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Bond</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$34,703,522</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (247,416)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=8 align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><SUP><FONT size=5 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif><FONT size=1>Interest</FONT> </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rate swaps outstanding as of April 30, 2009 were as follows:</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counterparty</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.745%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a)</FONT></SUP>&nbsp;</TD>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3-month</FONT>&nbsp;</TD>
     <TD colSpan=3 align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit Suisse</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>October</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LIBOR</FONT>&nbsp;</TD>
     <TD colSpan=3 align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2010</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 45,894</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.743%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a)</FONT></SUP>&nbsp;</TD>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3-month</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>October</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LIBOR</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2010</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45,971</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 91,865</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=8 align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a) Fund pays floating interest rate and receives fixed rate.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Effective November 1, 2008, the Fund adopted Financial Accounting Standards</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Board Statement of Financial Accounting Standards No. 157, &#147;Fair Value</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Measurements&#148; (&#147;FAS 157&#148;). FAS 157 clarifies the definition of fair value, estab-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>lishes a framework for measuring fair values and requires additional disclosures</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>about the use of fair value measurements. Various inputs are used in determining</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the fair value of investments, which are as follows:</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1 &#151; price quotations in active markets/exchanges for identical securities</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2 &#151; other observable inputs (including, but not limited to: quoted prices</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for similar assets or liabilities in markets that are active, quoted prices for identi-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cal or similar assets in markets that are not active, inputs other than quoted</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>prices that are observable for the assets or liabilities (such as interest rates, yield</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>curves, volatilities, prepayment speeds, loss severities, credit risks and default</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rates) or other market-corroborated inputs)</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3 &#151; unobservable inputs based on the best information available in the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>circumstance, to the extent observable inputs are not available (including the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s own assumptions used in determining the fair value of investments)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The inputs or methodology used for valuing securities are not necessarily an</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>indication of the risk associated with investing in those securities. For information</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>about the Fund&#146;s policy regarding valuation of investments and other significant</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>accounting policies, please refer to Note 1 of the Notes to Financial Statements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following table summarizes the inputs used as of April 30, 2009 in determining</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the fair valuation of the Fund&#146;s investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="24%"></TD>
     <TD width="36%"></TD>
     <TD width="18%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Valuation</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Inputs</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments*</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,780,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (247,416)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32,244,022</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 91,865</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,272,644)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,181,560</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 36,205,582</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 91,865</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (2,520,060)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* Other financial instruments are reverse repurchase agreements, futures and</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>swap contracts. Reverse repurchase agreements are shown at market value.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Futures and swap contracts are valued at the unrealized appreciation/</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>depreciation on the instrument.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following is a reconciliation of investments for unobservable inputs (Level 3)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>used in determining fair value:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="68%"></TD>
     <TD width="31%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Balance, as of October 31, 2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 80</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accrued discounts/premiums</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Realized gain</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>404</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Change in unrealized appreciation/depreciation</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(413,020)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net sales</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(54,123)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net transfers into Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,648,219</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Balance, as of April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,181,560</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Included in the related net change in unrealized appreciation/depreciation on</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Statements of Operations.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>13</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc. (CII)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="60%"></TD>
     <TD width="19%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Aerospace &amp; Defense &#151; 4.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Honeywell International, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>154,308</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,815,953</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Northrop Grumman Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>178,552</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,632,989</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Raytheon Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>230,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,402,900</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,851,842</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Air Freight &amp; Logistics &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>United Parcel Service, Inc. Class B</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,914</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,879,739</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 5.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Bank of New York Mellon Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>483,498</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,319,529</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Invesco Ltd. (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>613,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,032,192</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Morgan Stanley</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>273,913</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,475,303</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,827,024</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Chemicals &#151; 1.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Air Products &amp; Chemicals, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>55,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,657,450</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>E.I. du Pont de Nemours &amp; Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>251,345</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,012,525</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,669,975</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Communications Equipment &#151; 2.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cisco Systems, Inc. (b)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>220,305</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,256,293</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corning, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>268,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,929,856</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nokia Oyj (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>440,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,221,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,407,749</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Computers &amp; Peripherals &#151; 4.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hewlett-Packard Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>313,392</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,275,844</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International Business Machines Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>121,653</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,555,806</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,831,650</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 3.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase &amp; Co.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>529,339</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,468,187</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Telecommunication Services &#151; 7.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AT&amp;T Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>430,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,016,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Qwest Communications International Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,950,001</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,365,504</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Verizon Communications, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>445,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,501,300</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,883,404</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 3.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American Electric Power Co., Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>48,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,287,344</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FPL Group, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>163,644</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,802,411</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Southern Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>277,129</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,003,485</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18,093,240</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electrical Equipment &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Emerson Electric Co.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>153,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,208,120</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Energy Equipment &amp; Services &#151; 3.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BJ Services Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>669,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,299,355</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Halliburton Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>504,489</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,200,767</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19,500,122</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Food &amp; Staples Retailing &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wal-Mart Stores, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>83,926</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,229,871</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Food Products &#151; 6.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>General Mills, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>237,371</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,032,336</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kraft Foods, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>488,699</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,435,557</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ralcorp Holdings, Inc. (b)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>57</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unilever NV (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>552,232</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,928,671</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>34,396,621</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Health Care Equipment &amp; Supplies &#151; 2.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Baxter International, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100,841</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,890,788</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Covidien Ltd.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>200,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,596,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,486,788</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="16%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Household Products &#151; 3.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Clorox Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>55,457</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,108,365</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kimberly-Clark Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>305,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,987,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Procter &amp; Gamble Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>72,145</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,566,849</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,662,914</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Industrial Conglomerates &#151; 1.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>General Electric Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>93,434</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,181,940</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tyco International Ltd.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>270,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,415,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,597,140</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 7.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ACE Ltd.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>190,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,842,488</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>273,525</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,137,369</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Prudential Financial, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>135,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,898,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Travelers Cos., Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>506,330</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,830,416</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41,709,073</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Machinery &#151; 1.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deere &amp; Co.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>207,286</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,552,620</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 5.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Time Warner Cable, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>107,776</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,473,621</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Time Warner, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>580,972</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,682,619</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Viacom, Inc. Class B (b)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>454,024</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,735,422</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Walt Disney Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>265,047</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,804,529</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,696,191</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Metals &amp; Mining &#151; 2.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nucor Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>218,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,902,972</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>United States Steel Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>136,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,624,075</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,527,047</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multi-Utilities &#151; 1.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dominion Resources, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>185,239</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,586,808</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Office Electronics &#151; 2.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Xerox Corp.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,550,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,580,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 7.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Anadarko Petroleum Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>89,217</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,841,684</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Chevron Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,576,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Exxon Mobil Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>349,956</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,331,566</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Peabody Energy Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>210,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,541,900</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,291,150</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Pharmaceuticals &#151; 10.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bristol-Myers Squibb Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>752,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,448,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Johnson &amp; Johnson</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>151,354</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,924,896</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pfizer, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>725,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,686,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Schering-Plough Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>844,303</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19,435,855</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wyeth</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>125,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,300,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>56,794,751</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Semiconductors &amp; Semiconductor Equipment &#151; 8.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Analog Devices, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>536,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,406,080</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Intel Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>541,778</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,549,257</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LSI Corp. (b)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,109,020</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,778,637</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Micron Technology, Inc. (b)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,120,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,346,088</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>46,080,062</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Software &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Microsoft Corp.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>243,014</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,923,464</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Specialty Retail &#151; 1.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Home Depot, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>252,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,645,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Long-Term Investments</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $696,550,707) &#151; 100.3%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>554,381,852</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>14 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<A name="page_16"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc. (CII)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="16%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Time Deposits &#151; 1.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Brown Brothers Harriman &amp; Co., 0.03%, 5/01/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,079</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,079,230</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $10,079,230) &#151; 1.8%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,079,230</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments Before Options Written</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $706,629,937*) &#151; 102.1%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>564,461,082</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Options Written</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Exchange-Traded Call Options</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ACE Ltd.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 45</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>190</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(50,825)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>190</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(30,875)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring August 2009 at USD 50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>190</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(57,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AT&amp;T Inc., expiring May 2009 at USD 26</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,150</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(94,600)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Air Products &amp; Chemicals, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>140</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(151,200)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>140</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(163,800)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American Electric Power Co., Inc., expiring May 2009</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at USD 27.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>150</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,125)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Analog Devices, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 20</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>490</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(73,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 22.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,650)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 22.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>590</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(38,350)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BJ Services Co., expiring May 2009 at USD 12.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(256,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Bank of New York Mellon Corp., expiring May 2009</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at USD 30</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>725</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(16,312)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bristol-Myers Squibb Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 21</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(85,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 22</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,260</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(15,120)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cisco Systems, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 18</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>575</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(90,562)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 19</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,030</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(138,020)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring July 2009 at USD 19</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(7,065)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Clorox Co., expiring June 2009 at USD 55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>415</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(127,612)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corning, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 12.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>485</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(104,275)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 16</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13,125)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deere &amp; Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 41</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>105</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(37,800)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 43</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,450</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(384,250)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>E.I. du Pont de Nemours &amp; Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 25</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(244,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 28</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>550</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(85,250)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring July 2009 at USD 25</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>340</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(129,200)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Emerson Electric Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 30</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(103,750)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 34</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>210</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(38,325)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Exxon Mobil Corp., expiring May 2009 at USD 75</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>675</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,700)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FPL Group, Inc., expiring June 2009 at USD 50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(230,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Halliburton Co., expiring June 2009 at USD 21</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(142,350)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hewlett-Packard Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 33</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(227,797)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 35</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>245</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(39,813)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 39</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>570</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(51,300)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Home Depot, Inc., expiring May 2009 at USD 25</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,085</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(184,992)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Honeywell International, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 30</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>390</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(95,550)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 32.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>380</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(44,650)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Intel Corp.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 15.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,380</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(102,424)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 16</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,330</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(101,080)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International Business Machines Corp., expiring June 2009</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at USD 105</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>610</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(219,600)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Invesco Ltd.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>350</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(28,875)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring July 2009 at USD 17.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>210</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(18,375)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="66%"></TD>
     <TD width="13%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Options Written</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Exchange-Traded Call Options (concluded)</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase &amp; Co., expiring June 2009 at USD 34</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,590</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (434,865)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Johnson &amp; Johnson:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>575</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(7,188)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(23,750)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring July 2009 at USD 55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>77</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(8,085)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kimberly-Clark Corp., expiring May 2009 at USD 50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>775</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(46,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kraft Foods, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 24</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(80,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 24</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,670</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(133,600)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LSI Corp., expiring June 2009 at USD 4.18</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(368,016)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc., expiring June 2009 at USD 35</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>830</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(118,275)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Micron Technology, Inc., expiring June 2009 at USD 5</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(115,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Morgan Stanley, expiring May 2009 at USD 28</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>820</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12,300)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nokia Oyj:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>320</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(20,800)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(22,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Northrop Grumman Corp.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 40</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>680</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(557,600)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>660</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(108,900)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nucor Corp., expiring June 2009 at USD 47</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>650</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(65,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Peabody Energy Corp., expiring June 2009 at USD 29</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>630</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(81,900)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pfizer, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4,800)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Procter &amp; Gamble Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>440</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(41,800)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring July 2009 at USD 55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(6,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Prudential Financial, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 30</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>105</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(19,163)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 32</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(78,750)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Qwest Communications International Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 3.32</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,320</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(938,074)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 5</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(17,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Raytheon Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 47.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(18,750)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 45</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,225</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(278,688)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Time Warner Cable, Inc., expiring June 2009 at USD 30</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>530</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(174,900)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Time Warner, Inc., expiring June 2009 at USD 24</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(166,750)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Travelers Cos., Inc., expiring July 2009 at USD 45</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,520</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(224,200)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tyco International Ltd.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 22.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(176,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring July 2009 at USD 25</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(31,875)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unilever NV:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 20</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(50,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 20</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>650</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(52,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>United Parcel Service, Inc. Class B, expiring June 2009</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at USD 55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>180</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(27,900)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>United States Steel Corp., expiring July 2009 at USD 30</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>410</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(90,200)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Viacom, Inc. Class B, expiring June 2009 at USD 22.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,270</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(130,525)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wal-Mart Stores, Inc., expiring June 2009 at USD 52.50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>325</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(39,325)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Walt Disney Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 20</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>580</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(127,600)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 21</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(50,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Xerox Corp., expiring July 2009 at USD 6</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,550</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(178,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9,169,176)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Over-the-Counter Call Options</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Anadarko Petroleum Corp., expiring June 2009 at USD 45,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Morgan Stanley Capital Services Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>445</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(98,972)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Analog Devices, Inc., expiring June 2009 at USD 22.50,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Goldman Sachs Bank USA</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>420</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(27,300)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BJ Services Co., expiring May 2009 at USD 10.95,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Goldman Sachs Bank USA</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(520,380)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Bank of New York Mellon Corp., expiring May 2009</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at USD 31.80, Broker Citibank, N.A.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>725</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(19,611)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Baxter International, Inc., expiring June 2009 at USD 55,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker UBS AG</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12,610)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>15</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV>

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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (concluded) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc. (CII)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="5%"></TD>
     <TD width="10%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Options Written</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Over-the-Counter Call Options (concluded)</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Chevron Corp., expiring June 2009 at USD 68.41,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Goldman Sachs Bank USA</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (111,096)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corning, Inc., expiring June 2009 at USD 16,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Jeffries &amp; Co.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>65</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,101)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Covidien Ltd.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 33, Broker Barclays</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank, Plc</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>175</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(16,084)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 33.69, Broker Credit Suisse</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>350</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(38,958)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 37, Broker Barclays</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank, Plc</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,861)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dominion Resources, Inc., expiring May 2009</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at USD 31.87, Broker Goldman Sachs Bank USA</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,390</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(14,081)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Exxon Mobil Corp.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 71, Broker UBS AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(79,807)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 75, Broker Credit</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Suisse International</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>675</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,700)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FPL Group, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 53, Broker Morgan Stanley</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital Services Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>227</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(28,196)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 53, Broker Jeffries &amp; Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(62,105)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>General Electric Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 13.11, Broker Citibank N.A.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(8,167)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring July 2009 at USD 13.17, Broker UBS AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>450</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(41,926)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>General Mills, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 53, Broker Goldman</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sachs Bank USA</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>890</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(34,301)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 53.14, Broker Morgan</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Stanley Capital Services Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>890</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(65,299)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Halliburton Co., expiring May 2009 at USD 20,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Jeffries &amp; Co.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(71,763)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Home Depot, Inc., expiring June 2009 at USD 26.37,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Morgan Stanley Capital Services Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>810</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(128,855)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Invesco Ltd., expiring May 2009 at USD 14.29, Broker</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit Suisse International</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,280</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(218,099)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kimberly-Clark Corp., expiring May 2009 at USD 48.84,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Citibank N.A.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(78,998)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Micron Technology, Inc., expiring May 2009 at USD 3.22,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Deutsche Bank AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,350</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(556,435)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Microsoft Corp.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring May 2009 at USD 18.68, Broker Citibank N.A.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>635</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(104,724)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 20, Broker UBS AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,190</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(120,369)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pfizer, Inc., expiring July 2009 at USD 14.06,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker UBS AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(100,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Schering-Plough Corp.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring June 2009 at USD 23.84, Broker Citibank N.A.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(111,447)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expiring July 2009 at USD 24.54, Broker Citibank N.A.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(90,909)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Southern Co., expiring May 2009 at USD 32.50,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker UBS AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,070</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,671)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Verizon Communications, Inc., expiring June 2009</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at USD 34.59, Broker UBS AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(15,387)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wal-Mart Stores, Inc., expiring May 2009 at USD 53.25,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Goldman Sachs Bank USA</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9,393)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Walt Disney Co., expiring May 2009 at USD 19.50,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Goldman Sachs Bank USA</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(122,325)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wyeth, expiring June 2009 at USD 43, Broker UBS AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>460</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(24,794)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Xerox Corp., expiring May 2009 at USD 5.70,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broker Deutsche Bank AG</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(328,593)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,273,317)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Options Written</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Premiums Received &#151; $10,076,704) &#151; (2.3)%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12,442,493)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments, Net of Options Written &#151; 99.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>552,018,589</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Assets Less Liabilities &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>902,538</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets &#151; 100.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 552,921,127</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* The cost and unrealized appreciation (depreciation) of investments as of April 30,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009, as computed for federal income tax purposes, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="56%"></TD>
     <TD width="39%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 707,081,634</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized appreciation</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7,465,563</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(150,086,115)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(142,620,552)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Depositary receipts.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(b)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Non-income producing security.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments in companies considered to be an affiliate of the Fund, for purposes</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="48%"></TD>
     <TD width="33%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Affiliate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Activity</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Series, LLC</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash Sweep Series</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(2,450,990)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$117,920</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For Fund compliance purposes, the Fund&#146;s industry classifications refer to any</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>one or more of the industry sub-classifications used by one or more widely</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>recognized market indexes or ratings group indexes, and/or as defined by Fund</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>management. This definition may not apply for purposes of this report, which may</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>combine industry sub-classifications for reporting ease.</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Accounting Standards Board Statement of Financial Accounting Standards</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>No. 157, &#147;Fair Value Measurements&#148; clarifies the definition of fair value, establishes</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>a framework for measuring fair values and requires additional disclosures about the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>use of fair value measurements. Various inputs are used in determining the fair</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of investments, which are as follows:</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1 &#151; price quotations in active markets/exchanges for identical securities</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2 &#151; other observable inputs (including, but not limited to: quoted prices</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for similar assets or liabilities in markets that are active, quoted prices for identi-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cal or similar assets in markets that are not active, inputs other than quoted</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>prices that are observable for the assets or liabilities (such as interest rates,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>yield curves, volatilities, prepayment speeds, loss severities, credit risks and</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>default rates) or other market-corroborated inputs)</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3 &#151; unobservable inputs based on the best information available in the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>circumstance, to the extent observable inputs are not available (including the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s own assumptions used in determining the fair value of investments)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The inputs or methodology used for valuing securities are not necessarily an indica-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tion of the risk associated with investing in those securities. For information about</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Fund&#146;s policy regarding valuation of investments and other significant accounting</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>policies, please refer to Note 1 of the Notes to Financial Statements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following table summarizes the inputs used as of April 30, 2009 in determining</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the fair valuation of the Fund&#146;s investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="34%"></TD>
     <TD width="43%"></TD>
     <TD width="21%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Valuation</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Inputs</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments*</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$554,381,852</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (7,138,300)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,079,230</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,304,193)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$564,461,082</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(12,442,493)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* Other financial instruments are options written, which are shown at market value.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>16 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="62%"></TD>
     <TD width="7%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Air Freight &amp; Logistics &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Park-Ohio Industries, Inc., 8.375%, 11/15/14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>125</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 55,313</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Auto Components &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Goodyear Tire &amp; Rubber Co., 6.318%, 12/01/09 (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>59,175</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lear Corp., 8.75%, 12/01/16</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,650</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>63,825</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Building Products &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CPG International I, Inc., 10.50%, 7/01/13</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>90</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 1.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>E*Trade Financial Corp., 12.50%, 11/30/17 (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,656</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,321,484</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Marsico Parent Co., LLC, 10.625%, 1/15/16 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,501</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>645,430</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>607</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>260,977</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Marsico Parent Superholdco, LLC,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14.50%, 1/15/18 (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>415</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>178,355</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,406,246</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Chemicals &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American Pacific Corp., 9%, 2/01/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>125</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>108,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ames True Temper, Inc., 5.131%, 1/15/12 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>913,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,021,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 4.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SNS Bank NV Series EMTN, 2.875%, 1/30/12</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,332,070</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Services &amp; Supplies &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>DI Finance Series B, 9.50%, 2/15/13</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>307</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>299,325</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Containers &amp; Packaging &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Berry Plastics Holding Corp., 5.195%, 9/15/14 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>177,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Impress Holdings BV, 4.256%, 9/15/13 (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>150</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>123,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>300,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FCE Bank Plc, 7.125%, 1/16/12</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>202,435</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Telecommunication Services &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cincinnati Bell, Inc., 7.25%, 7/15/13</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>290</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>286,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Qwest Corp., 4.57%, 6/15/13 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,262,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wind Acquisition Finance SA, 10.75%, 12/01/15 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>150</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>156,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,704,875</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electronic Equipment, Instruments &amp; Components &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sanmina-SCI Corp., 8.125%, 3/01/16</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>540</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>272,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Energy Equipment &amp; Services &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Compagnie Generale de Geophysique-Veritas:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.50%, 5/15/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>70</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>58,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.75%, 5/15/17</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>98,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Health Care Equipment &amp; Supplies &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>DJO Finance LLC, 10.875%, 11/15/14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>765,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Health Care Providers &amp; Services &#150; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tenet Healthcare Corp. (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9%, 5/01/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>95</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>95,950</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10%, 5/01/18</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,400</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>132,350</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Hotels, Restaurants &amp; Leisure &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American Real Estate Partners LP, 7.125%, 2/15/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>140</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>117,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Greektown Holdings, LLC, 10.75%, 12/01/13 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>122</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,320</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Universal City Florida Holding Co. I,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.778%, 5/01/10 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>80</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>49,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>174,520</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Household Durables &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Berkline/BenchCraft, LLC, 4.50%, 11/03/12 (b)(d)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>400</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="62%"></TD>
     <TD width="7%"></TD>
     <TD width="11%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Independent Power Producers &amp; Energy Traders &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AES Ironwood LLC, 8.875%, 11/30/25</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>84</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 72,016</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Machinery &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>210</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>111,300</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Synventive Molding Solutions Sub-Series A,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14%, 1/14/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>936</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>514,922</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>626,222</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Affinion Group, Inc., 10.125%, 10/15/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CSC Holdings, Inc., 8.50%, 4/15/14 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>550</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>561,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Charter Communications Holdings II (d):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LLC, 10.25%, 9/15/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>260</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>236,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LLC Series B, 10.25%, 9/15/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,725</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EchoStar DBS Corp.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.375%, 10/01/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>135</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>130,950</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 10/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>158</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>150,890</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.125%, 2/01/16</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>230</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>215,050</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Local Insight Regatta Hldgs, Inc., 11%, 12/01/17</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>977</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>234,480</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nielsen Finance LLC, 10%, 8/01/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>376,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Rainbow National Services LLC, 8.75%, 9/01/12 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>765,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,753,445</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Metals &amp; Mining &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foundation PA Coal Co., 7.25%, 8/01/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>505</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>468,388</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Freeport-McMoRan Copper &amp; Gold, Inc.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.995%, 4/01/15 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>175,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>643,888</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 10.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Morgan Stanley Bank AG for OAO Gazprom,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.625%, 3/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,530</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,184,100</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pemex Project Funding Master Trust,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.931%, 10/15/09 (a)(e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,700,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SandRidge Energy, Inc., 4.833%, 4/01/14 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,015,463</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Whiting Petroleum Corp., 7.25%, 5/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>300</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>264,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,163,563</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Paper &amp; Forest Products &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Abitibi-Consolidated, Inc., 4.82%, 6/15/11 (a)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>840</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>54,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ainsworth Lumber Co. Ltd., 11%, 7/29/15 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>470</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>119,248</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NewPage Corp., 7.278%, 5/01/12 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>645,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Verso Paper Holdings LLC Series B,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.778%, 8/01/14 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,215</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>410,063</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,228,911</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Pharmaceuticals &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Angiotech Pharmaceuticals, Inc.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.011%, 12/01/13 (a)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,225,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Real Estate Investment Trusts (REITs) &#151; 1.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Rouse Co. LP, 5.375%, 11/26/13 (d)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,350</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,222,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Specialty Retail &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>General Nutrition Centers, Inc., 6.404%, 3/15/14 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>395,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lazy Days&#146; R.V. Center, Inc., 11.75%, 5/15/12 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>375</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Michaels Stores, Inc., 10%, 11/01/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>185</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>111,925</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>529,425</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Tobacco &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reynolds American, Inc., 7.625%, 6/01/16</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,758,744</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Wireless Telecommunication Services &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>iPCS, Inc., 3.153%, 5/01/13 (a)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,155</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>935,550</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nordic Telephone Co. Holdings ApS,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.872%, 5/01/16 (a)(e)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,667,108</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,602,658</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Corporate Bonds &#151; 24.4%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>59,696,206</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>17</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV>

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<A name="page_19"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="62%"></TD>
     <TD width="7%"></TD>
     <TD width="11%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Foreign Government Obligations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Brazilian Government International Bond:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.982%, 6/29/09 (a)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,935</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6,987,013</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.25%, 6/17/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>475</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>572,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Colombia Government International Bond,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.866%, 3/17/13 (a)(e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,128,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Costa Rica Government International Bond,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.335%, 5/15/09 (e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,188,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Malaysia Government International Bond,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.75%, 6/01/09</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>803,471</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mexican Bonos Series M, 9%, 12/22/11</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MXN</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,520</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,054,366</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Republic of Venezuela, 2.101%, 4/20/11 (a)(e)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,120,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>South Africa Government International Bond,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.375%, 4/25/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,550,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Turkey Government International Bond, 7%, 9/26/16</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,735</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,762,350</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Uruguay Government International Bond,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.875%, 1/19/16</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>950</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,143,821</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Foreign Government Obligations &#151; 9.5%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,309,396</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Aerospace &amp; Defense &#151; 1.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Avio S.p.A. Dollar Mezzanine Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.25% &#150; 5.811%, 12/13/16</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,039</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>232,094</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hawker Beechcraft Acquisition Company LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Letter of Credit Facility Deposit, 1.12% &#150; 2.10%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/26/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>215</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 2.428% &#150; 3.22%, 3/26/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,661</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,881,272</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>IAP Worldwide Services, Inc. Term Loan (First-Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2% &#150; 7.25%, 12/30/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,045</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>585,252</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,809,368</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Airlines &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>US Airways Group, Inc. Loan, 2.941%, 3/21/14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,460</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>665,112</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Auto Components &#151; 2.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Allison Transmission, Inc. Term Loan, 3.21% &#150; 3.22%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8/07/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,808</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,143,457</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dana Holding Corporation Term Advance, 7.25%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1/31/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,235</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>659,470</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dayco Products LLC &#151; (Mark IV Industries, Inc.)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Replacement Term B Loan, 8.06% &#150; 8.75%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/21/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>853</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>117,762</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GPX International Tire:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporation Tranche B Term Loan, 9.23% &#150; 10.25%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/30/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>630</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>340,504</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 12%, 4/11/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,287</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Metaldyne Company LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deposit Funded Loan, 0.261% &#150; 5.188%, 1/11/12</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>104</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,150</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Tranche B Term Loan, 6.188%, 1/13/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>710</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>82,840</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,361,470</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Beverages &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Culligan International Company Loan (Second Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.836% &#150; 6.561%, 4/24/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>208,388</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Le-Nature&#146;s, Inc. Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.50%, 3/01/11 (d)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>308,388</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Building Products &#151; 1.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Building Materials Corporation of America Term Loan</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Advance, 3.25%, 2/22/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,692</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,006,990</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Custom Building Products, Inc. Loan (Second Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.75%, 4/20/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>810,000</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="7%"></TD>
     <TD width="11%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Building Products (concluded)</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Momentive Performance Materials (Blitz 06-103 GMBH)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche B-1 Term Loan, 2.688%, 12/04/13</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,224</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 810,671</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>United Subcontractors, Inc. Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.43% &#150; 6.80%, 12/27/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,275</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>117,548</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,745,209</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Marsico Parent Company, LLC Term Loan, 4.75% &#150; 7.50%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/15/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>465</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>220,932</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nuveen Investments, Inc. Term Loan, 4.232% &#150; 3.438%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11/13/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,489</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>964,878</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,185,810</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Chemicals &#151; 7.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Brenntag Holding Gmbh &amp; Co. KG:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Acquisition Facility 1, 2.447% &#150; 3.501%, 1/20/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>393</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>314,182</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility 3B (Second Lien), 5.501%, 7/17/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>558,333</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility B2, 2.447% &#150; 3.501%, 1/20/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,607</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,285,818</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility B6A and B6B, 3.597%, 11/24/37</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>517,663</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cognis GMBH:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility B (French) 3.65%, 11/16/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>197</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>191,047</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility A 3.65%, 11/17/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>803</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>786,486</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ElectricInvest Holding Company Limited (Viridian</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Group PLC) Junior Term Facility:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.499%, 4/20/12</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,787</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,513,467</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.395%, 12/21/12</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,704,218</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Huish Detergents Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan (Second Lien), 4.76%, 10/26/14</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>611,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche B Term Loan, 2.18%, 4/26/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,734</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,529,918</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ineos US Finance LLC Term:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A4 Facility, 7.001%, 12/14/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,385</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>706,267</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B2 Facility, 7.501%, 12/16/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>631</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>332,342</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C2 Facility, 8.001%, 12/16/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>631</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>332,342</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lucite International Group Holdings Limited PIK,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.405%, 7/03/14</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,218</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,495,306</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Matrix Acquisition Corp. (MacDermid, Incorporated)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche C Term Loan, 3.209%, 12/15/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,747</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,132,508</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PQ Corporation (fka Niagara Acquisition, Inc.):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan (Second Lien), 7.54%, 7/30/15</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>915,001</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan (First Lien), 4.29% &#150; 4.47%, 7/31/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,729</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,787,741</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Rockwood Specialties Group, Inc. Tranche E Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.178%, 7/30/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,235</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,107,471</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Solutia Inc. Loan, 8.50%, 2/28/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,985</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,550,722</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TPG Spring (UK) Limited (British Vita Plc) Mezzanine,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11.657%, 7/22/13</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,148</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,553</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18,375,635</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Services &amp; Supplies &#150; 2.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aramark Corporation:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility Letter of Credit, 0.311% &#150; 2.025%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1/26/14</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>155</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>140,844</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S. Term Loan, 3.095%, 1/26/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,437</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,216,975</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EnviroSolutions Real Property Holdings, Inc. Initial</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 10.50%, 7/07/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,017</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>958,224</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>John Maneely Company Term Loan, 3.71% &#150; 4.389%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/09/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,388</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>994,145</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SIRVA Worldwide, Inc. Loan (Second Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12%, 5/12/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>127</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,334</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Synagro Technologies, Inc. Term Loan (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.43% &#150; 2.46%, 4/02/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,981</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,287,714</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>West Corporation Term B-2 Loan, 2.808% &#150; 2.864%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10/24/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>438</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>367,568</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,971,804</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>18 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="7%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Computers &amp; Peripherals &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Intergraph Corporation:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Term Loan (First Lien), 3.256%, 5/29/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,169</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,063,508</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Term Loan, 6.438% &#150; 7.256%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11/28/2014</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>615,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,679,133</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Construction &amp; Engineering &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Airport Development and Investment Limited (BAA)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility (Second Lien), 5.538%, 4/07/11</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>566</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>340,039</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Brand Energy &amp; Infrastructure Services, Inc. (FR Brand</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Acquisition Corp.):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Lien Term Loan B, 3.188% &#150; 3.50%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2/7/2014</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>987</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>661,389</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Term Loan, 6.438% &#150; 7.313%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2/7/2015</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>385,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Synthetic Letter of Credit Term Loan (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.125% &#150; 2.375%, 2/07/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>335,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,721,428</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Construction Materials &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Headwaters Incorporated Term Loan B1 (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.22%, 4/30/11</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,234</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>765,313</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Containers &amp; Packaging &#151; 4.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Atlantis Plastic Films, Inc. Term Loan (Second Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12.25%, 3/22/12 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Graham Packaging Company, L.P. New Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.688 &#150; 2.813%, 10/07/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>915</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>821,813</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Graphic Packaging International, Inc. Incremental</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 3.21% &#150; 3.958%, 5/16/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,713</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,483,982</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Modelo 3 S.a.r.l. (Mivisa) Tranche B2 Term Facility,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.452%, 6/03/15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>955,279</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>OI European Group B.V. Tranche D Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.492%, 6/14/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,915</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,195,908</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pregis Corporation Term Loan B2 (Euro),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.459%, 9/30/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>471</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>486,461</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Smurfit Kappa Acquisitions (JSG):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C1 Term Loan Facility, 3.116% &#150; 3.132%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7/16/2015</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>776,495</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B1, 2.866% &#150; 4.912%, 7/16/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>776,495</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Smurfit-Stone Container Canada, Inc., Tranche C-1</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 2.82%, 11/01/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,041</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Smurfit-Stone Container Debtor in Possession, Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10%, 7/28/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,340</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,348,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Smurfit-Stone Container Enterprises, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deposit Funded Facility, 4.50%, 11/01/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,352</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche B, 2.82%, 11/01/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,490</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche C, 2.82%, 11/01/11</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19,980</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Smurfit-Stone Container Revolving Credit:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.50% &#150; 4.50%, 11/01/09</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>46,777</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.50% &#150; 5.0%, 11/01/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,512</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Solo Cup Co. Term B1 Loan, 4.692% &#150; 5.75%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2/27/2011</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,397</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,300,202</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,253,162</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Distributors &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Keystone Automotive Operations, Inc. Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.948% &#150; 5.75%, 1/12/12</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,660</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>663,934</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Consumer Services &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Coinmach Corporation Term Loan, 4.26%, 11/14/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,552</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,786,105</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Coinmach Laundry Corp Delay Draw Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.44%, 11/14/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>348,333</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,134,438</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="6%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>J.G. Wentworth, LLC Loan (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.47%, 4/04/14 (d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 380,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Professional Service Industries, Inc. Term Loan</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(First Lien), 3.19%, 10/31/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>649</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>564,323</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>944,323</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Telecommunication Services &#151; 4.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BCM Ireland Holdings Limited (Eircom):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility B, 2.848%, 8/14/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,970</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,669,378</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility C, 3.098%, 8/14/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,970</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,669,564</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility D, 5.223%, 2/14/16</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>522,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cavtel Holdings, LLC Term Loan, 1.0% &#150; 8.50%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/31/12</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>388</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>157,656</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hawaiian Telcom Communications, Inc. Tranche C</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 4.75%, 5/30/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,208</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>588,060</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nordic Telephone Company Holdings APS Euro Facility:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B2, 2.637%, 4/06/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>885</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,080,935</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C2, 3.262%, 4/06/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,058</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,291,507</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PAETEC Holding Corp. Replacement Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.928% &#150; 4.75%, 2/28/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>737</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>626,420</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Time Warner Telecom Holdings Inc. Term Loan B Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.43%, 1/07/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,124</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,020,921</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wind Telecomunicazioni S.P.A:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A1 Term Loan Facility, 2.499% &#150; 2.521%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9/22/2012</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>848</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>989,979</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B1 Term Loan Facility, 3.249%, 9/22/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,172,599</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C1 Term Loan Facility, 4.249%, 9/22/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,172,599</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,962,243</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Astoria Generating Co. Acquisitions, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Term Loan C, 4.20%, 8/23/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,276,875</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B Facility, 2.20% &#150; 4.0%, 2/23/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>407</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>370,433</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TPF Generation Holdings, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Lien Term Loan, 2.428%, 12/15/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>441</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>409,551</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Synthetic Letter of Credit Deposit (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.12% &#150; 2.10%, 12/15/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>151</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>139,682</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Synthetic Revolving Deposit, 1.12% &#150; 2.10%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/15/2011</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>47</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,787</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,240,328</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electrical Equipment &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Electrical Components International Holdings Company</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(ECI) Term Loan (Second Lien), 11.50%, 5/01/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Generac Acquisition Corp. First Lien Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.995%, 11/10/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,464</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>943,028</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>993,028</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electronic Equipment, Instruments &amp; Components &#151; 1.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Flextronics International Ltd.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A Closing Date Loan, 2.739% &#150; 3.458%, 10/01/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,680</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,050,113</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A-1 Delay Draw Term Loan, 3.381%, 10/01/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>770</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>589,113</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Matinvest 2 SAS (Deutsche Connector) Second Lien</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility, 4.989%, 12/22/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>180,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Safenet, Inc. Loan (Second Lien), 6.46%, 4/12/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>276,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tinnerman Palnut Engineered Products, LLC Second</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lien Term Loan, 13%, 11/01/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,349</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>70,468</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,165,944</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Energy Equipment &amp; Services &#151; 1.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dresser, Inc. Term Loan (Second Lien), 6.988%, 5/04/15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>817,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MEG Energy Corp. Initial Term Loan, 3.22%, 4/03/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>485</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>409,825</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Trinidad USA Partnership LLP U.S. Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.009%, 5/01/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,455</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,178,550</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,405,875</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>19</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="6%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Food &amp; Staples Retailing &#151; 3.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AB Acquisitions UK Topco 2 Ltd. Facility B2 UK Borrower,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.61%, 7/09/15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,625,856</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Advantage Sales &amp; Marketing, Inc. (ASM Merger</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sub, Inc.) Term Loan, 2.43 &#150; 2.49%, 3/29/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>903</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>776,679</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Birds Eye Iglo Group Limited (Liberator Midco Limited):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility B1 (EUR), 3.223%, 10/27/19</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>585,945</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility C1 (EUR), 3.598%, 10/27/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>489</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>572,718</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sterling Tranche Loan (Mezz), 4.0% &#150; 4.849%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11/2/2015</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>403</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>385,553</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>DS Waters of America, Inc. Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.448%, 10/29/12</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>442,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>McJunkin Corporation Term Loan, 4.47%, 1/31/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>978</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>830,061</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Roundy&#146;s Supermarkets, Inc. Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.18% &#150; 3.22%, 11/03/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>WM. Bolthouse Farms, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>504</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>457,799</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Term Loan, 5.928%, 12/16/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>349,167</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan (First Lien), 2.813%, 12/16/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>923</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>808,721</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,834,999</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Food Products &#151; 3.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dole Food Company, Inc:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit-Linked Deposit, 1.139% &#150; 6.861%, 4/12/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>193</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>182,627</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche B Term Loan, 7.25% &#150; 8%, 4/12/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>338</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>320,073</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FSB Holdings, Inc. (Fresh Start Bakeries) Term Loan</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(Second Lien), 6.188%, 3/29/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Solvest, Ltd. (Dole) Tranche C Term Loan, 7.25% &#150; 8%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/12/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,258</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,192,619</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sturm Foods, Inc. Initial Term Loan:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Loan, 3.438% &#150; 3.625%, 1/31/14 (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>831</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>576,406</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien, 7.125%, 7/31/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>225,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>United Biscuits Holdco Limited Facility:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B1, 3.373%, 1/23/15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,651</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,915,002</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B2, 4.843%, 12/14/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>535</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>565,850</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wm. Wrigley Jr. Company Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.50%, 10/06/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,996,574</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,224,151</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Health Care Equipment &amp; Supplies &#151; 3.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Arizant Inc. Term Loan, 2.928% &#150; 3.0% 7/31/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,621</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,359,244</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bausch &amp; Lomb Incorporated:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Delayed Draw Term Loan, 1.50% &#150; 4.47%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/24/2015</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>74</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>63,844</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Parent Term Loan, 4.47%, 4/24/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>389</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>336,248</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Biomet, Inc. Euro Term Loan, 3.959% &#150; 4.557%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/25/15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,534</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,034,553</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>DJO Finance LLC (ReAble Therapeutics Fin LLC)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 3.428% &#150; 4.22%, 5/20/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,492</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,314,096</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hologic, Inc. Tranche B Term Loan, 3.75%, 3/31/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>568</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>536,460</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,644,445</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Health Care Providers &amp; Services &#151; 4.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CCS Medical, Inc. (Chronic Care) Term Loan (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.97%, 9/30/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>215</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100,836</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CHS/Community Health Systems, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Delayed Draw Term Loan, 1.0% &#150; 2.678%, 7/25/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>229</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>206,230</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Funded Term Loan, 2.678% &#150; 3.506%, 7/25/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,491</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,042,503</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HCA Inc. Tranche A-1 Term Loan, 3.22%, 11/17/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,494</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,349,990</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HealthSouth Corporation Term Loan, 2.93% &#150; 2.96%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/10/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,216</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,994,382</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Opica AB (Capio) Tranche C2, 3.388%, 4/15/16</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,088</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,181,769</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Surgical Care Affiliates, LLC Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.22%, 12/29/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>494</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>408,552</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Vanguard Health Holding Company II, LLC (Vanguard</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Health System, Inc.) Replacement Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.678%, 9/23/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>966</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>904,008</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,188,270</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="6%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Hotels, Restaurants &amp; Leisure &#151; 3.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BLB Worldwide Holdings, Inc. (Wembley, Inc.):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Priority Term Loan, 4.75%, 7/18/11</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,418</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 725,463</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Priority Term Loan, 7.06%, 7/18/12 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>93,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Golden Nugget, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Additional Term Advance (First Lien), 2.0% &#150; 2.46%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/30/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>227</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>103,769</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Term Loan, 3.69%, 12/31/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Advance (First Lien), 2.44%, 6/30/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>477</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>218,352</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Green Valley Ranch Gaming, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Term Loan, 3.71%, 8/16/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>90,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan (New), 3.149% &#150; 4%, 2/16/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>472</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>190,918</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Harrah&#146;s Operating Company, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B-1 Loan, 3.428% &#150; 4.092%, 1/28/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>314</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>221,789</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B-2 Loan, 3.438% &#150; 4.092%, 1/28/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,361</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,672,428</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B-3 Loan, 3.428% &#150; 4.092%, 1/28/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>902</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>640,852</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>OSI Restaurant Partners, LLC Pre-Funded RC Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.14% &#150; 4.50%, 6/14/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,451</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Penn National Gaming, Inc. Term Loan B,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.18% &#150; 2.99%, 10/03/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,619</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,436,872</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>QCE, LLC (Quiznos) Term Loan (Second Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.982%, 11/05/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>775,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,351,644</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Household Durables &#151; 2.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American Residential Services LLC Term Loan</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(Second Lien), 2.0% &#150; 10%, 4/17/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,030</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,745,380</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Berkline/BenchCraft, LLC, Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.178%, 11/03/11 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>95</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,735</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Jarden Corporation Term Loan B3, 1.22% &#150; 3.25%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1/24/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,228</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,187,147</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Simmons Bedding Company Tranche D Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.50%, 12/19/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,172,501</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yankee Candle Company, Inc. Term Loan, 2.44% &#150;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.22%, 2/06/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>947</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>785,529</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,895,292</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Household Products &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>VI-JON, Inc. (VJCS Acquisition, Inc.) Tranche B</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 2.697%, 4/24/14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>650,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>IT Services &#151; 3.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Amadeus IT Group SA/Amadeus Verwaltungs GmbH:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B3 Facility, 3.107%, 6/30/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>615</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>554,943</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B4 Facility, 3.107%, 6/30/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>496</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>448,080</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term C3 Facility, 3.607%, 6/30/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>615</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>554,943</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term C4 Facility, 3.607%, 6/30/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>496</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>448,080</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Audio Visual Services Group, Inc. Loan (Second Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.72%, 8/28/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,020</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>56,095</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ceridian Corp U.S. Term Loan, 3.447%, 11/09/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,977</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,433,501</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Data Corporation Initial Tranche:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B-1 Term Loan, 3.178% &#150; 3.19%, 9/24/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,466</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,796,019</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B-2 Term Loan, 3.19% &#150; 3.178%, 9/24/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>495</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>360,465</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B-3 Term Loan, 3.178% &#150; 3.19%, 9/24/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>980</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>713,257</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>RedPrairie Corporation:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Loan 7.736%, 1/20/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>612,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan B, 4.25% &#150; 5.25%, 7/20/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>849</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>581,296</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SunGard Data Systems Inc. (Solar Capital Corp.)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>New U.S. Term Loan, 2.219% &#150; 2.991%, 2/28/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,780</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,593,715</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,152,894</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Independent Power Producers &amp; Energy Traders &#151; 3.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Texas Competitive Electric Holdings Company, LLC (TXU)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Tranche:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B-1 Term Loan, 3.928% &#150; 3.969%, 10/10/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,490</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,676,445</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B-2 Term Loan, 3.928% &#150; 3.969%, 10/10/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,462</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,687,721</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B-3 Term Loan, 3.928% &#150; 3.969%, 10/10/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,004</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,369,988</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,734,154</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>20 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="6%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Alliant Holdings I, Inc. Term Loan, 4.232%, 8/21/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>985</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 763,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Conseco, Inc. Term Loan, 1.0% &#150; 6.50%, 10/10/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>730</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>292,081</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,055,456</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Internet &amp; Catalog Retail &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FTD Group, Inc. Tranche B Term Loan, 6.75%, 8/04/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>746</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>641,775</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Oriental Trading Company, Inc. Loan (Second Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.43%, 1/31/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>95,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>736,775</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Leisure Equipment &amp; Products &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24 Hour Fitness Worldwide, Inc. Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.93% &#150; 3.67%, 6/08/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>970</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>630,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kerasotes Showplace Theatres, LLC Term B2,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5%, 10/28/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>554</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>332,439</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>962,939</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Life Sciences Tools &amp; Services &#151; 1.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Life Technologies Corporation Term B Facility,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.25%, 11/20/15</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,985</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,971,009</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Machinery &#151; 2.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CI Acquisition, Inc. (Chart Industries) Term Loan B,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.438%, 10/17/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>222</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>193,333</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LN Acquisition Corp. (Lincoln Industrial):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Delayed Draw Term Loan (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.97%, 7/11/2014</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>268</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>214,364</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial U.S. Term Loan (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.97%, 7/11/2014</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>715</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>571,636</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NACCO Materials Handling Group, Inc. Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.428% &#150; 4.595%, 3/21/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>486</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>179,913</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Navistar International Corporation:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Revolving Credit-Linked Deposit, 3.611% &#150; 4.794%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1/19/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,333</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,078,095</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Advance, 3.678%, 1/19/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,667</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,964,760</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Oshkosh Truck Corporation Term B Loan, 7.15% &#150; 7.32%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/06/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,118</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,731,685</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Standard Steel, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Delayed Draw Term Loan, 8.25%, 7/02/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,998</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Term Loan, 9%, 7/02/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>370</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>203,418</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,178,202</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Manufacturing &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Blount, Inc. Term Loan B, 2.201% &#150; 3.25%, 8/09/10</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>536</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>490,471</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Marine &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Delphi Acquisition Holding I B.V. (fka Dockwise) Facility:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B1, 3.22%, 1/12/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,227</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>658,574</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C1, 4.095%, 1/11/16</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,227</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>658,574</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>D1, 5.72%, 1/11/16</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,650</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>453,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,770,898</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 28.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Acosta, Inc. Term Loan, 2.68%, 7/28/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,191</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,022,008</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Affinion Group Holdings, Inc. Loan, 9.273%, 3/01/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>975</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>555,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AlixPartners, LLP Tranche C Term Loan, 2.46% &#150; 3.14%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10/12/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>931</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>852,294</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Alpha Topco Limited (Formula One):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility B1, 2.803%, 12/31/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>571</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>341,904</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility B2, 2.803%, 12/31/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>393</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>235,059</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Amsterdamse Beheer &#151; En Consultingmaatschappij B.V.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(Casema) Casema:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B1 Term Loan Facility, 4.031%, 11/02/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>625</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750,033</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C Term Loan Facility, 4.531%, 11/02/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>625</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750,033</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Atlantic Broadband Finance, LLC Tranche B-2</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 3.47%, 9/01/11</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,945</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,741,047</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="6%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media (continued)</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bresnan Communications,:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LLC Additional Term Loan B (First Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.45% &#150; 3.11%, 6/30/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,138,541</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LLC Second Lien Term Loan, 4.97% &#150; 4.99%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/29/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>197,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CSC Holdings Inc (Cablevision) Incremental Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.198%, 3/29/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,140</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,971,134</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Catalina Marketing Corporation Initial Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.22%, 10/01/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,670</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,461,173</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cengage Learning Acquisitions, Inc. (Thomson Learning):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 2.93%, 7/03/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,473</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,082,306</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche 1 Incremental Term Loan, 7.50%, 7/03/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,219</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,101,236</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cequel Communications, LLC (aka Cebridge)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 2.46% &#150; 2.478%, 11/05/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,875</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,401,078</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Charter Communications Operating, LLC Replacement</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 5.23% &#150; 6.25%, 3/06/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,305</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,096,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Charter Communications Term Loan B1, 5.23% &#150; 6.25%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/25/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>704,297</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Clarke American Corp. Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.928% &#150; 3.72%, 6/30/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,967</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,316,236</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cumulus Media, Inc. Replacement Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.21%, 6/11/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,383</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>691,463</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dex Media West LLC Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 10/24/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,001,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Discovery Communications Holding, LLC Term B Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.22%, 5/14/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,970</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,840,906</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FoxCo Acquisition Sub, LLC Term Loan, 7.25%, 7/14/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>899</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>539,423</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Getty Images, Inc Initial Term Loan, 6.25%, 7/02/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>488</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>474,703</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gray Television, Inc. Term Loan B &#150; DD, 3% &#150; 4%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/31/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>845</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>352,712</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HIT Entertainment, Inc. 2nd Lien, 6.74%, 2/26/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HMH Publishing Company Limited</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(fka Education Media):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mezzanine, 5.256% &#150; 5.50%, 11/14/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,195</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,510,949</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche A Term Loan, 8.256%, 6/12/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,623</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,613,257</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hanley-Wood, LLC (FSC Acquisition) Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.688% &#150; 2.71%, 3/08/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,219</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>678,210</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hargray Acquisition Co., DPC Acquisition LLC/</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HCP Acquisition:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan (First Lien), 3.486%, 6/27/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>982</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>836,832</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan (Second Lien), 6.736%, 1/29/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>240,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Idearc Inc. (Verizon) Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.25%, 11/17/14 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,101</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>427,244</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Insight Midwest Holdings, LLC B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.50%, 4/07/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>638,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kabel Deutschland Holding GMBH A Facility,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.723%, 6/01/12</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,760,222</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Knology, Inc. Term Loan, 2.751%, 6/30/12</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>484</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>412,636</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lavena Holding 3 GmbH (Prosiebensat.1</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Media AG) Facility:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>B1, 4.589%, 6/28/15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>337</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>65,729</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C1, 4.839%, 6/30/16</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>674</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>131,457</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Liberty Cablevision of Puerto Rico, Ltd. Initial Term</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility, 2.451%, 6/17/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,474</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>884,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Local TV Finance, LLC Term Loan, 2.43%, 5/07/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>742</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>341,524</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MCC Iowa LLC (Mediacom Broadband Group):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche A Term Loan, 1.83%, 3/31/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>665</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>641,749</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche D-1 Term Loan, 2.08%, 1/31/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,216</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,073,949</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MCNA Cable Holdings LLC (OneLink Communications)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan (PIK facility), 8.31%, 3/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,855</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,149,871</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mediannuaire Holding (Pages Jaunes):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan B2, 3.913%, 1/11/15</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>453</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>239,365</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan C, 4.413%, 1/11/16</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>938</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>495,199</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan D, 5.913%, 1/11/17</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>133,964</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>21</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV>

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<A name="page_23"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="6%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media (continued)</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Metro-Goldwyn-Mayer Inc. Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.678%, 4/09/12</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,915</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 921,655</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mission Broadcasting, Inc. Term B Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.97%, 10/01/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,776</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,065,783</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Multicultural Radio Broadcasting, Inc. Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.239% &#150; 5%, 12/18/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>327</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>212,550</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NTL Cable Plc Term Loan, 3.889%, 11/19/37</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,779</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,165,784</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NV Broadcasting, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien, 5.25%, 11/03/14 (d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan (First Lien), 5.25%, 11/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>822</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>205,367</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Newsday, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fixed Rate Term Loan, 9.75%, 8/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,455,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate Term Loan, 6.631%, 8/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,175,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nexstar Broadcasting, Inc Term B Loan, 2.597% &#150; 2.789%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10/01/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,878</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,126,685</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nielsen Finance LLC Dollar Term Loan, 2.469%, 8/09/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,808</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,216,449</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Parkin Broadcasting, LLC Term Loan, 5.25%, 11/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>169</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42,127</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Penton Media, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan (Second Lien), 6.039%, 2/01/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>96,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan (First Lien), 2.678% &#150; 3.289%, 2/1/2013</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,103</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>554,925</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Puerto Rico Cable Acquisition Company Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(D/B/A Choice TV) Term Loan (Second Lien),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.938%, 2/15/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>692</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>311,538</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Quebecor Media Term Loan B, 3.131%, 1/17/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>726</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>631,294</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sunshine Acquisition Limited (aka HIT Entertainment)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Facility, 3.49%, 7/31/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,098</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>570,986</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TWCC Holding Corp. Term Loan, 7.25%, 9/14/15</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,244</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,230,063</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Telecommunications Management, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Multi-Draw Term Loan, 3.928%, 6/30/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>233</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>142,059</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 3.928%, 6/30/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>924</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>563,564</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>UPC Financing Partnership M Facility,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.137%, 11/19/37</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,767</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,050,373</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Virgin Media Investment Holdings Limited (fka NTL)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C Facility, 4.919%, 7/17/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,701,260</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wallace Theater Corporation (Hollywood Theaters):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Lien Term Loan, 5.50%, 7/31/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,746</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,370,414</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Term Loan, 9.25%, 1/31/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,625,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yell Group Plc Facility B2 (Euro), 3.973%, 4/30/11</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,221,388</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>69,874,457</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Metals &amp; Mining &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Algoma Steel Inc. Term Loan, 2.93%, 6/20/13</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,944</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,091,753</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Euramax International, Inc. Domestic Loan</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(Second Lien), 13%, 6/29/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,220</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,408</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,116,161</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multi-Utilities &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FirstLight Power Resources, Inc. (fka NE Energy, Inc.):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Lien Term Loan B, 3.75%, 11/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,230</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,082,781</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Second Lien Term Loan, 5.75%, 5/01/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>480,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Synthetic Letter of Credit, 1.10% &#150;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.65%, 11/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>159</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>139,512</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mach Gen, LLC Synthetic Letter of Credit Loan</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(First Lien), 0.982% &#150; 2.25%, 2/22/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>69</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>57,488</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,759,781</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multiline Retail &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dollar General Corporation Tranche B-1 Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.178% &#150; 3.789%, 7/07/14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,150,348</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="6%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 2.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Big West Oil, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Delayed Advance Loan, 6.50%, 5/15/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>550</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 431,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Initial Advance Loan, 6.50%, 5/15/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>438</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>343,437</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Coffeyville Resources, LLC:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Funded Letter of Credit, 3.15% &#150; 5.60%, 12/28/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>324</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>257,568</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche D Term Loan, 8.75%, 12/30/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,042</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>827,496</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Drummond Company, Inc. Term Advance,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.688%, 2/14/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,164,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Niska Gas Storage:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Canada ULC Canadian Term Loan B,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.21%, 5/12/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>452</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>405,816</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S., LLC Term B Loan, 2.21%, 5/12/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>47</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42,649</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S., LLC Wild Goose Acquisition Draw-U.S. Term B,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.203%, 5/12/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28,890</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Vulcan Energy Corporation (Fka Plains Resources Inc)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B3 Loan, 5.50%, 8/12/11</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,627,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,129,106</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Paper &amp; Forest Products &#151; 1.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Georgia-Pacific LLC Term B Loan, 2.428% &#150; 3.293%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/20/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,799</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,526,734</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NewPage Corporation Term Loan, 4.25% &#150; 5%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/22/14</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,584</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,221,601</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Verso Paper Finance Holdings LLC Loan, 6.759 &#150; 7.509%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2/01/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>351</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,568</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,765,903</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Personal Products &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American Safety Razor Company, LLC Loan</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(Second Lien), 6.68%, 1/30/14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,310,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Pharmaceuticals &#151; 1.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Catalent Pharma Solutions, Inc. (fka Cardinal Health</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>409, Inc.) Euro Term Loan, 3.223%, 4/15/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,456</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,339,905</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Warner Chilcott Company, Inc. Acquisition Date</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche B, 2.428% &#150; 3.22%, 1/18/12</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,046</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>978,833</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tranche C, 2.428%, 1/18/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>414</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>387,730</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,706,468</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Professional Services &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Booz Allen Hamilton Inc. Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.50%, 7/31/15</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>998</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>975,260</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Real Estate Management &amp; Development &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Enclave First Lien Term Loan, 6.14%, 3/01/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>300,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Georgian Towers Term Loan, 6.14%, 3/01/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>210,058</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pivotal Promontory, LLC Second Lien Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12%, 8/31/11 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>37,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>547,558</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Road &amp; Rail &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>RailAmerica, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Canadian Term Loan, 5.20%, 8/14/09</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>196</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>172,208</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S. Term Loan, 5.20%, 8/14/09</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,054</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,807,792</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,980,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Software &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bankruptcy Management Solutions, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Lien Term Loan, 4.43%, 7/31/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>945</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>529,339</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan (Second Lien), 6.678%, 7/31/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>488</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110,906</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>640,245</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Specialty Retail &#151; 1.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Adesa, Inc. (KAR Holdings, Inc.) Initial Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.68% &#150; 3.47%, 10/20/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,395</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,156,611</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Burlington Coat Factory Warehouse Corporation</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term Loan, 2.68%, 5/28/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>517</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>356,711</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>22 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV>

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<A name="page_24"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="6%"></TD>
     <TD width="11%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Loan Interests</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Specialty Retail (concluded)</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>General Nutrition Centers, Inc. Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.25% &#150; 3.49%, 9/16/13</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>988</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 828,754</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>OSH Properties LLC (Orchard Supply) Term Loan B,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.902%, 12/21/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>975,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,317,076</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Textiles, Apparel &amp; Luxury Goods &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Renfro Corporation Tranche B Term Loan, 3.68% &#150; 4.48%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10/05/13</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>435</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>174,003</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trading Companies &amp; Distributors &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Beacon Sales Acquisition, Inc. Term B Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.438%, 9/30/13</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,194</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>955,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Transportation Infrastructure &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SBA Telecommunications Term Loan, 2.438 &#150; 3.208%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11/01/10</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,993</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,773,966</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Wireless Telecommunication Services &#151; 1.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cricket Communications, Inc. (aka Leap Wireless)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Term B Loan, 5.75%, 6/16/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,765</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,679,302</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Digicel Group Term Loan B, 3.75%, 3/01/12</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>233,125</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetroPCS Wireless, Inc. New Tranche B Term Loan,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.688% &#150; 3.438%, 11/03/13</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,614</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,503,164</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,415,591</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Floating Rate Loan Interests &#151; 106.4%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>260,785,092</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>E*Trade Financial Corp. (f)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>121,011</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>173,046</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Services &amp; Supplies &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sirva Common Stock</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>554</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,770</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Paper &amp; Forest Products &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ainsworth Lumber Co. Ltd. (f)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>55,855</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,786</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ainsworth Lumber Co. Ltd. (c)(f)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>62,685</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>44,847</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>84,633</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Common Stocks &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>260,449</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Marsico Parent Superholdco, LLC, 16.75% (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Stocks &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Warrants (g)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Machinery &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Synventive Molding Solutions (expires 1/15/13)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Warrants &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="17%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Beneficial Interest</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Interests (h)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Health Care Providers &amp; Services &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Critical Care Systems International, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD 947</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 191</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Household Durables &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Berkline Benchcraft Equity LLC</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,155</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Other Interests &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>191</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Long-Term Investments</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $478,352,869) &#151; 140.4%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>344,094,334</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Money Market Fund &#151; 1.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund, 0.64% (i)(j)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,151,730</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,151,730</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $3,151,730) &#151; 1.3%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,151,730</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Options Purchased</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Over-the-Counter Put Options &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Marsico Parent Superholdco LLC, expiring</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December 2009 at USD 942.86, Broker Goldman</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sachs Group, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Options Purchased (Cost &#151; $25,422) &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments (Cost &#151; $481,530,021*) &#151; 141.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>347,287,664</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities in Excess of Other Assets &#151; (17.7)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(43,343,601)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Shares, at Redemption Value &#151; (24.0)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(58,811,150)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shares &#151; 100.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 245,132,913</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* The cost and unrealized appreciation (depreciation) of investments as of April 30,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009, as computed for federal income tax purposes, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="42%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 481,568,756</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized appreciation</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,632,062</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(135,913,154)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(134,281,092)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a) Variable rate security. Rate shown is as of report date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(b) Represents a payment-in-kind security which may pay interest/dividends in addi-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tional par/shares.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(c) Security exempt from registration under Rule 144A of the Securities Act of 1933.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>These securities may be resold in transactions exempt from registration to qualified</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>institutional investors.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(d) Issuer filed for bankruptcy and/or is in default of interest payments.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(e) Restricted securities as to resale, representing 8.9% of net assets were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="34%"></TD>
     <TD width="22%"></TD>
     <TD width="23%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Acquisition</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date(s)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Cost</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Colombia Government</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International Bond,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.866%, 3/17/13</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2/15/06</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,289,727</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,128,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Costa Rica Government</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International Bond,</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8/30/04 &#150;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.335%, 5/15/09</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11/01/04</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,202,951</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,188,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nordic Telephone</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Co. Holdings ApS,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.872%, 5/01/16</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/26/06</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,867,951</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,667,108</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pemex Project</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Funding Master Trust,</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8/27/04 &#150;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.931%, 10/15/09</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/15/04</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,760,205</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,700,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Republic of Venezuela,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.101%, 4/20/11</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10/26/04</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,810,281</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,120,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$22,931,115</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$21,803,108</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>23</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (concluded) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(f) Non-income producing security.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(g) Warrants entitle the Fund to purchase a predetermined number of shares of com-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>mon stock and are non-income producing. The purchase price and number of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>shares are subject to adjustment under certain conditions until the expiration date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(h) Other interests represent beneficial interest in liquidation trusts and other reorgani-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>zation entities and are non-income producing.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(i) Represents the current yield as of report date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(j) Investments in companies considered to be an affiliate of the Fund, for purposes of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Section 2(a)(3) of the Investment Company Act of 1940, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="53%"></TD>
     <TD width="28%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Affiliate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Activity</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,151,730</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$11,261</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency exchange contracts as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="6%"></TD>
     <TD width="15%"></TD>
     <TD width="7%"></TD>
     <TD width="16%"></TD>
     <TD width="19%"></TD>
     <TD width="15%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Currency</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Currency</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Settlement</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Purchased</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Sold</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counterparty</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Depreciation)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>772,203</FONT>&nbsp;</TD>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MXN 10,416,500</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Citibank NA</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/10/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 23,460</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD59,614,704</FONT>&nbsp;</TD>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR 46,282,500</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Citibank NA</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/20/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,617,719)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,219,745</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>920,000</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>UBS AG</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/20/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,572</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,919,989</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,663,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>UBS AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/10/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(457,321)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (2,049,008)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; sold protection outstanding as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="15%"></TD>
     <TD width="11%"></TD>
     <TD width="13%"></TD>
     <TD width="14%"></TD>
     <TD width="11%"></TD>
     <TD width="15%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Receive</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rating</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Depreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BAA Ferovial</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Junior Term</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.00%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2012</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AA&#150;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GPB 1,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(422,017)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using Standard &amp; Poor&#146;s rating of the issuer.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The maximum potential amount the Fund may pay should a negative credit</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>event take place as defined under the terms of the agreement. See Note 1 of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Notes to Financial Statements.</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Currency Abbreviations:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="25%"></TD>
     <TD width="74%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>EUR</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Euro</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>GBP</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>British Pound</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>MXN</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mexican New Peso</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S. Dollar</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Accounting Standards Board Statement of Financial Accounting Standards</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>No. 157, &#147;Fair Value Measurements&#148; clarifies the definition of fair value, establishes</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>a framework for measuring fair values and requires additional disclosures about the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>use of fair value measurements. Various inputs are used in determining the fair</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of investments, which are as follows:</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1 &#151; price quotations in active markets/exchanges for identical securities</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2 &#151; other observable inputs (including, but not limited to: quoted prices for</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>similar assets or liabilities in markets that are active, quoted prices for identical</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or similar assets in markets that are not active, inputs other than quoted prices</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that are observable for the assets or liabilities (such as interest rates, yield</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>curves, volatilities, prepayment speeds, loss severities, credit risks and default</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rates) or other market-corroborated inputs)</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3 &#151; unobservable inputs based on the best information available in the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>circumstance, to the extent observable inputs are not available (including the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s own assumptions used in determining the fair value of investments)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The inputs or methodology used for valuing securities are not necessarily an indica-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tion of the risk associated with investing in those securities. For information about</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Fund&#146;s policy regarding valuation of investments and other significant accounting</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>policies, please refer to Note 1 of the Notes to Financial Statements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following table summarizes the inputs used as of April 30, 2009 in determining</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the fair valuation of the Fund&#146;s investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="24%"></TD>
     <TD width="33%"></TD>
     <TD width="21%"></TD>
     <TD width="21%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Valuation</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Inputs</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments*</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,364,562</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 41,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>256,614,570</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26,032</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (2,075,040)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>87,266,932</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(422,017)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$347,246,064</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 67,632</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (2,497,057)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* Other financial instruments are options, swaps and foreign currency exchange</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>contracts. Swaps and foreign currency exchange contracts are valued at the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>unrealized appreciation/depreciation on the instrument and options are shown</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>at market value.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following is a reconciliation of investments for unobservable inputs (Level 3)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that were used in determining fair value:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="28%"></TD>
     <TD width="21%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Balance, as of October 31, 2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 119,862,229</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (543,254)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accrued discounts/premiums</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>281,787</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Realized gain (loss)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(11,790,834)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Change in unrealized appreciation/</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>depreciation</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(21,055,829)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>121,237</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net purchases (sales)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(25,041,257)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net transfers into Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,010,836</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Balance, as of April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 87,266,932</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (422,017)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Included in the related net change in unrealized appreciation/depreciation on</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Statements of Operations.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>24 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate Income Strategies Fund, Inc. (PSW)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="62%"></TD>
     <TD width="8%"></TD>
     <TD width="10%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Trusts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Building Products &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C8 Capital SPV Ltd., 6.64% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>980</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 439,736</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 5.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ameriprise Financial, Inc., 7.518%, 6/01/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,094,740</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lehman Brothers Holdings Capital Trust V,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.64% (b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Capital Trust III, 8.25% (b)(c)(e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>725</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>493,413</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Capital Trust IV, 2.32%, 6/01/67 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,390</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,371,926</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,960,239</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 5.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of Ireland Capital Funding II, LP, 5.571% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,015</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>402,698</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of Ireland Capital Funding III, LP, 6.107% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,150</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>408,130</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc, 5.926% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>759,202</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Empire Capital Trust II, 8.277%, 6/01/27</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>910</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>541,284</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>National City Preferred Capital Trust I, 12% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>259,590</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>875</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>789,393</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SunTrust Preferred Capital I, 5.853% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>260,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,420,297</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 4.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Farm Credit Bank of Texas Series 1, 7.561% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>599,280</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase Capital XXV, 6.80%, 10/01/37 (e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,525</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,848,603</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,447,883</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 1.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPL Capital Funding, 6.70%, 3/30/67 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>870,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 52.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AXA SA, 6.379% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,585</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,430,705</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ace Capital Trust II, 9.70%, 4/01/30 (e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,510</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,180,865</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Allstate Corp. (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.50%, 5/15/57 (e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,780,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series B, 6.125%, 5/15/67 (f)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,625</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,443,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American International Group, Inc., 6.25%, 3/15/87 (f)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,425</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>303,125</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Chubb Corp., 6.375%, 3/29/67 (c)(g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,475</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,705,827</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Farmers Exchange Capital, 7.05%, 7/15/28 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,110</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,818,821</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Security Assurance Holdings Ltd., 6.40%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/15/66 (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,740</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>469,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Genworth Financial, Inc., 6.15%, 11/15/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>104,740</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Great West Life &amp; Annuity Insurance Co., 7.153%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/16/46 (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>987,840</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Liberty Mutual Group, Inc. (a)(c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 3/15/37</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,550</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>938,716</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.75%, 6/15/88</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,100,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lincoln National Corp. (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 5/17/66</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>960,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.05%, 4/20/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>362,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc., 6.40%, 12/15/66 (e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,225</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,260,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nationwide Life Global Funding I, 6.75%, 5/15/67 (e)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,450</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>962,370</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Oil Casualty Insurance Ltd., 8%, 9/15/34 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>915</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>552,964</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Progressive Corp., 6.70%, 6/15/37 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,436,234</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reinsurance Group of America, 6.75%, 12/15/65 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>342,636</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swiss Re Capital I LP, 6.854% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,225</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>878,875</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Travelers Cos., Inc., 6.25%, 3/15/67 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,539,861</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust II, 6.45%, 12/15/65 (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>972,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust IV, 5.875%, 5/09/32 (a)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>265,070</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,355</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,351,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Zenith National Insurance Capital Trust I,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.55%, 8/01/28 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>930,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,078,774</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multi-Utilities &#151; 4.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dominion Resources Capital Trust I,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.83%, 12/01/27 (e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>986,993</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dominion Resources, Inc., 7.50%, 6/30/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,323,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Puget Sound Energy, Inc. Series A, 6.974%, 6/01/67 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>475</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>248,188</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,558,181</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="64%"></TD>
     <TD width="5%"></TD>
     <TD width="11%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Trusts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 5.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Enterprise Products Operating LLC,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.375%, 8/01/66 (c)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>825</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 569,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Southern Union Co., 7.20%, 11/01/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,350</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,210,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TransCanada PipeLines Ltd., 6.35%, 5/15/67 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,150</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,376,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,155,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Thrifts &amp; Mortgage Finance &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Webster Capital Trust IV, 7.65%, 6/15/37 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>975</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>417,107</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Capital Trusts &#151; 80.1%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>46,347,717</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 10.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Tennessee Bank NA, 3.90% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,176</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>371,175</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HSBC USA, Inc. (b):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series D, 4.50% (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>472,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series H, 6.50%</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>168,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,856,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Provident Financial Group, Inc., 7.75%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>732,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Royal Bank of Scotland Group Plc Series M, 6.40% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,300</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Santander Finance Preferred SA Unipersonal, 6.80% (b)</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>103,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,525,880</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,998,230</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 1.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cobank ACB, 7% (a)(b)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>38,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>985,188</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 4.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Alabama Power Co., 6.50% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>562,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Entergy Arkansas, Inc., 6.45% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>702,901</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Entergy Louisiana LLC, 6.95% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,650</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,585,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,850,901</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 7.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aspen Insurance Holdings Ltd., 7.401% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>55,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>770,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Axis Capital Holdings Ltd.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series A, 7.25%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>612,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series B, 7.50% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>539,438</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Endurance Specialty Holdings Ltd. Series A, 7.75% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>564,960</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>RenaissanceRe Holding Ltd. Series D, 6.60%</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,980,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,466,898</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Real Estate Investment Trusts (REITs) &#151; 8.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BRE Properties, Inc. Series D, 6.75% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>170,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Industrial Realty Trust, Inc., 6.236% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>610</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>223,031</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HRPT Properties Trust (b):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series B, 8.75%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>97,917</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,405,109</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series C, 7.125%</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>125,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>iStar Financial, Inc. Series I, 7.50% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>59,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>318,325</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Storage (b):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series F, 6.45%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>184,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series I, 7.25%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>862,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series M, 6.625%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>378,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,042,065</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Thrifts &amp; Mortgage Finance &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sovereign Bancorp, Inc. Series C, 7.30% (b)(h)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,400</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,386</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Wireless Telecommunication Services &#151; 2.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Centaur Funding Corp., 9.08% (a)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,720</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,691,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Stocks &#151; 36.4%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,057,168</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>25</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate Income Strategies Fund, Inc. (PSW)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="17%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust Preferreds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Consumer Finance &#151; 2.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital One Capital II, 7.50%, 6/15/66</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD 2,326</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,373,024</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ING Groep NV, 7.20% (b)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>875</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>418,254</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 2.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPL Energy Supply LLC, 7%, 7/15/46</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,235</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250,703</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 2.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ABN AMRO North America Capital Funding Trust II,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.874% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>125,122</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lincoln National Capital VI Series F, 6.75%, 9/11/52</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,250</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,235,366</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,360,488</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Trust Preferreds &#151; 7.6%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,402,469</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Securities &#151; 124.1%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>71,807,354</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 3.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Oil Insurance Ltd., 7.558% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>327,210</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,484</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,498,349</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Corporate Bonds &#151; 3.2%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,825,559</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Long-Term Investments</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $135,994,488) &#151; 127.3%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>73,632,913</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Money Market Fund &#151; 47.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund, 0.64% (i)(j)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,610,483</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,610,483</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $27,610,483) &#151; 47.7%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,610,483</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments (Cost &#151; $163,604,971*) &#151; 175.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>101,243,396</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities in Excess of Other Assets &#151; (5.4)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,136,602)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Shares, at Redemption Value &#151; (69.6)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(40,254,342)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shares &#151; 100.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 57,852,452</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* The cost and unrealized appreciation (depreciation) of investments as of April 30,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009, as computed for federal income tax purposes, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="42%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$163,147,386</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized appreciation</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 259,819</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(62,163,809)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (61,903,990)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a) Security exempt from registration under Rule 144A of the Securities Act of 1933.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>These securities may be resold in transactions exempt from registration to qualified</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>institutional investors.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(b) Security is perpetual in nature and has no stated maturity date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(c) Variable rate security. Rate shown is as of report date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(d) Issuer filed for bankruptcy and/or is in default of interest payments.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(e) All or a portion of security held as collateral in connection with open reverse repur-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>chase agreements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(f) All or a portion of security held as collateral in connection with open financial</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>futures contracts.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(g) All or a portion of security held as collateral in connection with open swaps.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(h) Depositary receipts.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(i) Investments in companies considered to be an affiliate of the Fund, for purposes of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Section 2(a)(3) of the Investment Company Act of 1940, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="50%"></TD>
     <TD width="29%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Affiliate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Activity</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,610,483</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 18,907</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Series, LLC</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash Sweep Series</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(15,938,424)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 56,701</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(j) Represents the current yield as of report date.</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial futures contracts purchased as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="18%"></TD>
     <TD width="21%"></TD>
     <TD width="19%"></TD>
     <TD width="21%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Depreciation)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>66</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2-Year US</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Bond</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$14,280,058</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 78,036</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30-Year US</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Bond</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 746,966</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(11,591)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 66,445</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>futures contracts sold as of April 30, 2009 were as follows:</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>86</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10-Year US</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Bond</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10,504,125</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 103,500</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; sold protection outstanding as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="15%"></TD>
     <TD width="12%"></TD>
     <TD width="13%"></TD>
     <TD width="14%"></TD>
     <TD width="10%"></TD>
     <TD width="12%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Receive</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rating</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Phillip Morris</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.73%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$2,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,735</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD colSpan=4 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the S&amp;P&#146;s ratings of the issuer.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD colSpan=7 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The maximum potential amount the Fund may pay should a negative credit</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=6 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>event take a place as defined under the terms of the agreement.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; buy protection outstanding as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="21%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD>
     <TD width="17%"></TD>
     <TD width="14%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Pay</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Depreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Altria Group Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.03%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (24,115)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nordstrom Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.20%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2014</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(144,301)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (168,416)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="22%"></TD>
     <TD width="12%"></TD>
     <TD width="14%"></TD>
     <TD width="15%"></TD>
     <TD width="18%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Interest</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trade</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Closing</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counterparty</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.99%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/03/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8/15/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$5,080,692</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,060,551</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For Fund compliance purposes, the Fund&#146;s industry classifications refer to any one</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or more of the industry sub-classifications used by one or more widely recognized</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market indexes or ratings group indexes, and/or as defined by Fund management.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>This definition may not apply for purposes of this report, which may combine indus-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>try sub-classifications for reporting ease.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>26 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (concluded) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate Income Strategies Fund, Inc. (PSW)</FONT></B></P>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Effective November 1, 2008, the Fund adopted Financial Accounting Standards</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Board Statement of Financial Accounting Standards No. 157, &#147;Fair Value Measure-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments&#148; (&#147;FAS 157&#148;). FAS 157 clarifies the definition of fair value, establishes a</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>framework for measuring fair values and requires additional disclosures about the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>use of fair value measurements. Various inputs are used in determining the fair</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of investments, which are as follows:</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1 &#151; price quotations in active markets/exchanges for identical securities</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2 &#151; other observable inputs (including, but not limited to: quoted prices for</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>similar assets or liabilities in markets that are active, quoted prices for identical</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or similar assets in markets that are not active, inputs other than quoted prices</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that are observable for the assets or liabilities (such as interest rates, yield</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>curves, volatilities, prepayment speeds, loss severities, credit risks and default</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rates) or other market-corroborated inputs)</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3 &#151; unobservable inputs based on the best information available in the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>circumstance, to the extent observable inputs are not available (including the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s own assumptions used in determining the fair value of investments)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The inputs or methodology used for valuing securities are not necessarily an indica-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tion of the risk associated with investing in those securities. For information about</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Fund&#146;s policy regarding valuation of investments and other significant accounting</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>policies, please refer to Note 1 of the Notes to Financial Statements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following table summarizes the inputs used as of April 30, 2009 in determining</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the fair valuation of the Fund&#146;s investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="24%"></TD>
     <TD width="33%"></TD>
     <TD width="20%"></TD>
     <TD width="21%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Valuation</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Inputs</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments*</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 46,110,262</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 181,536</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (11,591)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>53,547,634</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,735</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,228,967)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,585,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$101,243,396</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 186,271</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (5,240,558)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* Other financial instruments are swaps, futures and reverse repurchase</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>agreements. Swaps and futures are valued at the unrealized appreciation/</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>depreciation on the instrument. Reverse repurchase agreements are shown at</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market value.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following is a reconciliation of investments for unobservable inputs (Level 3)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>used in determining fair value:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="68%"></TD>
     <TD width="31%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Balance, as of October 31, 2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accrued discounts/premiums</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Realized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (1,933,262)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Change in unrealized appreciation/depreciation</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(679,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net sales</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(990,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net transfers into Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,188,262</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Balance, as of April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,585,500</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Included in the related net change in unrealized appreciation/depreciation on</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Statements of Operations.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>27</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (BTZ)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="6%"></TD>
     <TD width="11%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Trusts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Building Products &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C8 Capital SPV Ltd., 6.64% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,160</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,417,924</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 2.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit Suisse Guernsey Ltd., 5.86% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,050</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>571,410</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Capital Trust III, 8.25%, 3/15/42 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,740</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,184,192</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Capital Trust IV, 2.32%, 6/01/67 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,245</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,216,601</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,972,203</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 15.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BB&amp;T Capital Trust IV, 6.82%, 6/12/77 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,215,909</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of Ireland Capital Funding II, LP, 5.571% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,685</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,335,997</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of Ireland Capital Funding III, LP,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.107% (a)(b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,049,425</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc, (a)(b)(c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.93%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,274,456</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.86%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,162,925</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Commonwealth Bank of Australia,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.024% (a)(b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,300,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HSBC Capital Funding LP/Jersey Channel Islands,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.176% (a)(b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,142,969</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lloyds Banking Group Plc, 6.657% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,050,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SMFG Preferred Capital USD 1 Ltd.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.078% (a)(b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,943,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,850</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,473,328</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shinsei Finance II (Cayman) Ltd., 7.16% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,005</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>241,514</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Standard Chartered Bank, 7.014% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,225,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wells Fargo &amp; Co. Series K, 7.98% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,985</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,271,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wells Fargo Capital XIII Series GMTN, 7.70% (b)(c)(e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,900</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,496,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>69,182,923</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C10 Capital SPV Ltd., 6.722%, (a)(b)(c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,242,350</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPL Capital Funding, 6.70%, 3/30/67 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,900</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,262,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 18.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AXA SA, 6.463% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,794,336</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Allstate Corp. (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.50%, 5/15/57</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,675</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,825,469</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series B, 6.125%, 5/15/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,725</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,798,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American International Group, Inc.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.25%, 3/15/87 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,425</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,428,125</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Chubb Corp., 6.375%, 3/29/67 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,251,206</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Liberty Mutual Group, Inc., (a)(c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 3/15/37</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,270,238</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.75%, 6/15/88</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,410,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lincoln National Corp., (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 5/17/66</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,255</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,361,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.05%, 4/20/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,730</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,371,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc., 6.40%, 12/15/66</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,550</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,434,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nationwide Life Global Funding I, 6.75%, 5/15/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,025</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,152,252</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Progressive Corp., 6.70%, 6/15/37 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19,675</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,744,103</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reinsurance Group of America,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.75%, 12/15/65 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,342,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swiss Re Capital I LP, 6.854% (a)(b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,475</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,852,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Travelers Cos., Inc., 6.25%, 3/15/67 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,540,652</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>White Mountains Re Group Ltd., 7.506% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,392,589</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust IV, 5.875%, 5/09/32 (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,050</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,086,787</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,220</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,138,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>84,195,682</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multi-Utilities &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Puget Sound Energy, Inc. Series A,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.974%, 6/01/67 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,575</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>822,937</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="62%"></TD>
     <TD width="19%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Trusts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 2.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Enterprise Products Operating LLC,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.375%, 8/01/66 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD 4,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,105,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Southern Union Co., 7.20%, 11/01/66 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,575,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TransCanada PipeLines Ltd., 6.35%, 5/15/67 (c)(d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,325</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,688,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,368,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Thrifts &amp; Mortgage Finance &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Webster Capital Trust IV, 7.65%, 6/15/37 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,225</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,379,661</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Capital Trusts &#151; 40.9%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>183,843,680</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 6.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Citizens Funding Trust I, 7.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>210,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,894,351</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HSBC USA, Inc. Series H, 6.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>977,766</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,622,022</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Royal Bank of Scotland Group Plc Series M, 6.40%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>120,900</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Santander Finance Preferred SA Unipersonal, 6.80%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>597,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,843,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,480,273</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 2.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Citigroup, Inc. Series T, 6.50% (f)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>90,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,844,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cobank ACB, 7% (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>150,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,888,900</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ING Groep NV:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.125%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>200,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,094,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.05%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>67,860</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.20%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>213,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,545,373</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.38%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>474,358</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,914,491</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Telecommunication Services &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AT&amp;T Inc., 6.375%, 2/15/56</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>766,066</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 5.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Alabama Power Co., 6.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,250,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Entergy Louisiana LLC, 6.95%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,800,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interstate Power &amp; Light Co. Series B, 8.375%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>785,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,464,950</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,514,950</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 10.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aegon NV, 6.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>400,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,052,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Arch Capital Group Ltd.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series A, 8%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,992,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series B, 7.875%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,076,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aspen Insurance Holdings Ltd., 7.401% (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>655,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,170,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Axis Capital Holdings Ltd. Series B, 7.50% (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>180,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,788,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Endurance Specialty Holdings Ltd. Series A, 7.75%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>369,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,922,450</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PartnerRe Ltd. Series C, 6.75%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>265,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,134,048</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>RenaissanceRe Holding Ltd. Series D, 6.60%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>285,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,130,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45,266,048</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Real Estate Investment Trusts (REITs) &#151; 1.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BRE Properties, Inc. Series D, 6.75%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>511,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>iStar Financial, Inc. Series I, 7.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>55,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>294,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Storage:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series F, 6.45%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>554,400</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series M, 6.625%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>55,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,040,050</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sovereign Real Estate Investment Corp., 12% (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,900,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,300,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Wireless Telecommunication Services &#151; 1.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Centaur Funding Corp., 9.08% (a)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,218,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Stocks &#151; 27.9%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>125,461,078</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>28 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<A name="page_30"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (BTZ)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="6%"></TD>
     <TD width="11%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust Preferreds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit Suisse Guernsey Ltd., 7.90%, 3/28/13</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>250</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 197,531</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 4.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kazkommerts Finance 2 BV, 9.20% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>125,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>KeyCorp Capital IX, 6.75%, 12/15/66</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,083</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,393,622</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mizuho Capital Investment 1 Ltd., 6.686% (a)(b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,889,821</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>National City Preferred Capital Trust I, 12% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,713</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,212,859</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,621,302</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 3.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase Capital XXI Series U,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.966%, 2/02/37 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,875</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,480,231</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase Capital XXIII, 2.238%, 5/15/77 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,836,227</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase Capital XXV, 6.80%, 10/01/37</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,650</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,136,478</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,452,936</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 6.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AON Corp., 8.205%, 1/01/27 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,466,160</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ace Capital Trust II, 9.70%, 4/01/30 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,294,510</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W.R. Berkley Capital Trust II, 6.75%, 7/26/45</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,268</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,584,568</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,345,238</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Trust Preferreds &#151; 14.8%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>66,617,007</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Securities &#151; 83.6%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>375,921,765</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Aerospace &amp; Defense &#151; 0.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Honeywell International, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>237,196</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lockheed Martin Corp.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,248,627</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Northrop Grumman Corp.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,044,360</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>United Technologies Corp.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,600</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>371,184</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,901,367</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Air Freight &amp; Logistics &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>United Parcel Service, Inc. Class B</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,300</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,899,942</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Auto Components &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Johnson Controls, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,300</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>290,853</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Beverages &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Coca-Cola Co.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>59,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,539,950</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PepsiCo, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,199,216</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,739,166</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Biotechnology &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Amgen, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,376,548</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Biogen Idec, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>497,902</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Celgene Corp. (g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>619,440</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Genzyme Corp. (g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>367,977</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gilead Sciences, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>29,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,332,780</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,194,647</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Federated Investors, Inc. Class B</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>636,064</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Goldman Sachs Group, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,610</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>720,885</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Morgan Stanley</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,600</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>297,864</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,654,813</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Chemicals &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Air Products &amp; Chemicals, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>263,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>E.I. du Pont de Nemours &amp; Co.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,699,110</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Monsanto Co.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,010,191</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPG Industries, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>713,610</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,686,511</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="68%"></TD>
     <TD width="12%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 1.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M&amp;T Bank Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 902,140</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Regions Financial Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>158,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>711,216</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wells Fargo &amp; Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>137,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,745,372</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,358,728</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Services &amp; Supplies &#151; 0.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Avery Dennison Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>942,672</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pitney Bowes, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>44,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,087,122</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Waste Management, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>31,900</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>850,773</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,880,567</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Communications Equipment &#151; 1.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cisco Systems, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>96,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,864,380</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corning, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>520,472</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Motorola, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>143,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>795,214</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>QUALCOMM, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,700</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,553,144</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,733,210</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Computers &amp; Peripherals &#151; 1.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Apple, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,120,584</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dell, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>61,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>716,954</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EMC Corp. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>57,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>721,728</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hewlett-Packard Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,306,074</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International Business Machines Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,456,398</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,321,738</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Distributors &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Genuine Parts Co.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,300</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,028,988</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of America Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>152,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,359,146</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase &amp; Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>87,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,877,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NYSE Euronext</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>37,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>868,875</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,105,621</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Telecommunication Services &#151; 1.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AT&amp;T Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160,487</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,111,677</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Embarq Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>475,280</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Verizon Communications, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>86,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,615,308</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,202,265</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American Electric Power Co., Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>234,782</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Duke Energy Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>83,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,153,135</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FirstEnergy Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>229,040</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Progress Energy, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>757,464</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Southern Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,045,456</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,419,877</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electrical Equipment &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Emerson Electric Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,535,204</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Rockwell Automation, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>701,298</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,236,502</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electronic Equipment, Instruments &amp; Components &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tyco Electronics Ltd.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>374,960</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Energy Equipment &amp; Services &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>National Oilwell Varco, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>708,552</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Schlumberger Ltd.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,112,073</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Smith International, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,218</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>574,335</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,394,960</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Food &amp; Staples Retailing &#151; 1.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CVS Caremark Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>441,742</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SUPERVALU, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>34,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>564,075</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SYSCO Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>926,201</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wal-Mart Stores, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>62,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,160,080</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Walgreen Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>823,466</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,915,564</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>29</FONT></P>
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<A name="page_31"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (BTZ)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="59%"></TD>
     <TD width="21%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Food Products &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kraft Foods, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>49,935</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,168,479</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sara Lee Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>83,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>692,224</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,860,703</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Health Care Equipment &amp; Supplies &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Baxter International, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>392,850</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Becton Dickinson &amp; Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>846,720</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Boston Scientific Corp. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>204,363</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Covidien Ltd.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>709,070</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Medtronic, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,300</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>265,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,418,603</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Health Care Providers &amp; Services &#151; 0.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aetna, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>213,497</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Express Scripts, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>895,580</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Medco Health Solutions, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>779,545</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>UnitedHealth Group, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>228,144</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>WellPoint, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>791,060</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,907,826</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Hotels, Restaurants &amp; Leisure &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>McDonald&#146;s Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,923,769</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Starwood Hotels &amp; Resorts Worldwide, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50,900</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,061,774</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,985,543</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Household Durables &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Black &amp; Decker Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>951,080</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fortune Brands, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,041,715</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>KB Home</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>428,259</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Whirlpool Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,092,872</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,513,926</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Household Products &#151; 1.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Clorox Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>969,665</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Procter &amp; Gamble Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>71,700</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,544,848</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,514,513</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>IT Services &#151; 0.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Automatic Data Processing, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>975,040</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cognizant Technology Solutions Corp. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>342,102</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MasterCard, Inc. Class A</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,688</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>309,664</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Paychex, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,083,101</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,709,907</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Industrial Conglomerates &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3M Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,635,840</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>General Electric Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>178,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,263,085</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Textron, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>96,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,035,445</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,934,370</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 1.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aflac, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,265,382</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Allstate Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>842,213</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cincinnati Financial Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>34,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>835,855</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lincoln National Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>53,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>601,340</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,297,100</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Principal Financial Group, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>38,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>620,920</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,462,810</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Internet &amp; Catalog Retail &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Amazon.com, Inc. (g)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,400</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>273,768</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Internet Software &amp; Services &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>eBay, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>58,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>970,083</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Google, Inc. Class A (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,810</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,904,616</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Yahoo! Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>568,742</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,443,441</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Leisure Equipment &amp; Products &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mattel, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>48,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>718,080</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="61%"></TD>
     <TD width="19%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Life Sciences Tools &amp; Services &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Thermo Fisher Scientific, Inc. (g)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,900</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 382,372</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Machinery &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Caterpillar, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,252,416</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cummins, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>595,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deere &amp; Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,700</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>482,742</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,330,158</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Comcast Corp. Class A</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>440,610</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The DIRECTV Group, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>647,926</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,088,536</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Metals &amp; Mining &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Alcoa, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>101,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>918,791</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nucor Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>899,249</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,818,040</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multi-Utilities &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Consolidated Edison, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>820,573</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dominion Resources, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>271,440</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Integrys Energy Group, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>604,789</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Service Enterprise Group, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>966,816</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TECO Energy, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>389,712</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Xcel Energy, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>794,764</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,848,094</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multiline Retail &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Macy&#146;s, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>76,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,041,048</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 4.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Anadarko Petroleum Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>899,954</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Apache Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>553,736</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Chevron Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>55,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,661,940</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ConocoPhillips</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>54,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,214,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Exxon Mobil Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>114,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,640,382</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hess Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>832,808</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Massey Energy Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>351,611</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Occidental Petroleum Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>388,401</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Peabody Energy Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>601,692</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Southwestern Energy Co. (g)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>814,022</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Spectra Energy Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>878,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>XTO Energy, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28,600</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>991,276</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19,828,522</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Paper &amp; Forest Products &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MeadWestvaco Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>63,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>989,712</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Weyerhaeuser Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>810,980</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,800,692</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Pharmaceuticals &#151; 3.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Abbott Laboratories</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,799,550</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bristol-Myers Squibb Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>73,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,411,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Eli Lilly &amp; Co.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,349,720</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Johnson &amp; Johnson</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>74,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,879,876</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Merck &amp; Co., Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>66,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,602,264</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pfizer, Inc. (e)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>112,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,500,328</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Schering-Plough Corp.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>54,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,243,080</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wyeth</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,900</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>758,960</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,544,978</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Real Estate Investment Trusts (REITs) &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AvalonBay Communities, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>994,175</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Boston Properties, Inc.</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>884,618</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Storage</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>340,986</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Vornado Realty Trust</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,125</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>983,911</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,203,690</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Road &amp; Rail &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Norfolk Southern Corp.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,300</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>867,024</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>30 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV>

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<A name="page_32"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (BTZ)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="6%"></TD>
     <TD width="11%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Semiconductors &amp; Semiconductor Equipment &#151; 1.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Applied Materials, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 264,957</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Intel Corp.</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>168,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,652,618</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Linear Technology Corp.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>707,850</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Microchip Technology, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>846,400</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>National Semiconductor Corp.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>488,615</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Texas Instruments, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>38,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>689,892</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,650,332</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Software &#151; 1.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Autodesk, Inc. (g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>31,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>632,098</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Microsoft Corp.</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>190,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,853,452</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Oracle Corp.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>86,900</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,680,646</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,166,196</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Specialty Retail &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Home Depot, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,974,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Limited Brands, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>66,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>759,430</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Staples, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,047,496</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,780,926</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Textiles, Apparel &amp; Luxury Goods &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>VF Corp.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>711,240</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Thrifts &amp; Mortgage Finance &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Hudson City Bancorp, Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>78,600</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>987,216</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Tobacco &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Altria Group, Inc. (e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>84,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,381,518</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Philip Morris International, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>68,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,479,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,861,218</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Common Stocks &#151; 38.4%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>172,994,051</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lehman Brothers Holdings, Inc. (h):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.95%, 11/10/09</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>USD</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>105</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,963</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.375%, 11/30/10</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>325</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>46,313</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>61,276</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Computers &amp; Peripherals &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International Business Machines Corp., 8%, 10/15/38</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,943,192</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ING Groep NV, 5.775% (b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,700,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Stan IV Ltd., 4.821%, 7/20/11 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>283</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>183,950</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,883,950</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 1.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPL Energy Supply LLC, 7%, 7/15/46</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,291,551</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,973</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,021,084</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 9.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Comcast Corp., 6.625%, 5/15/56</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>48,750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,336,428</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Metals &amp; Mining &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aleris International, Inc., 10%, 12/15/16 (h)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nexen, Inc., 7.35%, 11/01/43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,185,471</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Paper &amp; Forest Products &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International Paper Co., 8.70%, 6/15/38 (e)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,309,962</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Corporate Bonds &#151; 14.7%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>66,132,914</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="61%"></TD>
     <TD width="4%"></TD>
     <TD width="12%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Exchange-Traded Funds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>UltraShort Real Estate ProShares</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>150,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,540,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Exchange-Traded Funds &#151; 0.8%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,540,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Long-Term Securities</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $985,982,951) &#151; 137.5%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>618,588,730</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Money Market Fund &#151; 24.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.64% (i)(j)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110,469,494</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110,469,494</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $110,469,494) &#151; 24.6%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110,469,494</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments Before Options Written</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $1,096,452,445*) &#151; 162.1%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>729,058,224</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Options Written</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Call Options Written</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>S&amp;P 500 Listed Option, expiring May 2009 at USD 87.50</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,409</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,655,965)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Options Written</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Premiums Received &#151; $3,525,366) &#151; (0.6)%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,655,965)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments, Net of Options Written &#151; 161.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>726,402,259</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities in Excess of Other Assets &#151; (10.1)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(45,648,998)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Shares, at Redemption Value &#151; (51.4)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(231,034,617)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shares &#151; 100.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 449,718,644</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>*The cost and unrealized appreciation (depreciation) of investments as of April 30, 2009,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>as computed for federal income tax purposes, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="56%"></TD>
     <TD width="43%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1,095,643,264</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized appreciation</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,121,362</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(376,706,402)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (366,585,040)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a) Security exempt from registration under Rule 144A of the Securities Act of 1933.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>These securities may be resold in transactions exempt from registration to qualified</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>institutional investors.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(b) Security is perpetual in nature and has no stated maturity date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(c) Variable rate security. Rate shown is as of report date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(d) All or a portion of security has been pledged as collateral for reverse repurchase</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>agreements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(e) All or a portion of security has been pledged as collateral for open financial futures</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>contracts.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(f) Convertible security.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(g) Non-income producing security.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(h) Issuer filed for bankruptcy and/or is in default of interest payments.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(i) Represents the current yield as of report date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(j) Investments in companies considered to be an affiliate of the Fund, for purposes of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Section 2(a)(3) of the Investment Company Act of 1940, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="51%"></TD>
     <TD width="28%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Affiliate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Activity</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110,469,494</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 123,372</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>31</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (concluded) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (BTZ)</FONT></B></P>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For Fund compliance purposes, the Fund&#146;s industry classifications refer to any one</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or more of the industry sub-classifications used by one or more widely recognized</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market indexes or ratings group indexes, and/or as defined by Fund management.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>This definition may not apply for purposes of this report, which may combine indus-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>try sub-classifications for reporting ease.</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="18%"></TD>
     <TD width="13%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="20%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Interest</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trade</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Closing</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counterparty</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank Plc</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.93%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2/27/09</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,280,366</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,259,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank Plc</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.93%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/02/09</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,424,562</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,418,933</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank Plc</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.99%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/03/09</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,599,534</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,533,730</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank Plc</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.98%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/06/09</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,927,552</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,872,746</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank Plc</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.98%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/06/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,577,812</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,514,235</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 55,809,826</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 55,599,144</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial futures contracts purchased as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="14%"></TD>
     <TD width="22%"></TD>
     <TD width="20%"></TD>
     <TD width="22%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Depreciation)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>451</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10-Year US</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Bond</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$54,152,704</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 390,144</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>37</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30-Year US</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Bond</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,606,288</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(71,475)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>91</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>S&amp;P EMINI</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,816,865</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>141,635</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 460,304</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; buy protection oustanding as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="21%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD>
     <TD width="17%"></TD>
     <TD width="14%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Pay</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Depreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Altria Group, Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.03%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$9,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (108,517)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nordstrom, Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.20%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2014</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$4,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(577,203)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (685,720)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; sold protection oustanding as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="15%"></TD>
     <TD width="11%"></TD>
     <TD width="13%"></TD>
     <TD width="14%"></TD>
     <TD width="12%"></TD>
     <TD width="13%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Receive</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rating</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Philip Morris</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International,</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.73%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$9,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$21,307</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the S&amp;P&#146;s ratings of the issuer.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The maximum potential amount the Fund may pay should a negative credit</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>event take a place as defined under the terms of the agreement.</FONT></P>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Effective November 1, 2008, the Fund adopted Financial Accounting Standards</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Board Statement of Financial Accounting Standards No. 157, &#147;Fair Value Measure-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments&#148; (&#147;FAS 157&#148;). FAS 157 clarifies the definition of fair value, establishes a</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>framework for measuring fair values and requires additional disclosures about the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>use of fair value measurements. Various inputs are used in determining the fair</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of investments, which are as follows:</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1 &#151; price quotations in active markets/exchanges for identical securities</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2 &#151; other observable inputs (including, but not limited to: quoted prices</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for similar assets or liabilities in markets that are active, quoted prices for identi-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cal or similar assets in markets that are not active, inputs other than quoted</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>prices that are observable for the assets or liabilities (such as interest rates,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>yield curves, volatilities, prepayment speeds, loss severities, credit risks and</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>default rates) or other market-corroborated inputs)</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3 &#151; unobservable inputs based on the best information available in the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>circumstance, to the extent observable inputs are not available (including the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s own assumptions used in determining the fair value of investments)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The inputs or methodology used for valuing securities are not necessarily an indica-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tion of the risk associated with investing in those securities. For information about</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Fund&#146;s policy regarding valuation of investments and other significant accounting</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>policies, please refer to Note 1 of the Notes to Financial Statements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following table summarizes the inputs used as of April 30, 2009 in determining</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the fair valuation of the Fund&#146;s investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="24%"></TD>
     <TD width="32%"></TD>
     <TD width="21%"></TD>
     <TD width="21%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Valuation</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Inputs</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments*</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$440,857,394</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 531,779</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (2,727,440)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>285,216,880</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(56,284,864)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,983,950</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,307</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$729,058,224</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 553,086</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (59,012,304)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* Other financial instruments are futures, swaps, options written and reverse</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>repurchase agreements. Futures and swaps are valued at the unrealized</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>appreciation/depreciation on the instrument and options and reverse</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>repurchase agreements are shown at market value.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following is a reconciliation of investments for unobservable inputs (Level 3)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>were used in determining fair value:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="29%"></TD>
     <TD width="21%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Balance, as of October 31, 2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 268,850</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accrued discounts/premiums</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(361)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Realized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(6,619,805)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Change in unrealized appreciation/</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>depreciation</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,573,299)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net sales</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,300,000)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net transfers into Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,208,565</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21,307</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Balance, as of April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,983,950</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21,307</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Included in the related net change in unrealized appreciation/depreciation on</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Statements of Operations.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>32 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Income Strategies Fund, Inc. (PSY)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Trusts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Building Products &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C8 Capital SPV Ltd., 6.64% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,915</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,756,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 4.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ameriprise Financial, Inc., 7.518%, 6/01/66 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,378,960</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lehman Brothers Holdings Capital Trust V,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.64% (b)(c)(d)(e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>640</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Capital Trust III, 8.25%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>due 3/15/42 (c)(f)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,920</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,987,264</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Capital Trust IV, 2.32%, 6/01/67 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,535</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,072,889</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,439,753</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 14.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ABN AMRO North America Holding Preferred</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital Repackaging Trust I, 6.523% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,035</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,933,821</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank One Capital III, 8.75%, 9/01/30</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,624,914</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of Ireland Capital Funding II, LP,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.571% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,065</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,611,790</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of Ireland Capital Funding III, LP,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.107% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,575</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,627,775</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc, 5.926% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,396,430</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Empire Capital Trust II, 8.277%, 6/01/27</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,630</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,159,189</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HSBC America Capital Trust I, 7.808%, 12/15/26 (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,358,966</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HSBC Capital Funding LP/Jersey Channel Islands,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.176% (a)(b)(c)(f)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,835</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,243,036</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HSBC Finance Capital Trust IX, 5.911%, 11/30/35 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,317,339</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lloyds Banking Group Plc, 6.657% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,525,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>National City Preferred Capital Trust I, 12% (b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>951,830</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NationsBank Capital Trust III, 1.681%, 1/15/27 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,470</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,486,938</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SMFG Preferred Capital USD 3 Ltd.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.50% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,550</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,202,679</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SunTrust Preferred Capital I, 5.853% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,825</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>593,125</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,032,832</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 4.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AgFirst Farm Credit Bank, 8.393%, 12/15/16 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,884,616</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Farm Credit Bank of Texas Series 1, 7.561% (b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,498,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ING Capital Funding Trust III, 8.439% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,066</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,608,380</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase Capital XXV, 6.80%, 10/01/37</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,150</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,502,538</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,493,734</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 1.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPL Capital Funding, 6.70%, 3/30/67 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,925</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,436,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 53.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AON Corp., 8.205%, 1/01/27 (f)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,481,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AXA SA, 6.379% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,470</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,375,621</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ace Capital Trust II, 9.70%, 4/01/30</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,836,939</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Allstate Corp. (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.50%, 5/15/57</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,775</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,106,094</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series B, 6.125%, 5/15/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,450</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,747,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American International Group, Inc., 6.25%, 3/15/87</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,895</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,236,875</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Chubb Corp., 6.375%, 3/29/67 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,702,376</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Farmers Exchange Capital, 7.05%, 7/15/28 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,924,150</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Security Assurance Holdings Ltd.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.40%, 12/15/66 (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,930</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,871,100</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>GE Global Insurance Holding Corp., 7.75%, 6/15/30</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,076,580</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Genworth Financial, Inc., 6.15%, 11/15/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>418,959</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Great West Life &amp; Annuity Insurance Co.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.153%, 5/16/46 (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,704,400</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Liberty Mutual Group, Inc. (a)(c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 3/15/37</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,150</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,736,459</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.75%, 6/15/88</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,925</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,358,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lincoln National Corp. (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 5/17/66</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,840,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.05%, 4/20/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,025</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,457,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc., 6.40%, 12/15/66</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,825</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,001,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nationwide Life Global Funding I, 6.75%, 5/15/67</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,675</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,800,379</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="8%"></TD>
     <TD width="16%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Trusts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance (concluded)</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Oil Casualty Insurance Ltd., 8%, 9/15/34 (a)</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,605</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,178,617</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Principal Life Insurance Co., 8%, 3/01/44 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,325</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,859,320</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Progressive Corp., 6.70%, 6/15/37 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,650</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,769,697</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reinsurance Group of America,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.75%, 12/15/65 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,468,440</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swiss Re Capital I LP, 6.854% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,875</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,505,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Travelers Cos., Inc., 6.25%, 3/15/67 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,850</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,910,820</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust IV, 5.875%, 5/09/32 (a)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>689,182</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,110</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,239,400</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Zenith National Insurance Capital Trust I,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.55%, 8/01/28 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,487,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>128,784,608</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multi-Utilities &#151; 6.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dominion Resources Capital Trust I, 7.83%, 12/01/27</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,224,940</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dominion Resources, Inc., 7.50%, 6/30/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,292,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Puget Sound Energy, Inc. Series A, 6.974%,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/01/67 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,825</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>953,563</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,470,503</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 6.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Enterprise Products Operating LLC,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.375%, 8/01/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,225</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,915,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Southern Union Co., 7.20%, 11/01/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,416,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TransCanada PipeLines Ltd., 6.35%, 5/15/67 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,300</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,312,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,643,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Road &amp; Rail &#151; 1.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BNSF Funding Trust I, 6.613%, 12/15/55 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,750</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,775,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Thrifts &amp; Mortgage Finance &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Webster Capital Trust IV, 7.65%, 6/15/37 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,875</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,657,733</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Capital Trusts &#151; 94.8%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>226,490,613</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche Bank Contingent Capital Trust II, 6.55%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>530</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,139</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 11.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc, 8.125%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>225,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,575,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Tennessee Bank NA, 3.75% (a)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,650</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,467,656</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HSBC USA, Inc.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series D, 4.50% (c)(g)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>131,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,777,950</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series H, 6.50%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>120,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,040,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Provident Financial Group, Inc., 7.75%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>166,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,908,575</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Royal Bank of Scotland Group Plc Series M, 6.40%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>120,900</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SG Preferred Capital II, 6.302% (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,420,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Santander Finance Preferred SA Unipersonal, 6.80%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>147,200</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,178,560</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26,488,891</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 1.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cobank ACB, 7% (a)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>152,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,940,752</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 5.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Alabama Power Co.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.83%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>326,480</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.50%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>145,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,262,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Entergy Arkansas, Inc., 6.45%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>114,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,792,081</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Entergy Louisiana LLC, 6.95%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>49,850</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,489,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interstate Power &amp; Light Co. Series B, 8.375%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>80,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,085,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,956,161</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 18.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aspen Insurance Holdings Ltd., 7.401% (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>194,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,716,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Axis Capital Holdings Ltd.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series A, 7.25%</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>129,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,262,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series B, 7.50% (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,157,750</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>33</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Income Strategies Fund, Inc. (PSY)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="58%"></TD>
     <TD width="21%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance (concluded)</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Endurance Specialty Holdings Ltd. Series A, 7.75%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>139,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,234,160</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc., Series B, 6.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>904,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,550,520</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Prudential Plc, 6.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>92,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,338,876</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>RenaissanceRe Holding Ltd. Series D, 6.60%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>435,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,830,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Zurich RegCaPS Funding Trust, 6.58% (a)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,970,063</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>44,060,119</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multi-Utilities &#151; 1.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Pacific Gas &amp; Electric Co. Series A, 6%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>140,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,567,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Real Estate Investment Trusts (REITs) &#151; 6.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BRE Properties, Inc. Series D, 6.75%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>597,100</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Developers Diversified Realty Corp., 8%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>400,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,756,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Industrial Realty Trust, Inc., 6.236% (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,390</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>873,844</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Firstar Realty LLC, 8.875% (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,155,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kimco Realty Corp. Series F, 6.65%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>787,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Storage Series F, 6.45%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>739,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Storage Series M, 6.625%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>71,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,359,629</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Storage, Inc. Series I, 7.25%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,448,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Regency Centers Corp. Series D, 7.25%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,875,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,591,273</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Thrifts &amp; Mortgage Finance &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sovereign Bancorp, Inc. Series C, 7.30% (h)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>48,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>767,520</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Wireless Telecommunication Services &#151; 0.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Centaur Funding Corp., 9.08% (a)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,423</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,506,803</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Stocks &#151; 45.6%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>108,885,858</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust Preferreds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>KeyCorp Capital IX, 6.75%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,868</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>903,396</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Communications Equipment &#151; 0.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate-Backed Trust Certificates, Motorola</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Debenture Backed Series 2002-14,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.375%, 11/15/28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,265,928</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Consumer Finance &#151; 4.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital One Capital II, 7.50%, 6/15/66</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,702</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,861,212</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ING Groep NV, 7.20% (b)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,673,015</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 3.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Georgia Power Co. Series O, 1.475%, 4/15/33</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,246,758</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HECO Capital Trust III, 6.50%, 3/18/34</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,093,435</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>National Rural Utilities Cooperative Finance Corp.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.75%, 2/15/43</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,067,224</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPL Energy Supply LLC, 7%, 7/15/46</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,835</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,909,194</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,316,611</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Gas Utilities &#151; 5.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Southwest Gas Capital II, 7.70%, 9/15/43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,125</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,160,328</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="56%"></TD>
     <TD width="6%"></TD>
     <TD width="16%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust Preferreds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 4.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ABN AMRO North America Capital Funding Trust II,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.375% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 11,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 688,172</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lincoln National Capital VI Series F,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.75%, 9/11/52</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,745,257</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W.R. Berkley Capital Trust II, 6.75%, 7/26/45</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,375</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,193,647</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,627,076</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Trust Preferreds &#151; 19.2%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45,807,566</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Securities &#151; 159.6%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>381,184,037</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 3.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Oil Insurance Ltd., 7.558% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,636,050</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,967</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,024,695</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Structured Asset Repackaged Trust Series 2004-1,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.602%, 4/21/11 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>382</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>290,560</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Corporate Bonds &#151; 3.3%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,951,305</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Long-Term Investments</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $683,669,352) &#151; 162.9%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>389,135,342</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Money Market Fund &#151; 6.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund, 0.64% (i)(j)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,858,851</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,858,851</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $15,858,851) &#151; 6.6%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,858,851</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments (Cost &#151; $699,528,203*) &#151; 169.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>404,994,193</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Assets Less Liabilities &#151; 2.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,929,413</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Shares, at Redemption Value &#151; (72.4)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(172,990,679)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shares &#151; 100.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 238,932,927</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>*The cost and unrealized appreciation (depreciation) of investments as of April 30,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009, as computed for federal income tax purposes, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="42%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 700,584,478</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized appreciation</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,865,611</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(298,455,896)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(295,590,285)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a) Security exempt from registration under Rule 144A of the Securities Act of 1933.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>These securities may be resold in transactions exempt from registration to qualified</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>institutional investors.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(b) Security is perpetual in nature and has no stated maturity date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(c) Variable rate security. Rate shown is as of report date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(d) Non-income producing security.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(e) Issuer filed for bankruptcy and/or is in default of interest payments.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(f) All or a portion of security held as collateral in connection with open reverse repur-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>chase agreements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(g) All or a portion of security has been pledged as collateral in connection with open</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>financial futures contracts.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(h) Depositary receipts.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(i) Investments in companies considered to be an affiliate of the Fund, for purposes of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Section 2(a)(3) of the Investment Company Act of 1940, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="52%"></TD>
     <TD width="30%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Affiliate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Activity</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,858,851</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 16,827</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Series, LLC</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash Sweep Series</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(28,803,004)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 80,087</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>34 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (concluded) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Income Strategies Fund, Inc. (PSY)</FONT></B></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(j) Represents the current yield as of report date.</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For Fund compliance purposes, the Fund&#146;s industry classifications refer to any one</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or more of the industry sub-classifications used by one or more widely recognized</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market indexes or ratings group indexes, and/or as defined by Fund management.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>This definition may not apply for purposes of this report, which may combine indus-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>try sub-classifications for reporting ease.</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="22%"></TD>
     <TD width="11%"></TD>
     <TD width="13%"></TD>
     <TD width="14%"></TD>
     <TD width="19%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Interest</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trade</FONT></B>&nbsp;</TD>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Closing</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counterparty</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.99%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/03/09</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,262,935</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,250,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.99%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/03/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,295,374</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,282,310</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6,558,309</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6,532,310</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial futures contracts purchased as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="18%"></TD>
     <TD width="21%"></TD>
     <TD width="18%"></TD>
     <TD width="23%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Depreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30-Year U.S.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Notes</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$3,361,345</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(52,157)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=4 align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>futures contracts sold as of April 30, 2009 were as follows:</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>214</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10-Year U.S.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Notes</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$26,147,307</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$266,682</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; buy protection outstanding as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="21%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD>
     <TD width="17%"></TD>
     <TD width="14%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Pay</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Depreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Altria Group, Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.03%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (96,459)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nordstrom Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.20%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2014</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$2,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(288,602)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (385,061)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; sold protection outstanding as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="15%"></TD>
     <TD width="11%"></TD>
     <TD width="13%"></TD>
     <TD width="14%"></TD>
     <TD width="12%"></TD>
     <TD width="13%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Receive</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rating</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Philip Morris</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International,</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.73%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$8,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$18,940</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the S&amp;P&#146;s ratings of the issuer.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The maximum potential amount the Fund may pay should a negative credit</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>event take place as defined under the terms of the agreement.</FONT></P>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Effective November 1, 2008, the Fund adopted Financial Accounting Standards</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Board Statement of Financial Accounting Standards No. 157, &#147;Fair Value Measure-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments&#148; (&#147;FAS 157&#148;). FAS 157 clarifies the definition of fair value, establishes a</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>framework for measuring fair values and requires additional disclosures about the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>use of fair value measurements. Various inputs are used in determining the fair</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of investments, which are as follows:</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1 &#151; price quotations in active markets/exchanges for identical securities</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2 &#151; other observable inputs (including, but not limited to: quoted prices for</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>similar assets or liabilities in markets that are active, quoted prices for identical</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or similar assets in markets that are not active, inputs other than quoted prices</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that are observable for the assets or liabilities (such as interest rates, yield</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>curves, volatilities, prepayment speeds, loss severities, credit risks and default</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rates) or other market-corroborated inputs)</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3 &#151; unobservable inputs based on the best information available in the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>circumstance, to the extent observable inputs are not available (including the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s own assumptions used in determining the fair value of investments)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The inputs or methodology used for valuing securities are not necessarily an indica-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tion of the risk associated with investing in those securities. For information about</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Fund&#146;s policy regarding valuation of investments and other significant accounting</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>policies, please refer to Note 1 of the Notes to Financial Statements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following table summarizes the inputs used as of April 30, 2009 in determining</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the fair valuation of the Fund&#146;s investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="24%"></TD>
     <TD width="35%"></TD>
     <TD width="18%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Valuation</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Inputs</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments*</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 126,182,080</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 266,682</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (52,157)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>262,612,054</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(6,917,371)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,200,059</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18,940</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 404,994,193</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 285,622</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (6,969,528)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* Other financial instruments are swaps, futures and reverse repurchase</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>agreements. Swaps and futures are valued at the unrealized appreciation/</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>depreciation on the instrument. Reverse repurchase agreements are shown at</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market value.</FONT><BR>
<BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following is a reconciliation of investments for unobservable inputs (Level 3)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>were used in determining fair value:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="30%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Balance, as of October 31, 2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accrued discounts/premiums</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Realized gain (loss)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Change in unrealized appreciation/</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>depreciation</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (13,615,981)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net purchases (sales)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net transfers into Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>29,816,040</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 18,940</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Balance, as of April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 16,200,059</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 18,940</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Included in the related net change in unrealized appreciation/depreciation on</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Statements of Operations.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>35</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Opportunity Trust (BPP)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="62%"></TD>
     <TD width="6%"></TD>
     <TD width="12%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Trusts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Building Products &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C8 Capital SPV Ltd., 6.64% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,945</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 872,741</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 3.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Capital Trust III, 8.25% due 3/15/42 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,385</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>942,589</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Capital Trust IV, 2.32%, 6/01/67 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,725</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,721,594</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,664,183</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 13.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of Ireland Capital Funding II, LP, 5.571% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,015</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>802,398</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank of Ireland Capital Funding III, LP, 6.107% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,275</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>811,515</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc, 5.926% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,885</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,751,108</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CBA Capital Trust I, 5.805% (a)(b)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,550,300</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FCB/NC Capital Trust I, 8.05%, 3/01/28</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,100</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>797,947</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lloyds TSB Bank Plc, 6.90% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,399</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,759,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NBP Capital Trust III, 7.375% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>560,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>National City Preferred Capital Trust I, 12% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>519,180</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>RESPARCS Funding LP I, 8% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>520,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SMFG Preferred Capital USD 3 Ltd., 9.50% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,725</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,556,232</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SunTrust Preferred Capital I, 5.853% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,800</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>585,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wells Fargo Capital XIII Series GMTN, 7.70% (b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,700</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,088,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Westpac Capital Trust IV, 5.256% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,530,810</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,832,090</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 5.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase Capital XXI Series U,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.966%, 2/02/37 (c)(e)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,125</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,032,749</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase Capital XXV, 6.80%, 10/01/37 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,075</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,715,509</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,748,258</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 1.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPL Capital Funding, 6.70%, 3/30/67 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,675</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,551,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 41.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AFC Capital Trust I Series B, 8.207%, 2/03/27</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,060,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Allstate Corp. (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.50%, 5/15/57</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,350</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,532,188</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series B, 6.125%, 5/15/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,200</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,860,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>American International Group, Inc., 6.25%, 3/15/87</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,055</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>506,875</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Chubb Corp., 6.375%, 3/29/67 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,025</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,457,002</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Genworth Financial, Inc., 6.15%, 11/15/66 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,475</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>205,988</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Liberty Mutual Group, Inc. (a)(c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 3/15/37</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,025</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,849,823</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.75%, 6/15/88</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,875</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,131,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lincoln National Corp. (c):</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 5/17/66 (d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,370</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,078,400</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.05%, 4/20/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>725,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc., 6.40%, 12/15/66</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,375</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,410,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nationwide Life Global Funding I, 6.75%, 5/15/67</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,850</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,905,099</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Progressive Corp., 6.70%, 6/15/37 (c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,775</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,860,086</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Prudential Plc, 6.50% (b)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,970,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reinsurance Group of America, 6.75%, 12/15/65 (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,300</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>636,324</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swiss Re Capital I LP, 6.854% (a)(b)(c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,425</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,722,875</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Travelers Cos., Inc., 6.25%, 3/15/67 (c)(d)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,350</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,987,378</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>White Mountains Re Group Ltd., 7.506% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>822,894</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust IV, 5.875%, 5/09/32 (a)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>650</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>344,591</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (a)(c)(d)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,765</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,733,100</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Zenith National Insurance Capital Trust I,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.55%, 8/01/28 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,674,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>51,473,498</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Multi-Utilities &#151; 0.4%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Puget Sound Energy, Inc. Series A,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.974%, 6/01/67 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>925</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>483,312</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 2.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TransCanada PipeLines Ltd., 6.35%, 5/15/67 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,325</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,768,000</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="61%"></TD>
     <TD width="19%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Trusts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Thrifts &amp; Mortgage Finance &#151; 0.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Webster Capital Trust IV, 7.65%, 6/15/37 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,925</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 823,519</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Capital Trusts &#151; 69.4%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>85,217,101</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Stocks</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lehman Brothers Holdings Inc. Series D, 5.67% (f)(g)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>31,100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,177</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 9.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Banesto Holdings, Ltd. Series A, 10.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>612,189</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc, 8.125%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,589,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>First Republic Preferred Capital Corp., 7.25%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>120,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,639,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>HSBC USA, Inc. Series H, 6.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>330,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,610,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Royal Bank of Scotland Group Plc Series M, 6.40%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>80,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Santander Finance Preferred SA Unipersonal, 6.80%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,110,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Union Planter Preferred Funding Corp., 7.75% (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,200,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,840,989</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 4.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Citigroup, Inc. Series T, 6.50% (h)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>65,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,054,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>JPMorgan Chase &amp; Co. Series E, 6.15%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,932,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,986,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Electric Utilities &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Alabama Power Co., 6.50%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,125,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 18.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Arch Capital Group Ltd. Series A, 8%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>117,414</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,338,887</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aspen Insurance Holdings Ltd., 7.401% (c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>115,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,610,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Endurance Specialty Holdings Ltd. Series A, 7.75%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>172,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,767,020</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>MetLife, Inc. Series B, 6.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>314,500</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,755,350</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PartnerRe Ltd. Series C, 6.75%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>209,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,047,702</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Prudential Plc, 6.50%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>62,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>898,380</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>RenaissanceRe Holding Ltd. Series D, 6.60%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>210,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,780,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Zurich RegCaPS Funding Trust, 6.58% (a)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,830,625</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,027,964</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CMP Susquemanna Radio Holdings Corp., 0% (a)(c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,052</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Real Estate Investment Trusts (REITs) &#151; 3.6%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BRE Properties, Inc. Series D, 6.75%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>341,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Storage Series F, 6.45%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>369,600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Public Storage Series M, 6.625%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>661,850</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>SunTrust Real Estate Investment Trust, 9%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,027,188</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,399,838</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Stocks &#151; 37.0%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45,382,468</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust Preferreds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Markets &#151; 1.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Structured Asset Trust Unit Repackagings (SATURNS),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit Suisse First Boston (USA), Inc. Debenture</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Backed Series 2003-13, 6.25%, 7/15/32</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 278</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>190,281</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Structured Asset Trust Unit Repackagings (SATURNS),</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Goldman Sachs Group, Inc. Debenture Backed</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Series 2003-06, 6%, 2/15/33</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,573</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,707,031</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,897,312</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 1.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Keycorp Capital V, 5.875%, 7/30/33</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,550</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,176,615</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Financial Services &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ING Groep NV, 7.20% (b)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>836,508</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>PPLUS Trust Certificates Series VAL-1 Class A,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.25%, 4/15/32</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>278</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>247,206</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,083,714</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>36 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (continued) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Opportunity Trust (BPP)</FONT></B><BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Percentages shown are based on Net Assets)</FONT></B><BR>
<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par Par</FONT></B></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="63%"></TD>
     <TD width="18%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust Preferreds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Food Products &#151; 1.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate-Backed Trust Certificates, Kraft Foods, Inc.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Debenture Backed Series 2003-11,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.875%, 11/01/31</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,160,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Everest Re Capital Trust, 6.20%, 3/29/34</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>513,840</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Security Assurance Holdings Ltd.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.60%, 7/15/03</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>380</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>123,705</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Phoenix Cos., Inc., 7.45%, 1/15/32</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,985</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>707,172</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,344,717</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 8.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Comcast Corp.:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7%, 9/15/55</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,083,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.625%, 5/15/56</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,724,300</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Corporate-Backed Trust Certificates, News</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>America Debenture Backed Series 2002-9,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.125%, 12/01/45</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>180</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>128,293</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,936,393</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 2.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nexen, Inc., 7.35%, 11/01/43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,875</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,836,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Wireless Telecommunication Services &#151; 0.9%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Structured Repackaged Asset-Backed Trust Securities,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Sprint Capital Corp. Debenture Backed Series</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2004-2, 6.50%, 11/15/28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,586</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,060,285</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Trust Preferreds &#151; 18.4%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,495,536</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Preferred Securities &#151; 124.8%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>153,095,105</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Warrants (i)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CMP Susquemanna Radio Holdings Corp.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(expires 3/26/19) (a)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,345</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Warrants &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Companies</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Ultra Short Real Estate ProShares</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,416,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investment Companies &#151; 1.1%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,416,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Par</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commercial Banks &#151; 2.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Mizuho Capital Investment 1 Ltd., 6.686% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,069,005</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Containers &amp; Packaging &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Impress Holdings BV, 4.256%, 9/15/13 (a)(c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>240</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>196,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Diversified Telecommunication Services &#151; 0.3%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Qwest Corp., 4.57%, 6/15/13 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>460</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>416,300</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Hotels, Restaurants &amp; Leisure &#151; 0.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Greektown Holdings, LLC, 10.75%, 12/01/13 (a)(f)(g)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>362</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,720</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Insurance &#151; 7.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AXA SA, 6.379% (a)(b)(c)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,150</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,853,429</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kingsway America, Inc., 7.50%, 2/01/14</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,700,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>QBE Insurance Group Ltd., 9.75%, 3/14/14 (a)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,975</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,003,765</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,557,194</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="60%"></TD>
     <TD width="3%"></TD>
     <TD width="15%"></TD>
     <TD width="19%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Bonds</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Machinery &#151; 0.2%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>AGY Holding Corp., 11%, 11/15/14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 460</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 289,800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Media &#151; 2.8%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>CMP Susquehanna Corp., 0%, 5/15/14 (a)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>180</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Comcast Holdings Corp., 2%, 11/15/29 (h)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,253,403</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Local Insight Regatta Hldgs, Inc., 11%, 12/01/17</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>902</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>216,480</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,470,063</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Metals &amp; Mining &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Freeport-McMoRan Copper &amp; Gold, Inc.,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.996%, 4/01/15 (c)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>170</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>149,175</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Oil, Gas &amp; Consumable Fuels &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>EXCO Resources, Inc., 7.25%, 1/15/11</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>63,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Paper &amp; Forest Products &#151; 0.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International Paper Co., 8.70%, 6/15/38</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>900</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>670,634</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Professional Services &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>FTI Consulting, Inc., 7.75%, 10/01/16</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>101,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Specialty Retail &#151; 0.1%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lazy Days&#146; R.V. Center, Inc., 11.75%, 5/15/12 (f)(g)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,182</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>70,920</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Corporate Bonds &#151; 13.9%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,076,486</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Long-Term Investments</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $306,206,665) &#151; 139.8%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>171,587,591</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Money Market Fund &#151; 22.7%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund, 0.64% (j)(k)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,905,614</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,905,614</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Short-Term Securities</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Cost &#151; $27,905,614) &#151; 22.7%</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,905,614</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investments (Cost &#151; $334,112,279*) &#151; 162.5%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>199,493,205</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities in Excess of Other Assets &#151; (5.1)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(6,318,479)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Shares, at Redemption Value &#151; (57.4)%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(70,427,967)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shares &#151; 100.0%</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 122,746,759</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* The cost and unrealized appreciation (depreciation) of investments as of April 30,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009, as computed for federal income tax purposes, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="42%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 332,648,831</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized appreciation</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 199,555</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Gross unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(133,355,181)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$(133,155,626)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(a) Security exempt from registration under Rule 144A of the Securities Act of 1933.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>These securities may be resold in transactions exempt from registration to qualified</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>institutional investors.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(b) Security is perpetual in nature and has no stated maturity date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(c) Variable rate security. Rate shown is as of report date.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(d) All or a portion of security held as collateral in connection with open reverse repur-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>chase agreements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(e) All or a portion of security has been pledged as collateral in connection with open</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>financial futures contracts.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(f) Non-income producing security.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(g) Issuer filed for bankruptcy and/or is in default of interest payments.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(h) Convertible security.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(i) Warrants entitle the Fund to purchase a predetermined number of shares of com-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>mon stock and are non-income producing. The purchase price and number of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>shares are subject to adjustment under certain conditions until the expiration date.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>37</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Schedule of Investments (concluded) </FONT><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Opportunity Trust (BPP)</FONT></B></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(j) Investments in companies considered to be an affiliate of the Fund, for purposes of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Section 2(a)(3) of the Investment Company Act of 1940, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="3%"></TD>
     <TD width="56%"></TD>
     <TD width="22%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Affiliate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Activity</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Funds, TempFund</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,905,614</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 60,011</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(k)</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Represents the current yield as of report date.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For Fund compliance purposes, the Fund&#146;s industry classifications refer to any one</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or more of the industry sub-classifications used by one or more widely recognized</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market indexes or ratings group indexes, and/or as defined by Fund management.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>This definition may not apply for purposes of this report, which may combine indus-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>try sub-classifications for reporting ease.</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="22%"></TD>
     <TD width="11%"></TD>
     <TD width="13%"></TD>
     <TD width="14%"></TD>
     <TD width="19%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Interest</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trade</FONT></B>&nbsp;</TD>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Closing</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counterparty</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.99%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/03/09</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 81,322</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 81,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.98%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/06/09</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,336,321</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,320,400</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Barclays Bank Plc</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.98%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/06/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/15/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,733,871</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,713,133</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10,151,514</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10,114,533</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial futures contracts purchased as of April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="18%"></TD>
     <TD width="21%"></TD>
     <TD width="18%"></TD>
     <TD width="23%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Depreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30-Year U.S.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Notes</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,867,414</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (28,976)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=4 align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>futures contracts sold as of April 30, 2009 were as follows:</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Face</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issue</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>151</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10-Year U.S.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Treasury Notes</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June 2009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$18,445,278</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 183,715</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; buy protection outstanding as of April</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="21%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD>
     <TD width="17%"></TD>
     <TD width="14%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Pay</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Depreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Altria Group, Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.03%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$4,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (48,230)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Nordstrom Inc.</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.20%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>June</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2014</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(144,301)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (192,531)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps on single-name issues &#151; sold protection outstanding as of</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="15%"></TD>
     <TD width="11%"></TD>
     <TD width="13%"></TD>
     <TD width="14%"></TD>
     <TD width="12%"></TD>
     <TD width="13%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Receive</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Notional</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fixed</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Counter-</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Credit</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Unrealized</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Issuer</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>party</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expiration</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rating</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Appreciation</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Philip Morris</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>International,</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deutsche</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Inc.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.73%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bank AG</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$4,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9,470</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Using the S&amp;P&#146;s ratings of the issuer.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The maximum potential amount the Fund may pay should a negative credit</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>event take place as defined under the terms of the agreement.</FONT></P>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Accounting Standards Board Statement of Financial Accounting</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Standards No. 157, &#147;Fair Value Measurements&#148; clarifies the definition of fair</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value, establishes a framework for measuring fair values and requires additional</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>disclosures about the use of fair value measurements. Various inputs are used in</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>determining the fair value of investments, which are as follows:</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1 &#151; price quotations in active markets/exchanges for identical securities</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2 &#151; other observable inputs (including, but not limited to: quoted prices</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for similar assets or liabilities in markets that are active, quoted prices for iden-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tical or similar assets in markets that are not active, inputs other than quoted</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>prices that are observable for the assets or liabilities (such as interest rates,</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>yield curves, volatilities, prepayment speeds, loss severities, credit risks and</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>default rates) or other market-corroborated inputs)</FONT><BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3 &#151; unobservable inputs based on the best information available in the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>circumstance, to the extent observable inputs are not available (including the</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s own assumptions used in determining the fair value of investments)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The inputs or methodology used for valuing securities are not necessarily an indi-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cation of the risk associated with investing in those securities. For information</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>about the Fund&#146;s policy regarding valuation of investments and other significant</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>accounting policies, please refer to Note 1 of the Notes to Financial Statements.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following table summarizes the inputs used as of April 30, 2009 in determin-</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ing the fair valuation of the Fund&#146;s investments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="24%"></TD>
     <TD width="35%"></TD>
     <TD width="18%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Valuation</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Inputs</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments*</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 1</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 90,529,616</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 183,715</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (28,976)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 2</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>105,936,221</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10,307,064)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,027,368</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,470</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 199,493,205</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 193,185</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (10,336,040)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>* Other financial instruments are swaps, futures and reverse repurchase</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>agreements. Swaps and futures are valued at the unrealized appreciation/</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>depreciation on the instrument. Reverse repurchase agreements are shown at</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market value.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following is a reconciliation of investments for unobservable inputs (Level 3)</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>were used in determining fair value:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="29%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Other</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investments in</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Financial</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Instruments</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Balance, as of October 31, 2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accrued discounts/premiums</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 61</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Realized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,430,938)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Change in unrealized appreciation/</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>depreciation</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(819,856)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9,470</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net sales</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,650,000)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net transfers into Level 3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,928,101</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Balance, as of April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,027,368</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9,470</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Included in the related net change in unrealized appreciation/depreciation on</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Statements of Operations.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>38 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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     <TD width="48%"></TD>
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     <TD width="10%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Statements of Assets and Liabilities</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred and</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Broad</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Enhanced</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital and</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Grade 2009</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Strategies</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Term Trust Inc.</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1</FONT></SUP></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund, Inc.</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund, Inc.</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(BCT)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(CII)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(BGT)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(PSW)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments at value &#151; unaffiliated</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 33,425,582</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 564,461,082</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 344,135,934</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 73,632,913</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments at value &#151; affiliated</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,780,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,151,730</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,610,483</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unrealized appreciation on foreign currency exchange contracts</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26,032</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unrealized appreciation on swaps</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>91,865</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,735</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,019</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>988,735</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash collateral for futures contracts</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,400,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency at value</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,619</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>856,104</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>381</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments sold receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,724,206</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,385,114</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>47,248</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,089,603</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,079,507</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swaps receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>960</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,213</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,037</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>172,947</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Margin variation receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>54,186</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends receivable &#151; unaffiliated</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,487,720</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>130,193</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment advisory fees receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>134</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Principal paydown receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160,005</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Income receivable &#151; affiliated</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>352</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Other assets</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,013</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>69,403</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>150,427</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Prepaid expenses</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,313</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,203</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>52,858</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,531</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total assets</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,411,362</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>569,327,188</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>364,003,107</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>103,497,030</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unrealized depreciation on swaps</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>422,017</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>168,416</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>54,000,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unrealized depreciation on unfunded corporate loans</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>51,632</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written at value</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,442,493</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,272,644</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,060,551</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unrealized depreciation on foreign currency exchange contracts</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,075,040</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments purchased payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,492,511</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,273,968</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest expense payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,879</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60,237</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,224</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Income dividends payable &#151; Common Shares</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>106,830</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>54,857</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment advisory fees payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>376,697</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>159,143</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>47,559</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swaps payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>375</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>845,950</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,626</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Officer's and Directors'/Trustees' fees payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,455</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>727</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>54,326</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>149</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Other affiliates payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,952</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,436</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>924</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Other accrued expenses payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,107</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>90,681</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>31,930</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Other liabilities</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,465</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total liabilities</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,300,460</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,406,061</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60,059,044</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,390,236</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Shares at Redemption Value</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$25,000 per share liquidation preferrence, plus unpaid dividends</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>58,811,150</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,254,342</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 34,110,902</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 552,921,127</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 245,132,913</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 57,852,452</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders Consist of</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Paid-in capital</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 37,922,428</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 792,770,863</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 437,555,254</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 238,901,924</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Undistributed (distributions in excess of) net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,560,434</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(34,555,889)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,519,372)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(199,202)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accumulated net realized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(7,122,805)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(60,757,680)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(50,239,710)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(118,494,972)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized appreciation/depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,249,155)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(144,536,167)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(136,663,259)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(62,355,298)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 34,110,902</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 552,921,127</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 245,132,913</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 57,852,452</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value per Common Share</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,9,10</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 11.54</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 12.94</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10.41</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5.62</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Consolidated Statement of Assets and Liabilities.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments at cost &#151; unaffiliated</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 35,519,186</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 706,629,937</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 478,378,291</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 135,994,488</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments at cost &#151; affiliated</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,780,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,151,730</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 27,610,483</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency at cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9,142</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 856,091</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>368</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Proceeds from options written</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,076,704</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares par value per share</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.001</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.10</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares outstanding</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,352</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,610</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares par value per share</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.01</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.10</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.001</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.10</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares outstanding</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,957,093</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42,731,442</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,545,239</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,295,846</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares authorized</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>200 Million</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>200 Million</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unlimited</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>200 Million</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>39</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Statements of Assets and Liabilities (concluded)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred and</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Equity</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Advantage</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Strategies</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Opportunity</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund, Inc.</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009 (Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(BTZ)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(PSY)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(BPP)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments at value &#151; unaffiliated</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 618,588,730</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 389,135,342</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&nbsp;$ </FONT>171,587,591</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments at value &#151; affiliated</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>110,469,494</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,858,851</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,905,614</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unrealized appreciation on swaps</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,307</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18,940</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,470</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,216</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>571</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash collateral for futures contracts</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>600,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,908,600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency at value</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>44</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>475</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,620,528</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,307,554</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,166,941</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swaps receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18,165</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16,147</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,073</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Margin variation receivable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35,063</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends receivable &#151; unaffiliated</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,026,615</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>155,194</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>58,707</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends receivable &#151; affiliated</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>289</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>231</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>309</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Other assets</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50,512</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>33,525</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41,450</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Prepaid expenses</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>135,569</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>53,244</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>49,487</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total assets</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>741,544,469</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>419,522,691</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>203,854,188</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Liabilities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unrealized depreciation on swaps</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>685,720</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>385,061</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>192,531</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written at value</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,655,965</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>55,599,144</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,532,310</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,114,533</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Margin variation payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>87,405</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest expense payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>167,936</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,943</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>29,193</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Income dividends payable &#151; Common Shares</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>805,068</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>268,872</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment advisory fees payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>373,142</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>202,401</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>109,324</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swaps payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,704</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,058</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,029</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Officer's and Directors'/Trustees' fees payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>52,033</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>34,579</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>42,906</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Other affiliates payable</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,832</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,960</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,288</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Other accrued expenses payable</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>320,259</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>126,901</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>175,658</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total liabilities</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60,791,208</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,599,085</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,679,462</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Shares at Redemption Value</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$25,000 per share liquidation preference, plus unpaid dividends</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>231,034,617</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>172,990,679</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>70,427,967</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 449,718,644</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 238,932,927</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 122,746,759</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders Consist of</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Paid&#151;in capital</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1,162,690,058</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 942,284,951</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 427,796,553</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Undistributed (distributions in excess of) net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10,505,565)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,560,550</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>926,651</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accumulated net realized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(335,736,920)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(412,226,968)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(171,329,065)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net unrealized appreciation/depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(366,728,929)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(294,685,606)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(134,647,380)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 449,718,644</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 238,932,927</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 122,746,759</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value per Common Share</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,8,9</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8.68</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5.87</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6.65</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments at cost &#151; unaffiliated</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 985,982,951</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 683,669,352</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 306,206,665</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments at cost &#151; affiliated</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 110,469,494</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15,858,851</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 27,905,614</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency at cost</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 44</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 459</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Premiums received from options written</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,525,366</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares par value per share</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.001</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.10</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.001</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares outstanding</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,240</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,914</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,817</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares par value per share</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.001</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.10</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 0.001</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares outstanding</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>51,828,157</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,726,447</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18,455,769</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares authorized</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unlimited</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>200 Million</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unlimited</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>40 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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     <TD width="51%"></TD>
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     <TD width="10%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Statements of Operations</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Broad</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Enhanced</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Grade 2009</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>and Income</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Term Trust Inc.</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1</FONT></SUP></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund, Inc.</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months Ended April 30, 2009 (Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(BCT)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(CII)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right>&nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(BGT)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Income</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,084,163</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,162</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15,683,044</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,158,804</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign withholding tax</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(61,689)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Income &#151; affiliated</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,963</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>117,920</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,951</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Facility and other fees</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>236,640</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,088,126</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,216,197</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,934,635</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expenses</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment advisory</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>94,465</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,238,504</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,355,134</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Borrowing costs</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>186,411</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accounting services</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>74,173</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>26,466</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Professional</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,741</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>61,582</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>108,570</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Commissions for Preferred Shares</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>49,911</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Transfer agent</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>134</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,897</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,765</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Officer and Directors/Trustees</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,627</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,977</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,951</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Custodian</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,016</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,696</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Printing</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,314</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,795</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45,241</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Registration</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>735</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,689</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,473</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Miscellaneous</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,572</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,582</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>54,155</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses excluding interest expense and excise tax</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>143,588</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,528,215</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,881,773</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest expense</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,834</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>957,677</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Excise tax</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,458</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>170,880</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,528,215</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,839,450</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Less fees waived by advisor</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(94,820)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(362,723)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Less fees paid indirectly</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,202)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>76,060</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,528,215</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,475,525</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,012,066</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,687,982</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,459,110</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Realized and Unrealized Gain (Loss)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain (loss) from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(64,787)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(102,120,893)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(27,314,395)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Futures and swaps</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,633,196)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(617,742)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,179,288)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,752,145</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,150,221</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,697,983)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(62,986,490)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(22,343,462)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net change in unrealized appreciation/depreciation on:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>234,258</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>62,613,115</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,208,128</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Futures and swaps</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,300,662)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,194,743)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>398,524</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,287,486</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(736)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(7,654,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Unfunded corporate loans</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>115,405</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,066,404)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>61,705,122</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,067,557</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total realized and unrealized loss</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4,764,387)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,281,368)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,275,905)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders From</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(513,027)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Increase (Decrease) in Net Assets Applicable to Common</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shareholders Resulting from Operations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (3,752,321)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,406,614</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7,670,178</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Consolidated Statement of Operations.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>41</FONT></P>
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<TR vAlign=bottom>
     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Statements of Operations (concluded)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred and</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate Income</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred and</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Strategies</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Equity Advantage</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Strategies</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Opportunity</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months Ended April 30, 2009 (Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund, Inc. (PSW)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust (BTZ)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund, Inc. (PSY)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust (BPP)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment Income</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,193,718</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22,724,607</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20,943,130</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,060,215</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,223,319</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,126,655</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,181,475</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,889,040</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Income &#151; affiliated</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,608</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>126,627</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>99,137</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>63,379</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,492,645</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>32,977,889</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,223,742</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,012,634</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expenses</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment advisory</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>343,940</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,492,250</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,501,656</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>781,510</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Professional</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>49,668</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>76,181</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>57,451</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>51,771</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Commissions for preferred shares</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>43,510</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>223,155</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>209,806</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>84,914</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Transfer agent</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,693</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21,284</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,885</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,498</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Accounting services</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,465</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>89,424</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>66,201</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>47,506</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Printing</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,113</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>92,196</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41,232</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,278</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Custodian</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,317</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,513</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,977</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,677</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Registration</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,306</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,696</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,954</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,126</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Officer and Directors/Trustees</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,119</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,243</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,994</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14,683</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Miscellaneous</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28,957</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>74,154</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>57,784</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36,049</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses excluding interest expense</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>530,088</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,138,096</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,058,940</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,090,012</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest expense</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>68,721</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,391,946</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>178,103</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>313,736</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>598,809</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,530,042</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,237,043</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,403,748</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Less fees waived by advisor</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,150)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(14,192)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,701)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,837)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Less fees paid indirectly</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(606)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(665)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>596,053</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,515,846</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,234,677</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,397,911</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,896,592</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28,462,043</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,989,065</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,614,723</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Realized and Unrealized Gain (Loss)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain (loss) from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(44,702,534)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(179,398,894)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(147,118,699)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(91,974,803)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Futures and swaps</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,066,162)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,104,785)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9,385,889)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4,216,346)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,366</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22,255</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>34,450</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,348</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,134,486</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(46,764,330)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(178,346,938)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(156,470,138)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(96,189,801)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net change in unrealized appreciation/depreciation on:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>29,041,941</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>86,888,893</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>73,495,194</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>58,035,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Futures and swaps</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>607,761</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4,276,885</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,798,797</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,027,644</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4,272)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(158,263)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(32,957)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,043)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,438,064</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>29,645,430</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>93,445,579</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,261,034</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>59,061,601</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total realized and unrealized loss</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(17,118,900)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(84,901,359)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(81,209,104)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(37,128,200)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders From</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(461,748)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,028,125)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,320,269)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(455,588)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Decrease in Net Assets Applicable to Common Shareholders Resulting from Operations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (12,684,056)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (58,467,441)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (58,540,308)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (25,969,065)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>42 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Statements of Changes in Net Assets</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade</FONT></B>&nbsp;</TD>
     <TD colSpan=4 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2009 Term Trust Inc. (BCT)</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and Income Fund (CII)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period January 1,</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008 to</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>December 31,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Increase (Decrease) in Net Assets:</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Operations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,012,066</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,227,860</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6,687,982</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,834,944</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,828,423</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain (loss)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,697,983)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(278,156)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(62,986,490)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,942,502</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,442,607</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net change in unrealized appreciation/depreciation</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,066,404)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(916,689)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>61,705,122</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(83,432,417)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(17,410,396)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) in net assets resulting from operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,752,321)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>33,015</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,406,614</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(74,654,971)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,860,634</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Dividends and Distributions to Shareholders From</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,738,771)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(41,449,498)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,820,467)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4,178,081)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(7,621,956)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(25,569,419)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(7,292,188)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Decrease in net assets resulting from dividends and distributions to shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,738,771)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(41,449,498)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(17,734,611)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(29,747,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Share Transactions</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Value of shares issued resulting from reorganization</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>420,968,153</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total increase (decrease) in net assets</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3,752,321)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,705,756)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>384,925,269</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(92,389,582)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(18,886,866)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>37,863,223</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>39,568,979</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>167,995,858</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>260,385,440</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>279,272,306</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>End of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 34,110,902</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 37,863,223</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 552,921,127</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 167,995,858</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 260,385,440</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>End of period undistributed (distributions in excess of) net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,560,434</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,548,368</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (34,555,889)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 205,627</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Consolidated Statement of Changes in Net Assets.</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=3 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate Income Trust (BGT)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income Strategies Fund, Inc. (PSW)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>January 1, 2008</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>to October 31,</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>December 31,</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Increase (Decrease) in Net Assets Applicable to Common Shareholders:</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Operations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 13,459,110</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 33,370,850</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 47,903,772</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,896,592</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 17,531,692</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(22,343,462)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(19,428,459)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10,326,522)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(46,764,330)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(40,404,468)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net change in unrealized appreciation/depreciation</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,067,557</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(136,762,427)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(22,345,656)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>29,645,430</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(83,863,786)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders from net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(513,027)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,542,312)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12,723,631)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(461,748)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4,921,335)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) in net assets applicable to Common Shareholders</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>resulting from operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7,670,178</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(128,362,348)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,507,963</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12,684,056)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(111,657,897)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Dividends and Distributions to Common Shareholders From</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(27,127,153)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(24,133,870)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(26,833,571)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,917,238)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12,521,666)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(8,473,282)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(545,246)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Decrease in net assets resulting from dividends and distributions</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>to Common Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(27,127,153)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(24,133,870)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(35,306,853)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,917,238)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13,066,912)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Share Transactions</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reinvestment of common dividends</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>820,433</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,886</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total decrease in net assets</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(19,456,975)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(152,496,218)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(31,978,457)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(18,577,408)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(124,724,809)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>264,589,888</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>417,086,106</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>449,064,563</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>76,429,860</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>201,154,669</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>End of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 245,132,913</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 264,589,888</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 417,086,106</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 57,852,452</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 76,429,860</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>End of period undistributed (distributions in excess of) net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (5,519,372)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8,661,698</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 219,332</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (199,202)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,283,192</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>43</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Statements of Changes in Net Assets</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and</FONT></B>&nbsp;</TD>
     <TD colSpan=3 align=center>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Income</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Equity Advantage Trust (BTZ)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Strategies Fund, Inc. (PSY)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Increase (Decrease) in Net Assets Applicable to Common Shareholders:</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Operations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 28,462,043</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 68,908,426</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24,989,065</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 70,160,283</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(178,346,938)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(113,133,432)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(156,470,138)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(147,042,661)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net change in unrealized appreciation/depreciation</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>93,445,579</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(408,221,553)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,261,034</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(333,625,419)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders from net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,028,125)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(17,100,517)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,320,269)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(19,937,495)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net decrease in net assets applicable to Common Shareholders resulting from operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(58,467,441)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(469,547,076)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(58,540,308)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(430,445,292)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Dividends and Distributions to Common Shareholders From</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(40,425,962)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(46,857,132)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(26,315,321)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(46,831,403)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(43,518,226)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9,002,427)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Decrease in net assets resulting from dividends and distributions to Common Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(40,425,962)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(90,375,358)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(26,315,321)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(55,833,830)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Share Transactions</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reinvestment of common dividends</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>656,314</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total decrease in net assets applicable to Common Shareholders</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(98,893,403)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(559,922,434)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(84,199,315)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(486,279,122)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>548,612,047</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,108,534,481</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>323,132,242</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>809,411,364</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>End of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 449,718,644</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 548,612,047</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 238,932,927</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 323,132,242</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>End of period undistributed (distributions in excess of) net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (10,505,565)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,486,479</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,560,550</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7,207,075</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Opportunity Trust (BPP)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>January 1, 2008</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>to October 31,</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>December 31,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Increase (Decrease) in Net Assets Applicable to Common Shareholders:</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Operations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 11,614,723</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 27,233,861</FONT>&nbsp;</TD>
     <TD colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 37,729,277</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized loss</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(96,189,801)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(47,985,932)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(24,690,221)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net change in unrealized appreciation/depreciation</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>59,061,601</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(149,715,592)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(61,889,014)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Preferred Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(455,588)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,653,232)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(11,458,715)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(87,490)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net decrease in net assets applicable to Common Shareholders resulting from operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(25,969,065)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(176,120,895)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(60,396,163)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Dividends and Distributions to Common Shareholders From</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13,079,067)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(15,206,928)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(29,219,599)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(312,510)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5,480,035)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,820,986)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Decrease in net assets resulting from dividends and distributions to Common Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13,079,067)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(20,686,963)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(32,353,095)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Share Transactions</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reinvestment of common dividends</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>484,056</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>101,702</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>770,755</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total decrease in net assets</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(38,564,076)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(196,706,156)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(91,978,503)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Beginning of period</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>161,310,835</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>358,016,991</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>449,995,494</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>End of period</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 122,746,759</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 161,310,835</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 358,016,991</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>End of period undistributed net investment income</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 926,651</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,846,583</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (2,571,328)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>44 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV>

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<TR>
     <TD width="75%"></TD>
     <TD width="14%"></TD>
     <TD width="10%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Statements of Cash Flows</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred and</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Equity</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Advantage</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months Ended April 30, 2009 (Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust, Inc. (BGT)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Trust (BTZ)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Cash Provided by Operating Activities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) in net assets resulting from operations, excluding dividends to Preferred Shareholders</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8,183,205</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ (56,439,316)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Decrease in receivables</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,487,518</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9,371,241</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Increase in prepaid expenses and other assets</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(62,758)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13,694)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Increase (decrease) in other liabilities</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>384,537</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4,203,629)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized and unrealized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,249,030</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>86,450,217</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Amortization of premium and discount on investments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(949,688)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>74,835</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Proceeds from sales and paydowns of long-term investments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>108,857,166</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>255,013,236</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Purchases of long-term securities</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(43,594,589)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(178,628,324)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net (purchases) sales of short-term investments</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,650,981)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>92,566,359</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Premiums received from options written</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>29,731,457</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Premiums paid on closing options written</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(23,645,491)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net cash provided by operating activities</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>82,903,440</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>210,276,891</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Cash Used for Financing Activities</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash receipts from borrowings</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27,000,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash payments from borrowings</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(96,150,000)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash receipts from reverse repurchase agreements</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,209,375</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>75,433,383</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash payments from reverse repurchase agreements</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,209,375)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(243,346,311)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Collateral for futures</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(600,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash dividends paid to common shareholders</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(27,129,733)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(40,515,297)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash dividends paid to preferred shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(522,803)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,091,589)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net cash used for financing activities</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(96,802,536)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(211,119,814)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Cash Impact from Foreign Currency Fluctuations</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash impact from foreign currency fluctuations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>194,890</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Cash</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net decrease in cash</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13,704,206)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(842,920)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash at beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15,549,045</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>856,180</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net cash at end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,844,839</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 13,260</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Cash Flow Information</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Cash paid during the period for interest</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,025,034</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,487,768</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>45</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Financial Highlights</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=5 align=left><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade Term Trust Inc. (BCT)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year Ended October 31,</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2006</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2005</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2004</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Per Share Operating Performance</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 12.80</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 13.38</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 13.79</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 14.63</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15.98</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 16.02</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.34</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD colSpan=2 align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.42</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.48</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.65</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.80</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.61</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized and unrealized gain (loss)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.60)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.41)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.01</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.05)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.87)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.25</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) from investment operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.26)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.01</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.49</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.60</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.07)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.86</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.59)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.90)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.42)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.03)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.90)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.02)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.25)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total dividends and distributions</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.59)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.90)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.44)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.28)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.90)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 11.54</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 12.80</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 13.38</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 13.79</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 14.63</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15.98</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market price, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 11.19</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 12.50</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15.15</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15.08</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15.86</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15.80</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investment Return</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on net asset value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9.84)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.07)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.95%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.53%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.82)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.52%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on market price</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10.48)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13.82)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.60%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.44%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.74%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.45%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ratios to Average Net Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and excluding interest expense and excise tax</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.30%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.27%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.16%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.14%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.19%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.11%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.46%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.95%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.86%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.14%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.37%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.48%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.04%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.65%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.86%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.14%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.37%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.48%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.18%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.09%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.50%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.50%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.23%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.83%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Supplemental Data</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net assets, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 34,111</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 37,863</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 39,569</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 40,781</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 43,276</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 47,255</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,273</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19,263</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements average daily balance (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,615</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7,865</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22,055</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Portfolio turnover</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>114%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>116%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Asset coverage, end of period per $1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 16,007</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,453</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on average shares outstanding.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>returns exclude the effects of sales charges.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate total investment return.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Annualized.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>46 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Financial Highlights</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=6 align=right><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc. (CII)</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>January 1,</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30,</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008 to</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2004</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP></B><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>to</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year Ended December 31,</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>December 31,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2006</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2005</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2004</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Per Share Operating Performance</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 13.78</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21.36</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.91</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20.31</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20.76</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.10</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.17</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.23</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.31</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.37</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.46</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.46</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized and unrealized gain (loss)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.04)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(6.36)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.58</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.69</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.29</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.84</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) from investment operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.13</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(6.13)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.89</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.06</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.75</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.30</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.97)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.23)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.34)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.33)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.47)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.48)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.62)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.10)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.13)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.73)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.11)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.60)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.01)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total dividends and distributions</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.97)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.45)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.44)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.46)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.20)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.60)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital charges with respect to the issuance of shares</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.04)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 12.94</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 13.78</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21.36</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.91</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20.31</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20.76</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market price, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 11.38</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 12.37</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20.06</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20.41</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 17.21</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 18.32</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investment Return</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on net asset value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.12%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(29.46)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.79%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21.70%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.69%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12.30%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on market price</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.05%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(32.58)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.47%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27.95%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.52%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5.36)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ratios to Average Net Assets</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and excluding interest expense</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.96%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.01%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.19%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.42%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.47%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.20%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.96%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.10%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.96%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.54%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.96%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.96%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.96%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.10%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.96%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.54%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.96%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.19%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.54%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.46%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.36%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.75%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.28%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.52%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Supplemental Data</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net assets, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 552,921</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 167,996</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 260,385</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 279,272</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 260,638</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 266,345</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan outstanding, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 100,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 109,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 109,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Average loan outstanding during the period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 38,788</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 107,504</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 109,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 98,750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Portfolio turnover</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>36%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>45%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>63%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>38%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>61%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Asset coverage, end of period per $1,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,793</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,391</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,444</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Commencement of operations.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period, reflects a deduction of $0.90 per share sales charge from initial offering price of $20.00 per share.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on average shares outstanding.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>returns exclude the effects of sales charges.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate total investment return.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Annualized.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>47</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Financial Highlights</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=5 align=right><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust (BGT)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>January 1,</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>August 30,</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008 to</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2004</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP></B><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>to</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year Ended December 31,</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD align=center>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>December 31,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2006</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2005</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2004</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Per Share Operating Performance</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 11.24</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 17.71</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.11</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.13</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.21</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.10</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.58</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.42</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.03</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.99</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.64</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.33</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized and unrealized gain (loss)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.24)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(6.62)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.39)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.06)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.17)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.35</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Preferred Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.02)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.24)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.54)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.48)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.33)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.04)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.01)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.00)</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) from investment operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.32</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5.44)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.10</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.44</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.64</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Common Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.15)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.03)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.14)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.44)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.22)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.37)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.02)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.00)</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.36)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total dividends and distributions</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.15)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.03)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.50)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.46)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.22)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.37)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital charges with respect to issuance of:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.04)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.12)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total capital charges</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.16)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10.41</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 11.24</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 17.71</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.11</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.13</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.21</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market price, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9.85</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9.63</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 15.78</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.27</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 17.16</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 18.63</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investment Return</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>5</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on net asset value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.03%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(31.62)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.98%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.93%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.63%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.57%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on market price</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16.00%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(34.24)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10.92)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>21.31%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.34)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5.00)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ratios to Average Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly and excluding</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interest expense</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.34%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.21%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.16%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.19%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.15%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.97%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.18%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.89%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.33%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.43%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.23%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.97%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.50%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.22%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.67%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.75%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.56%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.26%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11.87%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.56%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.83%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.38%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.52%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.04%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.45%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.75%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.88%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.51%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.71%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.62%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income to Common Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11.42%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.81%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.95%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.87%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.81%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.42%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Supplemental Data</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net assets applicable to Common Shareholders, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 245,133</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 264,590</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 417,086</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 449,065</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 449,219</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 451,126</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares outstanding at liquidation preference, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 58,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 58,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 243,450</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 243,450</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 243,450</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 243,450</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Loan outstanding, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 54,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 123,150</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Average loan outstanding during the period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 78,005</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 71,542</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 26,108</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements average daily balance (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 419</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 238</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,524</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19,562</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,722</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 114</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Portfolio turnover</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>41%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>50%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>46%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Asset coverage per Preferred Share, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 129,228</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 137,505</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 67,849</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 73,810</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 71,139</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 71,330</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Commencement of operations.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period, reflects a deduction of $0.90 per share sales charge from initial offering price of $20.00 per share.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on average shares outstanding.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Amount is less than $(0.01) per share.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns exclude the effects of sales charges.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate total investment return.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Do not reflect the effect of dividends to Preferred Shareholders.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Annualized.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>48 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Financial Highlights</FONT>&nbsp;</TD>
     <TD colSpan=6 align=right><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Corporate Income Strategies Fund, Inc. (PSW)</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
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     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
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     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year Ended October 31,</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2006</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2005</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2004</FONT></B>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Per Share Operating Performance</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7.43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.54</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.25</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.36</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 23.69</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24.38</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.48</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.70</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.01</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.14</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.16</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.19</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized and unrealized gain (loss)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.68)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12.06)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.41)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.07</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.09)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.70)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders from net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.04)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.48)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.71)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.63)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.40)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.18)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) from investment operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.24)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10.84)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.11)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.58</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.67</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.31</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Common Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.57)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.22)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.18)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.69)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.00)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.00)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.05)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.42)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total dividends and distributions</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.57)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.27)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.60)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.69)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.00)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.00)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5.62</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7.43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.54</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.25</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.36</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 23.69</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market price, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5.55</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7.00</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 17.29</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21.26</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21.03</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.84</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investment Return</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on net asset value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(15.87)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(58.09)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(5.03)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.97%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.25%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.86%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on market price</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(11.81)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(55.38)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(12.05)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.69%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.73%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.44%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ratios to Average Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly and excluding</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interest expense</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.78%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.48%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.29%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.29%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.26%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.26%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.01%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.00%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.32%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.29%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.26%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.26%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.02%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.00%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.32%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.29%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.26%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.27%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>16.51%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.79%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.38%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.70%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.23%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.04%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.56%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.03%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.29%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.84%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.71%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.76%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income to Common Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14.95%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.76%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.09%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.86%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.52%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.28%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Supplemental Data</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net assets applicable to Common Shareholders, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 57,852</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 76,430</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 201,155</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 228,734</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 229,850</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 243,492</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares outstanding at liquidation preference, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 40,250</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 68,250</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 136,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 136,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 136,500</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 136,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,061</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,024</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 590</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements average daily balance (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,453</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 25,692</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,690</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Portfolio turnover</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>119%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>88%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>27%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Asset coverage per Preferred Share, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 60,936</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 53,009</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 61,846</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 66,907</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 67,115</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 69,600</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on average shares outstanding.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns exclude the effects of sales charges.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate total investment return.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Do not reflect the effect of dividends to Preferred Shareholders.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Annualized.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Amounts have been recalculated to conform with current period presentation.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>49</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Financial Highlights</FONT>&nbsp;</TD>
     <TD colSpan=4 align=right><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (BTZ)</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>December 27,</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2006</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP></B><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>to</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; April 30, 2009</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right>&nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Per Share Operating Performance</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10.59</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21.39</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 23.88</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.55</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.33</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.25</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized and unrealized loss</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.64)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10.06)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.86)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders from net investment income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.04)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.33)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.31)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net decrease from investment operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.13)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9.06)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.92)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Common Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
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     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.78)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.90)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.93)</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.84)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.47)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total dividends and distributions</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.78)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.74)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.40)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital charges with respect to issuance of:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
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     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.04)</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.13)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total capital charges</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.17)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8.68</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10.59</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21.39</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market price, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8.05</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9.36</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 18.65</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investment Return</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on net asset value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(8.73)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(44.27)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4.42)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on market price</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4.23)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(43.51)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(20.34)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ratios to Average Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly and excluding interest expense</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.39%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.21%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.04%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.01%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.65%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.88%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.02%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.65%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.90%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12.69%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.63%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.50%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.90%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.89%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.64%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income to Common Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11.79%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.74%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.86%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Supplemental Data</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net assets applicable to Common Shareholders, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 449,719</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 548,612</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,108,534</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares outstanding at liquidation preference, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 231,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 231,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 462,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 55,599</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 223,512</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 88,291</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements average daily balance (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 93,409</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 107,377</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 96,468</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Portfolio turnover</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>126%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>35%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Asset coverage per Preferred Share, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 73,675</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 84,384</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 89,737</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Commencement of operations.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period, reflects a deduction of $1.12 per share sales charge from initial offering price of $25.00 per share.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on average shares outstanding.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns exclude the effects of sales charges.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate total investment return.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Do not reflect the effect of dividends to Preferred Shareholders.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Annualized.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>50 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Financial Highlights</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=4 align=right><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Income Strategies Fund, Inc. (PSY)</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
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     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
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     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year Ended October 31,</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2006</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2005</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2004</FONT></B>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Per Share Operating Performance</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7.96</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.93</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.36</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.26</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 23.48</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24.53</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.61</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.73</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.02</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.03</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.14</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized and unrealized gain (loss)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.99)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(11.84)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.35)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.32</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.91)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.78)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Preferred Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.06)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.49)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.73)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.65)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.40)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.18)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.01)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) from investment operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.44)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10.60)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.06)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.70</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.78</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.17</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Common Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.65)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.15)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.16)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.51)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.00)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.13)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.09)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.22)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.21)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.09)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total dividends and distributions</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.65)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.37)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.37)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.60)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.00)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.22)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5.87</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7.96</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.93</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.36</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.26</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 23.48</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market price, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6.05</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8.10</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 16.94</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20.12</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21.20</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 22.87</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investment Return</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on net asset value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(17.88)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(55.71)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4.35)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.77%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.73%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.22%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on market price</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(16.83)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(46.97)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9.65)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.77%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.43%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.12%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ratios to Average Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly and excluding</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interest expense</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.65%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.40%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.23%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.23%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.20%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.19%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.79%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.90%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.27%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.23%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.20%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.19%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.79%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.90%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.27%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.23%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.20%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.19%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20.01%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.71%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.29%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>9.26%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.96%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.93%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.86%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.04%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.34%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.96%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.73%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.74%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income to Common Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18.15%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.67%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.95%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.30%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.23%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.19%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Supplemental Data</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net assets applicable to Common Shareholders, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 238,933</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 323,132</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 809,411</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 907,897</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 903,601</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 952,973</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares outstanding at liquidation preference, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 172,850</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 275,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 550,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 550,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 550,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 550,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding, end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,532</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 54,369</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements average daily balance (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23,965</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 94,908</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 14,375</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Portfolio turnover</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>120%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>81%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>23%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Asset coverage per Preferred Share, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 59,578</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 54,408</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 61,817</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 66,294</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 66,077</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 68,319</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on average shares outstanding.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns exclude the effects of sales charges.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate total investment return.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Do not reflect the effect of dividends to Preferred Shareholders.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Annualized.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Amounts have been recalculated to conform with current period presentation.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>51</FONT></P>
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     <TD align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Financial Highlights</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD colSpan=4 align=right><B><FONT color=#0035c4 size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>BlackRock Preferred Opportunity Trust (BPP)</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Period</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Six Months</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>January 1,</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>February 28,</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ended</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008 to</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2003</FONT></B><B><SUP><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP></B><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>to</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Year Ended December 31,</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30, 2009</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>December 31,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(Unaudited)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2006</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2005</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2004</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2003</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Per Share Operating Performance</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
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     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8.77</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.47</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24.52</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24.43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 25.88</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 25.58</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 23.88</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.63</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.48</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.05</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.05</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.11</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.22</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.72</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized and unrealized gain (loss)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.02)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(10.74)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4.72)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.62</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.82)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.33</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.93</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Preferred Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.02)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.31)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.62)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.46)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.26)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.16)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.10)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.12)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.13)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.02)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net increase (decrease) from investment operations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.41)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9.57)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(3.29)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.90</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.37</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.55</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions to Common Shareholders from:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.71)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.83)</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.59)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.58)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.74)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.00)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.66)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net realized gain</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.02)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.42)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.61)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.07)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Tax return of capital</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.30)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.15)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total dividends and distributions</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.71)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.13)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.76)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.00)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.35)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2.07)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1.66)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital charges with repect to:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common shares</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.05)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred shares</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.14)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total capital charges</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(0.19)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6.65</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8.77</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19.47</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24.52</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24.43</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 25.88</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 25.58</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Market price, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7.08</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8.51</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 17.31</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 26.31</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24.20</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 25.39</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 24.83</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Investment Return</FONT></B><B><SUP><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>4</FONT></SUP></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on net asset value</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(15.77)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(51.22)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(13.86)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.89%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.81%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.15%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>14.65%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on market price</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(7.59)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(46.76)%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(28.62)%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17.98%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.83%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11.01%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.28%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb colSpan=2 align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Ratios to Average Net Assets Applicable to Common Shareholders</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly and</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>excluding interest expense</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.70%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.39%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.24%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.25%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.22%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.19%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.16%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses after fees waived and paid indirectly</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.19%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.96%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.45%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.62%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.51%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.44%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.52%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total expenses</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.20%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.96%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.46%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.62%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.51%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.44%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.52%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>18.19%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10.53%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.90%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.46%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.37%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.66%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.35%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends to Preferred Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.72%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.19%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.70%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.89%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.27%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.62%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.48%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net investment income to Common Shareholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17.47%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.34%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.20%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6.58%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.10%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8.04%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7.87%</FONT><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp; &nbsp; &nbsp;<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Supplemental Data</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e9f1fb align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net assets applicable to Common Shareholders,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 122,747</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 161,311</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 358,017</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 449,995</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 447,190</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 473,809</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 468,243</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares outstanding at liquidation preference,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 70,425</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 110,400</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 220,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 220,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 220,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 220,800</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 220,841</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements outstanding,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>end of period (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,115</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 44,281</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,486</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reverse repurchase agreements average daily balance (000)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21,161</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 51,995</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 903</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,303</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,904</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 782</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 19,822</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Portfolio turnover</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>15%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>121%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>97%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>91%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>77%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>88%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>98%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Asset coverage per Preferred Share, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 68,575</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 61,540</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 65,554</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 75,965</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 75,642</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 78,650</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 78,021</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Commencement of operations.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Net asset value, beginning of period, reflects a deduction of $1.12 per share sales charge from initial offering price of $25.00 per share.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Based on average shares outstanding.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns.</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total investment returns exclude the effects of sales charges.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Aggregate total investment return.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Do not reflect the effect of dividends to Preferred Shareholders.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Annualized.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>See Notes to Financial Statements.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>52 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements </FONT><FONT color=#0035c4 size=2 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>(Unaudited)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>1. Organization and Significant Accounting Policies</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Broad Investment Grade 2009 Term Trust Inc. (&#147;Broad Investment</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Grade&#148;), BlackRock Enhanced Capital and Income Fund, Inc. (&#147;Capital and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Income&#148;), BlackRock Preferred and Corporate Income Strategies Fund, Inc.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(&#147;Preferred and Corporate&#148;) and BlackRock Preferred Income Strategies</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund, Inc. (&#147;Preferred Income&#148;) are registered as diversified, closed-end</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>management investment companies under the Investment Company Act of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1940, as amended (the &#147;1940 Act&#148;). BlackRock Floating Rate Income Trust</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(formerly BlackRock Global Floating Rate Income Trust ) (&#147;Floating Rate&#148;),</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust (&#147;Preferred and Equity&#148;)</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and BlackRock Preferred Opportunity Trust (&#147;Preferred Opportunity&#148;) are</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>registered as non-diversified, closed-end management investment compa-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>nies under the 1940 Act. Broad Investment Grade, Capital and Income,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate and Preferred Income are organized as Maryland</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>corporations. Floating Rate, Preferred and Equity and Preferred Opportunity</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are organized as Delaware statutory trusts. Broad Investment Grade, Capital</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Income, Floating Rate, Preferred and Corporate, Preferred and Equity,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income and Preferred Opportunity are individually referred to as</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>a &#147;Fund&#148; and collectively as the &#147;Funds.&#148; On November 29, 2007, Broad</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment Grade&#146;s Board of Directors approved a Plan of Liquidation and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dissolution, which provided Broad Investment Grade would liquidate sub-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>stantially all of its assets on or about the close of business on December</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>31, 2009. The Funds&#146; financial statements are prepared in conformity with</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>accounting principles generally accepted in the United States of America,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>which may require the use of management accruals and estimates. Actual</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>results may differ from these estimates. The Funds determine and make</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>available for publication the net asset value of their Common Shares on a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>daily basis.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>On December 3, 1999, Broad Investment Grade transferred a substantial</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>portion of its total assets to a 100% owned registered investment company</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>subsidiary called BCT Subsidiary, Inc. The financial statements and these</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>notes to the financial statements for Broad Investment Grade are consoli-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>dated and include the operations of both Broad Investment Grade and its</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>wholly owned subsidiary after elimination of all intercompany transactions</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and balances.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The following is a summary of significant accounting policies followed by</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Funds:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Valuation of Investments: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds value their bond investments on the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>basis of last available bid prices or current market quotations provided by</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>dealers or pricing services selected under the supervision of the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Board of Directors/Trustees (the &#147;Board&#148;). Floating rate loan interests are</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>valued at the mean between the last available bid prices from one or more</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>brokers or dealers as obtained from a pricing service. In determining the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of a particular investment, pricing services may use certain information</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>with respect to transactions in such investments, quotations from dealers,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pricing matrixes, market transactions in comparable investments, various</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>relationships observed in the market between investments, and calculated</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>yield measures based on valuation technology commonly employed in the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>market for such investments. Financial futures contracts traded on exchanges</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are valued at their last sale price. TBA commitments are valued at the cur-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rent market value of the underlying securities. Swap agreements are valued</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>utilizing quotes received daily by the Funds&#146; pricing service or through bro-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>kers, which are derived using daily swap curves and trades of underlying</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>securities. Short-term securities with maturities less than 60 days may be</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>valued at amortized cost, which approximates market value. The fair value</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of asset-backed and mortgage-backed securities are estimated based on</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>models that consider the estimated cash flows of each tranche of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>entity, establishes a benchmark yield and develops an estimated tranche</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>specific spread to the benchmark yield based on the unique attributes of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the tranche. Investments in open-end investment companies are valued at</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>net asset value each business day. The Funds value their investments in</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Liquidity Series, LLC Cash Sweep Series at fair value, which is</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ordinarily based upon their pro-rata ownership in the net assets of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>underlying fund.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Equity investments traded on a recognized securities exchange or the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>NASDAQ Global Market System are valued at the last reported sale price</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that day or the NASDAQ official closing price, if applicable. For equity</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investments traded on more than one exchange, the last reported sale</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>price on the exchange where the stock is primarily traded is used. Equity</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investments traded on a recognized exchange for which there were no sales</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on that day are valued at the last available bid price. If no bid price is</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>available, the prior day&#146;s price will be used, unless it is determined that</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>such prior day&#146;s price no longer reflects the fair value of the security.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Exchange-traded options are valued at the mean between the last bid and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ask prices at the close of the options market in which the options trade. An</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>exchange-traded option for which there is no mean price is valued at the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>last bid (long positions) or ask (short positions) price. If no bid or ask price</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>is available, the prior day&#146;s price will be used unless it is determined that</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the prior day&#146;s price no longer reflects the fair value of the option. Over-the-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>counter options are valued by an independent pricing service using a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>mathematical model which incorporates a number of market data factors,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>such as the trades and prices of the underlying securities.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>In the event that application of these methods of valuation results in a price</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for an investment which is deemed not to be representative of the market</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of such investment, the investment will be valued by a method</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>approved by the Board as reflecting fair value (&#147;Fair Value Assets&#148;). When</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>determining the price for Fair Value Assets, the investment advisor and/or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>sub-advisor seeks to determine the price that each Fund might reasonably</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>expect to receive from the current sale of that asset in an arm&#146;s-length</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>transaction. Fair value determinations shall be based upon all available</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>factors that the investment advisor and/or sub-advisor deems relevant. The</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pricing of all Fair Value Assets is subsequently reported to the Board or a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>committee thereof.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Generally, trading in foreign securities is substantially completed each</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>day at various times prior to the close of business on the New York Stock</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Exchange (&#147;NYSE&#148;). The values of such securities used in computing the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>net assets of each Fund are determined as of such times. Foreign currency</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>exchange rates will be determined as of the close of business on the NYSE.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Occasionally, events affecting the values of such securities and such</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>exchange rates may occur between the times at which they are determined</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and the close of business on the NYSE that may not be reflected in the</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>53</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (continued)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>computation of each Fund&#146;s net assets. If events (for example, a company</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>announcement, market volatility or a natural disaster) occur during such</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>periods that are expected to materially affect the value of such securities,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>those securities may be valued at their fair value as determined in good</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>faith by the Board or by the investment advisor using a pricing service</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and/or procedures approved by the Board. Foreign currency exchange con-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tracts are valued at the mean between the bid and ask prices. Interpolated</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>values are derived when the settlement date of the contract is an interim</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>date for which quotations are not available.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Derivative Financial Instruments: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Each Fund may engage in various port-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>folio investment strategies both to increase the returns of the Funds and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>to hedge, or protect, their exposure to interest rate movements and move-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments in the securities markets. Losses may arise if the value of the con-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tract decreases due to an unfavorable change in the price of the underlying</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>security, or if the counterparty does not perform under the contract.</FONT></P>
<P align=left><FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial futures contracts &#151; Each Fund may purchase or sell financial</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>futures contracts and options on such financial futures contracts. Futures</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>contracts are contracts for delayed delivery of securities at a specific</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>future date and at a specific price or yield. Pursuant to the contract,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Fund agrees to receive from or pay to the broker an amount of cash</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>equal to the daily fluctuation in value of the contract. Such receipts or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>payments are known as margin variation and are recorded by the Fund</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>as unrealized gains or losses. When the contract is closed, the Fund</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>records a realized gain or loss equal to the difference between the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value of the contract at the time it was opened and the value at the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>time it was closed. The use of futures transactions involves the risk of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>an imperfect correlation in the movements in the price of futures con-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tracts, interest rates and the underlying assets, and the possible inabil-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ity of counterparties to meet the terms of their contracts.</FONT><BR>
<BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Forward currency contracts &#151; A forward currency contract is an agree-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ment between two parties to buy and sell a currency at a set exchange</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rate on a future date. Each Fund may enter into forward currency con-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tracts as a hedge against either specific transactions or portfolio posi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tions. Forward currency contracts, when used by the Fund, help to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>manage the overall exposure to the foreign currency backing some of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the investments held by the Fund. The contract is marked-to-market</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>daily and the change in market value is recorded by the Fund as an</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>unrealized gain or loss. When the contract is closed, the Fund record a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>realized gain or loss equal to the difference between the value at the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>time it was opened and the value at the time it was closed. The use of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>forward currency contracts involves the risk that counterparties may not</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>meet the terms of the agreement and market risk of unanticipated</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>movements in the value of a foreign currency relative to the US dollar.</FONT><BR>
<BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options &#151; Each Fund may purchase and write call and put options. A</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>call option gives the purchaser of the option the right (but not the obli-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>gation) to buy, and obligates the seller to sell (when the option is exer-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cised), the underlying position at the exercise price at any time or at a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>specified time during the option period. A put option gives the holder the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>right to sell and obligates the writer to buy the underlying position at the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>exercise price at any time or at a specified time during the option period.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>When a Fund purchases (writes) an option, an amount equal to the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>premium paid (received) by the Fund is reflected as an asset and an</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>equivalent liability. The amount of the asset (liability) is subsequently</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>marked-to-market to reflect the current market value of the option writ-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ten. When a security is purchased or sold through an exercise of an</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>option, the related premium paid (or received) is added to (or deducted</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>from) the basis of the security acquired or deducted from (or added to)</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the proceeds of the security sold. When an option expires (or the Funds</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>enter into a closing transaction), the Funds realize a gain or loss on</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the option to the extent of the premiums received or paid (or gain</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or loss to the extent the cost of the closing transaction exceeds the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>premium received or paid). When the Fund writes a call option, such</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>option is &#147;covered,&#148; meaning that the Fund holds the underlying security</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>subject to being called by the option counterparty, or cash in an</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>amount sufficient to cover the obligation. When the Fund writes a put</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>option, such option is covered by cash in an amount sufficient to cover</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the obligation.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>In purchasing and writing options, the Funds bear the market risk of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>an unfavorable change in the price of the underlying security or index.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Exercise of a written option could result in the Funds purchasing a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>security at a price different from the current market value. The Funds</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>may execute transactions in both listed and over-the-counter options.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Transactions in certain over-the-counter options may expose the Funds</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>to the risk of default by the counterparty to the transaction.</FONT><BR>
<BR>
<FONT size=5 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>&#149;</FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Swaps &#151; Each Fund may enter into swap agreements, in which the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund and a counterparty agree to make periodic net payments on a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>specified notional amount. These periodic payments received or made</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>by the Funds are recorded in the accompanying Statements of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Operations as realized gains or losses, respectively. Swaps are marked-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>to-market daily and changes in value are recorded as unrealized appre-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ciation (depreciation). When the swap is terminated, the Funds will</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>record a realized gain or loss equal to the difference between the pro-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ceeds from (or cost of) the closing transaction and the Funds&#146; basis in</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the contract, if any. Swap transactions involve, to varying degrees, ele-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments of credit and market risk in excess of the amounts recognized on</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Statements of Assets and Liabilities. Such risks involve the possibil-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ity that there will be no liquid market for these agreements, that the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>counterparty to the agreements may default on its obligation to perform</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or disagree as to the meaning of the contractual terms in the agree-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments, and that there may be unfavorable changes in interest rates</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and/or market values associated with these transactions.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps &#151; Each Fund may enter into credit default swaps for</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment purposes or to manage its credit risk. The Funds enter into</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>credit default agreements to provide a measure of protection against the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>default of an issuer (as buyer protection) and/or gain credit exposure to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>an issuer to which it is not otherwise exposed (as seller of protection).</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Credit default swaps are agreements in which one party pays fixed peri-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>odic payments to a counterparty in consideration for a guarantee from</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the counterparty to make a specific payment should a negative credit</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>event take place (e.g. bankruptcy, failure to pay, obligation accelerators,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>repudiation, moratorium or restructuring). The Funds may either buy or sell</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>54 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (continued)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(write) credit default swaps. As a buyer, a Fund will either receive from the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>seller an amount equal to the notional amount of the swap and deliver</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the referenced security or underlying securities comprising of an index</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or receive a net settlement of cash equal to the notional amount of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>swap less the recovery value of the security or underlying securities com-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>prising of an index. As a seller (writer), a Fund will either pay the buyer an</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>amount equal to the notional amount of the swap and take delivery of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the referenced security or underlying securities comprising of an index or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pay a net settlement of cash equal to the notional amount of the sweep</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>less the recovery value of the security or underlying securities comprising</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of an index. In the event of default by the counterparty, a Fund may</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>recover amounts paid under the agreement either partially or in total by</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>offsetting any payables and/or receivables with collateral held or pledged.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Interest rate swaps &#151; Each Fund may enter into interest rate swaps for</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment purposes or to manage its interest rate risk. Interest rate</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>swaps are agreements in which one party pays a floating rate of interest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on a notional principal amount and receives a fixed rate of interest on</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the same notional principal amount for a specified period of time.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Alternatively, a party may pay a fixed rate and receive a floating rate. In</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>more complex swaps, the notional principal amount may decline (or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>amortize) over time.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Total return swaps &#151; Each Fund may enter into interest rate swaps for</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment purposes or to manage its interest rate risk. Total return</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>swaps are agreements in which one party commits to pay interest in</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>exchange for a market-linked return. To the extent the total return of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>security or index underlying the transaction exceeds or falls short of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>offsetting interest rate obligation, the Fund will receive a payment from</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or make a payment to the counterparty.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Foreign Currency Transactions: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Foreign currency amounts are translated</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>into United States dollars on the following basis: (i) market value of invest-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ment securities, assets and liabilities at the current rate of exchange; and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(ii) purchases and sales of investment securities, income and expenses at</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the rates of exchange prevailing on the respective dates of such transactions.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds report foreign currency related transactions as components of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>realized gains for financial reporting purposes, whereas such components</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are treated as ordinary income for federal income tax purposes.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Asset-Backed and Mortgage-Backed Securities: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Certain Funds may invest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>in asset-backed securities. Asset-backed securities are generally issued as</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pass-through certificates, which represent undivided fractional ownership</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interests in an underlying pool of assets, or as debt instruments, which are</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>also known as collateralized obligations, and are generally issued as the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>debt of a special purpose entity organized solely for the purpose of owning</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>such assets and issuing such debt. Asset-backed securities are often backed</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>by a pool of assets representing the obligations of a number of different</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>parties. The yield characteristics of certain asset-backed securities may dif-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>fer from traditional debt securities. One such major difference is that all or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>a principal part of the obligations may be prepaid at any time because the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>underlying assets (i.e., loans) may be prepaid at any time. As a result, a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>decrease in interest rates in the market may result in increases in the level</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of prepayments as borrowers, particularly mortgagors, refinance and repay</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>their loans. An increased prepayment rate with respect to an asset-backed</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>security subject to such a prepayment feature will have the effect of short-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ening the maturity of the security. If a Fund has purchased such an asset-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>backed security at a premium, a faster than anticipated prepayment rate</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>could result in a loss of principal to the extent of the premium paid.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Certain Funds may purchase in the secondary market certain mortgage</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pass through securities. There are a number of important differences</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>among the agencies and instrumentalities of the U.S. Government that</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>issue mortgage-related securities and among the securities that they issue.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For example, mortgage-related securities guaranteed by the Government</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>National Mortgage Association (&#147;GNMA&#148;) are guaranteed as to the timely</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>payment of principal and interest by GNMA and such guarantee is backed</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>by the full faith and credit of the United States. However, mortgage-related</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>securities issued by the Federal National Mortgage Association (&#147;FNMA&#148;)</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>include FNMA guaranteed Mortgage Pass-Through Certificates, which are</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>solely the obligations of the FNMA, are not backed by or entitled to the full</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>faith and credit of the United States and are supported by the right of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>issuer to borrow from the Treasury.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Certain Funds invest a significant portion of its assets in securities backed</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>by commercial or residential mortgage loans or in issuers that hold mortgage</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and other asset-backed securities. Please see the Schedules of Investments</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for these securities. Changes in economic conditions, including delinquen-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cies and/or defaults on assets underlying these securities, can affect the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value, income and/or liquidity of such positions.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Collateralized Mortgage Obligations: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Certain Funds may invest in multiple</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>class pass-through securities, including collateralized mortgage obligations</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(&#147;CMOs&#148;). These multiple class securities may be issued by GNMA, US</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>government agencies or instrumentalities or by trusts formed by private</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>originators of, or investors in, mortgage loans. In general, CMOs are debt</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>obligations of a legal entity that are collateralized by, and multiple class</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pass-through securities represent direct ownership interests in, a pool of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>residential or commercial mortgage loans or mortgage pass-through securi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ties (the &#147;Mortgage Assets&#148;), the payments on which are used to make pay-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments on the CMOs or multiple pass-through securities. Classes of CMOs</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>include interest only (&#147;IOs&#148;), principal only (&#147;POs&#148;), planned amortization</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>classes (&#147;PACs&#148;) and targeted amortization classes (&#147;TACs&#148;). IOs and POs</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are stripped mortgage-backed securities representing interests in a pool</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of mortgages, the cash flow from which has been separated into interest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and principal components. IOs receive the interest portion of the cash flow</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>while POs receive the principal portion. IOs and POs can be extremely</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>volatile in response to changes in interest rates. As interest rates rise and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>fall, the value of IOs tends to move in the same direction as interest rates.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>POs perform best when prepayments on the underlying mortgages rise</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>since this increases the rate at which the investment is returned and the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>yield to maturity on the PO. When payments on mortgages underlying a PO</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are slower than anticipated, the life of the PO is lengthened and the yield</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>to maturity is reduced. If the underlying mortgage assets experience greater</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>than anticipated pre-payments of principal, the Funds may not fully recoup</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>its initial investment in IOs.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>55</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (continued)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Stripped Mortgage-Backed Securities: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds may invest in stripped</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>mortgage-backed securities issued by the U.S. government, its agencies</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and instrumentalities. Stripped mortgage-backed securities are usually</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>structured with two classes that receive different proportions of the interest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and principal distributions on a pool of mortgage assets. The Funds also</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>may invest in stripped mortgage-backed securities that are privately issued.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Capital Trusts and Trust Preferreds: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>These securities are typically issued by</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>corporations, generally in the form of interest-bearing notes with preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>securities characteristics, or by an affiliated business trust of a corporation,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>generally in the form of beneficial interests in subordinated debentures or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>similarly structured securities. The securities can be structured as either</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>fixed or adjustable coupon securities that can have either a perpetual or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>stated maturity date. Dividends can be deferred without creating an event</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of default or acceleration, although maturity cannot take place unless all</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cumulative payment obligations have been met. The deferral of payments</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>does not affect the purchase or sale of these securities in the open market.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Payments on these securities are treated as interest rather than dividends</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for federal income tax purposes. These securities can have a rating that is</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>slightly below that of the issuing company&#146;s senior debt securities.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Preferred Stock: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Certain Funds may invest in preferred stocks. Preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>stock has a preference over common stocks in liquidation (and generally</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>in receiving dividends as well) but is subordinated to the liabilities of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>issuer in all respects. As a general rule, the market value of preferred stock</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>with a fixed dividend rate and no conversion element varies inversely with</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interest rates and perceived credit risk, while the market price of convert-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ible preferred stock generally also reflects some element of conversion</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>value. Because preferred stock is junior to debt securities and other obli-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>gations of the issuer, deterioration in the credit quality of the issuer will</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cause greater changes in the value of a preferred stock than in a more</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>senior debt security with similar stated yield characteristics. Unlike interest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>payments on debt securities, preferred stock dividends are payable only if</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>declared by the issuer&#146;s board of directors. Preferred stock also may be</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>subject to optional or mandatory redemption provisions.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Floating Rate Loans: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Certain Funds may invest in floating rate loans, which</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are generally non-investment grade, made by banks, other financial institu-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tions and privately and publicly offered corporations. Floating rate loans</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are senior in the debt structure of a corporation. Floating rate loans gener-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ally pay interest at rates that are periodically determined by reference to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>a base lending rate plus a premium. The base lending rates are generally</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(i) the lending rate offered by one or more European banks, such as LIBOR</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(London InterBank Offered Rate), (ii) the prime rate offered by one or more</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>U.S. banks or (iii) the certificate of deposit rate. The Funds consider these</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investments to be investments in debt securities for purposes of their</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment policies.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A Fund earns and/or pays facility and other fees on floating rate loans.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Other fees earned/paid include commitment, amendment, consent, com-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>missions and prepayment penalty fees. Facility, amendment and consent</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>fees are typically amortized as premium and/or accreted as discount over</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the term of the loan. Commitment, commission and various other fees are</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>recorded as income. Prepayment penalty fees are recorded on the accrual</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>basis. When a Fund buys a floating rate loan it may receive a facility fee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and when it sells a floating rate loan it may pay a facility fee. On an ongo-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ing basis, a Fund may receive a commitment fee based on the undrawn</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>portion of the underlying line of credit portion of a floating rate loan. In cer-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tain circumstances, a Fund may receive a prepayment penalty fee upon the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>prepayment of a floating rate loan by a borrower. Other fees received by a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund may include covenant waiver fees and covenant modification fees.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A Fund may invest in multiple series or tranches of a loan. A different series</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or tranche may have varying terms and carry different associated risks.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating rate loans are usually freely callable at the issuer&#146;s option.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds may invest in such loans in the form of participations in loans</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(&#147;Participations&#148;) and assignments of all or a portion of loans from third</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>parties. Participations typically will result in the Funds having a contractual</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>relationship only with the lender, not with the borrower. The Funds will have</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the right to receive payments of principal, interest and any fees to which it</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>is entitled only from the lender selling the Participation and only upon</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>receipt by the lender of the payments from the borrower.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>In connection with purchasing Participations, the Funds generally will have</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>no right to enforce compliance by the borrower with the terms of the loan</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>agreement relating to the loans, nor any rights of offset against the bor-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rower, and a Fund may not benefit directly from any collateral supporting</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the loan in which it has purchased the Participation.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>As a result, a Fund will assume the credit risk of both the borrower and the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>lender that is selling the Participation. The Fund&#146;s investments in loan par-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ticipation interests involve the risk of insolvency of the financial intermedi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>aries who are parties to the transactions. In the event of the insolvency of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the lender selling the Participation, a Fund may be treated as general credi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tors of the lender and may not benefit from any offset between the lender</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and the borrower.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Reverse Repurchase Agreements: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds may enter into reverse repur-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>chase agreements with qualified third party broker-dealers. In a reverse</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>repurchase agreement, each Fund sells securities to a bank or broker-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>dealer and agrees to repurchase the securities at a mutually agreed upon</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>date and price. Interest on the value of the reverse repurchase agreements</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>issued and outstanding is based upon market rates determined at the time</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of issuance. The Funds may utilize reverse repurchase agreements when it</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>is anticipated that the interest income to be earned from the investment of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the proceeds of the transaction is greater than the interest expense of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>transaction. Reverse repurchase agreements involve leverage risk and also</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the risk that the market value of the securities that each Fund is obligated</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>to repurchase under the agreement may decline below the repurchase</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>price. In the event the buyer of securities under a reverse repurchase agree-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ment files for bankruptcy or becomes insolvent, each Fund&#146;s use of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>proceeds of the agreement may be restricted pending determination by</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the other party, or its trustee or receiver, whether to enforce each Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>obligation to repurchase the securities.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>56 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (continued)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Defensive Positions: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Each of Preferred and Corporate, Preferred Income,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity and Preferred Opportunity may vary its investment</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>policies for temporary defensive purposes during periods in which the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment advisor believes that conditions in the securities markets or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>other economic, financial or political conditions warrant. Under such condi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tions, the Funds for temporary defensive purposes may invest up to 100%</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of its total assets in, as applicable and described in each Fund&#146;s prospec-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tus, U.S. government securities, certificates of deposit, repurchase agree-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments that involve purchases of debt securities, bankers&#146; acceptances and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>other bank obligations, commercial paper, money market funds and/or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>other debt securities deemed by the investment advisor to be consistent</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>with a defensive posture, or may hold its assets in cash.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Zero-Coupon Bonds: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds may invest in zero-coupon bonds, which</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are normally issued at a significant discount from face value and do not</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>provide for periodic interest payments. Zero-coupon bonds may experience</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>greater volatility in market value than similar maturity debt obligations</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>which provide for regular interest payments.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Segregation and Collateralization: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>In cases in which the 1940 Act and the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interpretive positions of the Securities and Exchange Commission (&#147;SEC&#148;)</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>require that each Fund segregates assets in connection with certain invest-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments (e.g., dollar rolls, TBA&#146;s beyond normal settlement, options, swaps,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>written swaptions, written options, forward foreign currency contracts, short</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>sales or financial futures contracts) or certain borrowings (e.g., reverse</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>repurchase agreements), each Fund will, consistent with certain interpretive</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>letters issued by the SEC, designate on its books and records cash or other</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>liquid securities having a market value at least equal to the amount that</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>would otherwise be required to be physically segregated. Furthermore,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>based on requirements and agreements with certain exchanges and third</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>party broker-dealers, the Funds may also be required to deliver or deposit</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>securities as collateral for certain investments (e.g., financial futures con-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tracts, reverse repurchase agreements, swaps and written options).</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Investment Transactions and Investment Income: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment transactions</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are recorded on the dates the transactions are entered into (the trade</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>dates). Realized gains and losses on security transactions are determined</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on the identified cost basis. Dividend income is recorded on the ex-dividend</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>dates. Dividends from foreign securities where the ex-dividend date may</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>have passed are subsequently recorded when the Funds have determined</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the ex-dividend date. Interest income is recognized on the accrual basis.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds amortize all premiums and discounts on debt securities.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Consent fees are compensation for agreeing to changes in the terms of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>debt instruments and are included in interest income on the Statements</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of Operations.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Dividends and Distributions: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends from net investment income are</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>declared and paid monthly (quarterly for Capital and Income). Effective</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>November 2008, Broad Investment Grade discontinued its monthly distri-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>bution in an effort to meet its termination target of $15. Distributions of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>capital gains are recorded on the ex-dividend dates. If the total dividends</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and distributions made in any tax year exceeds net investment income and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>accumulated realized capital gains, a portion of the total distribution may</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>be treated as a tax return of capital.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Income Taxes: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>It is each Fund&#146;s policy to comply with the requirements of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Internal Revenue Code applicable to regulated investment companies</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and to distribute substantially all of its taxable income to its shareholders.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Therefore, no federal income tax provision is required. Under the applicable</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>foreign tax laws, a withholding tax may be imposed on interest, dividends</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and capital gains at various rates. As part of a tax planning strategy, Broad</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment Grade has retained a portion of its taxable income and will pay</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>excise tax on the undistributed amounts.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Each Fund files US federal and various state and local tax returns. No</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>income tax returns are currently under examination. The statute of limita-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tions on Broad Investment Grade&#146;s, Preferred and Corporate&#146;s, Preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Equity&#146;s and Preferred Income&#146;s US federal tax returns remains open</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for the four years ended October 31, 2008. The statute of limitations on</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income&#146;s, Floating Rate&#146;s and Preferred Opportunity&#146;s US fed-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>eral tax returns remains open for the three years ended December 31,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2007 and the period ended October 31, 2008. The statute of limitations</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>on each Fund&#146;s state and local tax returns may remain open for an addi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tional year depending upon the jurisdiction.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Recent Accounting Pronouncement: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>In March 2008, Statement of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Financial Accounting Standards No. 161, &#147;Disclosures about Derivative</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Instruments and Hedging Activities &#151; an amendment of FASB Statement</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>No. 133&#148; (&#147;FAS 161&#148;), was issued. FAS 161 is intended to improve finan-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cial reporting for derivative instruments by requiring enhanced disclosure</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that enables investors to understand how and why an entity uses deriva-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tives, how derivatives are accounted for and how derivative instruments</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>affect an entity&#146;s results of operations and financial position. FAS 161 is</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>effective for financial statements issued for fiscal years and interim periods</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>beginning after November 15, 2008.The impact on the Funds&#146; financial</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>statement disclosures, if any, is currently being assessed.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Deferred Compensation and BlackRock Closed-End Share Equivalent</FONT><BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Investment Plan: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Under the deferred compensation plan approved by each</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s Board, non-interested Directors or Trustees (&#147;Independent Directors</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or Trustees&#148;) defer a portion of their annual complex-wide compensation.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deferred amounts earn an approximate return as though equivalent dollar</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>amounts have been invested in common shares of other certain BlackRock</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Closed-End Funds selected by the Independent Directors or Trustees. This</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>has approximately the same economic effect for the Independent Directors</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or Trustees as if the Independent Directors or Trustees had invested the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>deferred amounts directly in other certain BlackRock Closed-End Funds.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The deferred compensation plan is not funded and obligations thereunder</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>represent general unsecured claims against the general assets of each</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund. Each Fund may, however, elect to invest in common shares of other</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>certain BlackRock Closed-End Funds selected by the Independent Directors</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or Trustees in order to match its deferred compensation obligations.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investments to cover each Fund&#146;s deferred compensation liability are</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>included in other assets on the Statements of Assets and Liabilities.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends and distributions from the BlackRock Closed-End Fund invest-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ments under the plan are included in income &#151; affiliated on the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Statements of Operations.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>57</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (continued)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Other: </FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Expenses directly related to each Fund are charged to that Fund. Other</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>operating expenses shared by several Funds are pro-rated among those</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>funds on the basis of relative net assets or other appropriate methods.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Custodian fees may be reduced by amounts calculated on uninvested</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cash balances, which are shown on the Statements of Operations as fees</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>paid indirectly.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>2. Investment Advisory Agreement and Other Transactions</FONT><BR>
<FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>with Affiliates:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Each Fund entered into an Investment Advisory Agreement with BlackRock</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Advisors, LLC (the &#147;Advisor&#148;), an indirect, wholly owned subsidiary of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock, Inc. (&#147;BlackRock&#148;), to provide investment advisory and adminis-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tration services. The PNC Financial Services Group, Inc. (&#147;PNC&#148;) and Bank</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of America Corporation (&#147;BAC&#148;) are the largest stockholders of BlackRock.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BAC became a stockholder of BlackRock following its acquisition of Merrill</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lynch &amp; Co., Inc. (&#147;Merrill Lynch&#148;) on January 1, 2009. Prior to that date,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>both PNC and Merrill Lynch were considered affiliates of the Funds under</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the 1940 Act. Subsequent to the acquisition, PNC remains an affiliate, but</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>due to the restructuring of Merrill Lynch&#146;s ownership interest of BlackRock,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BAC is not deemed to be an affiliate under the 1940 Act.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Advisor is responsible for the management of each Fund&#146;s portfolio and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>provides the necessary personnel, facilities, equipment and certain other</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>services necessary to the operations of the Funds. For such services, each</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund pays the Advisor a monthly fee at the following annual rates of each</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund&#146;s average daily (weekly for Broad Investment Grade, Floating Rate,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity and Preferred Opportunity) net assets (including any</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>assets attributable to borrowings or the proceeds from the issuance of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares) minus the sum of accrued liabilities (other than debt rep-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>resenting financial leverage) as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="42%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Advisory</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fund</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Fee Rates</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broad Investment Grade</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.55%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.85%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.75%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.60%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.65%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.60%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.65%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Advisor has voluntarily agreed to waive a portion of the investment advi-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>sory fees or other expenses on Floating Rate as a percentage of its average</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>weekly net assets as follows: 0.20% for the first five years of the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>operations (through August 30, 2010), 0.10% in year seven (through</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>August 30, 2011) and 0.05% in year eight (through August 30, 2012).</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broad Investment Grade has an Administration Agreement with the Advisor.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The administration fee paid to the Advisor is computed weekly and payable</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>monthly at an annual rate of 0.15% of the Fund&#146;s average daily net assets.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Advisor has voluntarily agreed to waive the investment advisory and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>administration fees on Broad Investment Grade for the period November 1,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2007 to the Fund&#146;s termination in 2009.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Advisor has agreed to waive its advisory fees by the amount of invest-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ment advisory fees each Fund pays to the Advisor indirectly through its</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment in affiliated money market funds. These amounts are shown as</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>fees waived by advisor on the Statements of Operations.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds reimbursed the Advisor the following amounts for certain</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>accounting services, which are included in accounting services in the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Statements of Operations. For the six months ended April 30, 2009 the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>amounts were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="56%"></TD>
     <TD width="43%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,554</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,259</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,366</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7,127</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,906</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,305</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Financial Management, Inc. (&#147;BFM&#148;), a wholly owned subsidiary</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of BlackRock, Inc., serves as sub-advisor for Broad Investment Grade,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate, Preferred and Equity and Preferred Opportunity. BFM and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Investment Management LLC (&#147;BIM&#148;), both affiliates of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Advisor, serve as sub-advisors for Capital and Income. BIM serves as sub-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>advisor for Preferred and Corporate and Preferred Income. The Advisor pays</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the subadvisors for services they provide, a monthly fee that is a percent-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>age of the investment advisory fees paid by each Fund to the Advisor.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the period November 1, 2008 to December 31, 2008 (after which it</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>was no longer considered an affiliate), Merrill Lynch, Pierce, Fenner &amp;</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Smith Incorporated (&#147;MLPF&amp;S&#148;), a wholly owned subsidiary of Merrill</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lynch, earned commissions on transactions of securities as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="54%"></TD>
     <TD width="45%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 31,748</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,223</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Certain officers and/or directors or trustees of the Funds are officers and/or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>directors of BlackRock or its affiliates. The Funds reimburse the Advisor for</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>compensation paid to the Funds&#146; Chief Compliance Officer.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>3. Investments:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Purchases and sales (including paydowns) of investments, excluding short-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>term securities and US government securities, for the six months ended</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="40%"></TD>
     <TD width="36%"></TD>
     <TD width="23%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Purchases</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Sales</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broad Investment Grade</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 976,325</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,474,012</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 744,809,589</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 170,899,104</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 36,298,860</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 100,264,618</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 18,804,259</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 58,215,838</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 178,529,294</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 253,434,355</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 68,895,190</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 208,691,894</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 32,602,854</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 111,502,899</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, purchases and sales of US gov-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ernment securities were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="38%"></TD>
     <TD width="38%"></TD>
     <TD width="23%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Purchases</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Sales</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 494,173</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 482,813</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>58 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<A name="page_60"></A>
<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (continued)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Transactions in options written for the six months ended April 30, 2009 for</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income and Preferred and Equity were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="56%"></TD>
     <TD width="20%"></TD>
     <TD width="23%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Capital and Income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Premiums</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Received</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Outstanding call options written,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>beginning of period</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,225</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,449,258</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>248,950</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>88,029,757</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options expired</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(36,941)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(11,000,964)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options closed</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(48,353)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(67,709,114)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options exercised</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(33,722)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(2,692,233)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Outstanding call options written, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>131,159</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 10,076,704</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Premiums</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Received</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Outstanding put options written,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>beginning of period</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>600</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 51,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options closed</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(600)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(51,500)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Outstanding put options written, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Premiums</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Contracts</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Received</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Outstanding call options written,</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>beginning of period</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,150</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,556,037</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options written</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>11,234</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>25,175,420</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options expired</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(1,905)</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(4,347,543)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Options closed</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(9,070)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(21,858,548)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Outstanding call options written, end of period</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,409</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,525,366</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>4. Reverse Repurchase Agreements:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For the six months ended April 30, 2009, the daily weighted average inter-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>est rate on the reverse repurchase agreements were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="59%"></TD>
     <TD width="40%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Broad Investment Grade</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.73%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.54%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.53%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.00%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.49%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.98%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>5. Commitments:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate may invest in floating rate loans. In connection with these</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investments, the Fund may, with its Advisor, also enter into unfunded corpo-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rate loans (&#147;commitments&#148;). Commitments may obligate the Fund to fur-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>nish temporary financing to a borrower until permanent financing can be</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>arranged. In connection with these commitments, the Fund earns a commit-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ment fee, typically set as a percentage of the commitment amount. Such</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>fee income, which is classified in the Statements of Operations as facility</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and other fees, is recognized ratably over the commitment period. As of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>April 30, 2009, the Fund had the following unfunded loan commitments:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="51%"></TD>
     <TD width="28%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Value of</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Underlying</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Underlying</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commitment</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Loan</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Borrower</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(000)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Bausche &amp; Lomb, Inc</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 21</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Golden Nugget, Inc</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 45</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 20</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Smurfit-Stone Container Revolving Credit</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$861</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$833</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>6. Capital Share Transactions:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Common Shares</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>There are 200 million of $0.01 par value shares authorized for Broad</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Investment Grade. There are 200 million of $0.10 par value shares author-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ized for Capital and Income, Preferred and Corporate and Preferred Income.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>There are an unlimited number of $0.001 par value shares authorized for</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate, Preferred and Equity and Preferred Opportunity.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares issued and outstanding during the six months ended April 30,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2009 and the year ended October 31, 2008 for Preferred and Corporate</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Preferred Income and the period January 1, 2008 to October 31,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2008 and the year ended December 31, 2007 for Preferred Opportunity</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>increased by the following amounts as a result of dividend reinvestment:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="39%"></TD>
     <TD width="25%"></TD>
     <TD width="17%"></TD>
     <TD width="17%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>April 30,</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>October 31,</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>December 31,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>2007</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3,965</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>119,907</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>64,138</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,794</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,981</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares issued and outstanding remained constant for Broad Investment</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Grade, Floating Rate, Preferred and Corporate, and Preferred and Equity</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>for the six months ended April 30, 2009, and the year ended October 31,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2008 (period January 1, 2008 to October 31, 2009 for Floating Rate).</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares issued and outstanding for Capital and Income increased by</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>30,542,706 as a result of a reorganization and remained constant during</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the period January 1, 2008 to October 31, 2008 and the year ended</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>December 31, 2007.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Preferred Shares</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Preferred Shares are redeemable at the option of each Fund, in whole</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>or in part, on any dividend payment date at $25,000 per share plus any</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>accumulated or unpaid dividends whether or not declared. The Preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares are also subject to mandatory redemption at their liquidation pref-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>erence plus any accumulated or unpaid dividends, whether or not declared,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>if certain requirements relating to the composition of the assets and liabili-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ties of the Fund, as set forth in the Fund&#146;s Statement of Preferences/Articles</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Supplementary (&#147;Governing Instrument&#148;), as applicable, are not satisfied.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>From time to time in the future, the Funds that have issued Preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares may effect repurchases of such shares at prices below their liquida-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tion preferences as agreed upon by the Funds and seller. The Funds also</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>may redeem such shares from time to time as provided in the applicable</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Governing Instrument. The Funds intend to effect such redemptions and/or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>repurchases to the extent necessary to maintain applicable asset coverage</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>requirements or for such other reasons as the Board may determine.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The holders of Preferred Shares have voting rights equal to the holders of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Common Shares (one vote per share) and will vote together with holders</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of Common Shares (one vote per share) as a single class. However, holders</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of Preferred Shares, voting as a separate class, are also entitled to elect</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>two Directors/Trustees for each Fund. In addition, the 1940 Act requires</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>that along with approval by shareholders that might otherwise be required,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the approval of the holders of a majority of any outstanding Preferred Shares,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>voting separately as a class would be required to (a) adopt any plan of</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>59</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (continued)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>reorganization that would adversely affect the Preferred Shares, (b) change</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>a Fund&#146;s subclassification as a closed-end investment company or change</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>its fundamental investment restrictions or (c) change its business so as to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cease to be an investment company.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate, Preferred and Corporate, Preferred and Equity, Preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Income and Preferred Opportunity had the following series of Preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares outstanding and effective yields as of April 30, 2009:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="16%"></TD>
     <TD width="19%"></TD>
     <TD width="17%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Reset</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Series</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Yield</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Frequency</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>784</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.581%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>784</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.581%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>784</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.572%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>805</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.571%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>805</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.581%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,310</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.581%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,310</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.581%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,310</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.572%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,310</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.571%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>861</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.571%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>861</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.581%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>861</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.581%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>861</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.572%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>861</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.571%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W28</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,381</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.710%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,228</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.688%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>939</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.450%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>939</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.465%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>939</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.465%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>7</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Dividends on seven-day Preferred Shares are cumulative at a rate that is</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>reset every seven days based on the results of an auction. Dividends on</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>28-day Preferred Shares are cumulative at a rate which is reset every 28</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>days based on the results of an auction. If the Preferred Shares fail to clear</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the auction on an auction date, the Funds are required to pay the maximum</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>applicable rate on the Preferred Shares to holders of such shares for suc-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>cessive dividend periods until such time as the shares are successfully</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>auctioned. The maximum applicable rate on Preferred Shares are as</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>follows: for Floating Rate, the higher of 125% of the 7-day Telerate/BBA</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LIBOR rate or 125% over the 7-day Telerate/BBA LIBOR rate; for Preferred</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Corporate and Preferred Income, 125% times or 1.25% plus the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Telerate/BBA LIBOR rate; for Preferred Equity, 150% times or 1.25% plus</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Telerate/BBA LIBOR rate; and for Preferred Opportunity 150% of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interest equivalent of the 30-day commercial paper rate. The dividend</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ranges for the six months ended April 30, 2009, were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="17%"></TD>
     <TD width="19%"></TD>
     <TD width="18%"></TD>
     <TD width="14%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Series</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Average</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.486%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.341%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.777%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.483%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.266%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.774%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.491%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.888%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.764%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.493%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.389%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.765%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.486%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.341%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.777%</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="29%"></TD>
     <TD width="18%"></TD>
     <TD width="19%"></TD>
     <TD width="18%"></TD>
     <TD width="14%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Series</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Low</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>High</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Average</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.486%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.341%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.777%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.483%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.266%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.774%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.491%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.888%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.764%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.493%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.569%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.757%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.493%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.389%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.828%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.486%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.341%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.839%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.483%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3.266%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.742%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.491%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.888%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.788%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.493%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.461%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.771%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W28</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.579%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.525%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.767%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.663%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.763%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2.199%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.375%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.210%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.998%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.405%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.074%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.999%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0.375%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4.089%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1.003%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Since February 13, 2008, the Preferred Shares of the Funds failed to clear</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>any of their auctions. As a result, the Preferred Shares dividend rates were</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>reset to the maximum applicable rate, which ranged from 0.375% to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5.763%. A failed auction is not an event of default for the Funds but it</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>has a negative impact on the liquidity of Preferred Shares. A failed auction</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>occurs when there are more sellers of a Fund&#146;s Preferred Shares than buy-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ers. It is impossible to predict how long this imbalance will last. A success-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ful auction for the Fund&#146;s Preferred Shares may not occur for some time, if</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ever, and even if liquidity does resume, holders of the Preferred Shares may</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>not have the ability to sell the Preferred Shares at its liquidation preference.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>A Fund may not declare dividends or make other distributions on Common</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares or purchase any such shares if, at the time of the declaration, distri-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>bution or purchase, asset coverage with respect to the outstanding</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Shares is less than 200%.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Prior to December 22, 2008, the Funds paid commissions to certain</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>broker-dealers at the end of each auction at an annual rate of 0.25%,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>calculated on the aggregate principal amount. In December 22, 2008,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>commissions paid to broker-dealers on preferred shares that experience a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>failed auction were reduced to 0.15% on the aggregate principal amount.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Fund will continue to pay commissions of 0.25% on the aggregate</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>principal amount of all shares that successfully clear their auctions. For the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>period November 1, 2008 to December 31, 2008 (after which it was no</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>longer considered an affiliate), MLPF&amp;S, earned commissions as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="55%"></TD>
     <TD width="44%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Commissions</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 683</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$14,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$41,221</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$42,997</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$13,434</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds announced the following redemptions, as of the date indicated,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of Preferred Shares at a price of $25,000 per share plus any accrued and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>unpaid dividends through the redemption dates:</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>60 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<HR align=center SIZE=2 width="100%" noShade>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (continued)</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="29%"></TD>
     <TD width="12%"></TD>
     <TD width="20%"></TD>
     <TD width="18%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>May 19, 2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Redemption</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Aggregate</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Series</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Redeemed</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Principal</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/11/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,462</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$61,550,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/12/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,462</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$61,550,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/13/2008</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,462</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$61,550,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/10/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,365</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$34,125,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/11/2008</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,365</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$34,125,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/11/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,310</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$57,750,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/12/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,310</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$57,750,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/13/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,310</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$57,750,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/09/2008</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,310</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$57,750,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/10/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$35,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/11/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$35,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/05/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$35,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/06/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$35,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/09/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$35,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W28</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/05/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$50,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/20/2008</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2,000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$50,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/11/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,472</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$36,800,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/12/2008</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,472</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$36,800,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6/13/2008</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1,472</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$36,800,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>November 25, 2008</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Redemption</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Aggregate</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Series</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Redeemed</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Principal</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/16/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>400</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/17/08</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>400</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$10,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/16/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>229</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,725,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/17/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>229</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,725,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/18/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>229</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,725,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/12/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>229</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,725,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/15/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>229</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,725,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W28</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/18/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>327</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8,175,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1/02/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>327</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8,175,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/17/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>266</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6,650,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/18/08</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>266</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6,650,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12/19/08</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>266</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 6,650,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>February 24, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Redemption</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Aggregate</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Series</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Redeemed</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Principal</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/16/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/17/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>160</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 4,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/17/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>203</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,075,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/18/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>203</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,075,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/19/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>203</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,075,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/13/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>203</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,075,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/16/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>203</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 5,075,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W28</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/09/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>292</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7,300,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3/27/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>292</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 7,300,000</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="28%"></TD>
     <TD width="14%"></TD>
     <TD width="20%"></TD>
     <TD width="19%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>March 26, 2009</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Redemption</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Aggregate</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Series</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Date</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Redeemed</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Principal</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/14/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>107</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$2,675,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/15/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>107</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$2,675,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/16/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>107</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$2,675,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/13/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>107</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$2,675,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/13/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>107</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$2,675,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W28</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5/07/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>153</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$3,825,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/24/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>153</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$3,825,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/15/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>267</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$6,675,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/16/09</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>267</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$6,675,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>4/17/09</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>267</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$6,675,000</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>All of the Funds, except Floating Rate, financed the Preferred Share</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>redemptions with cash received from reverse repurchase agreements.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate financed the Preferred Share redemptions with cash</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>received from a loan.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Shares issued and outstanding for the year ended October 31, 2007</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>(December 31, 2007 for Floating Rate and Preferred Opportunity)</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>remained constant.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>7. Short Term Borrowings:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>On March 5, 2009, Floating Rate terminated its revolving credit agreement</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>with Citicorp and entered into a senior committed secured, 364-day revolv-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ing line of credit and a separate security agreement with State Street Bank</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Trust Company (&#147;SSB&#148;). The SSB line of credit provides the Fund with a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>maximum commitment of $134 million. The Fund has granted a security</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>interest in substantially all of its assets to SSB.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Advances are made by SSB to Floating Rate at Floating Rate&#146;s option at</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>either (a) the higher of 1.00% above the Fed Effective Rate or 1.00%</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>above the Overnight LIBOR Rate and (b) 1.00% above 7-day, 30-day, or</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>60-day LIBOR Rate. In addition, Floating Rate pays a facility fee and a</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>commitment fee based upon SSBs total commitment to Floating Rate. For</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the six months ended April 30, 2009, the daily weighted average interest</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>rate was 2.46%.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Under the Investment Company Act of 1940, Floating Rate may not declare</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>dividends or make other distributions on Common Shares if, at the time of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the declaration, distribution or purchase, asset coverage with respect to the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>outstanding indebtedness is less than 300%.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>8. Capital Loss Carryforwards:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>As of October 31, 2008, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="28%"></TD>
     <TD width="22%"></TD>
     <TD width="9%"></TD>
     <TD width="10%"></TD>
     <TD width="10%"></TD>
     <TD width="9%"></TD>
     <TD width="8%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Expires October 31,</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Broad</FONT></B>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>(November 30, for</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Floating</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred and</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Broad Investment Grade)</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Grade</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Rate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Corporate</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>and Equity</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Opportunity</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2011</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,120,207</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 1,276,621</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2012</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>684,360</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>10,243,141</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 62,733,648</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2013</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>5,058,900</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>17,911,331</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2014</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>471,992</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>8,481,628</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12,145,117</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2015</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 3,268,804</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>6,724,694</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 49,741,712</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>19,582,978</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 18,184,893</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2016</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>24,616,531</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>40,232,230</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>113,355,213</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>140,413,243</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>58,197,929</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 2,276,559</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 27,885,335</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 72,017,214</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$163,096,925</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$252,786,317</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 76,382,822</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>61</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Notes to Financial Statements (concluded)</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>9. Reorganization:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>On November 3, 2008 (the &#147;Reorganization Date&#148;), BlackRock Enhanced</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income Fund, Inc. (&#147;Capital and Income&#148;) acquired all of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>assets and certain stated liabilities of BlackRock Enhanced Equity Yield</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund, Inc. (&#147;Equity Yield&#148;) and BlackRock Enhanced Equity Yield and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Premium Fund, Inc. (&#147;Equity Yield and Premium&#148;). The reorganization was</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>pursuant to an Agreement and Plan of Reorganization, which was approved</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>by the shareholders of Equity Yield and Equity Yield and Premium on</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>August 29, 2008. Under the Agreement and Plan of Reorganization,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20,954,427 common shares of Equity Yield and 16,812,195 common</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>shares of Equity Yield and Premium were exchanged for 16,900,492 and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13,642,214 common shares, respectively, of Capital and Income. The</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>conversion ratios were 0.80653563 and 0.81144752 for Equity Yield</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Equity Yield and Premium, respectively. The assets of Equity Yield</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Equity Yield and Premium, each consisting of securities and related</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>receivables less liabilities, were converted on a tax-free basis. On the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Reorganization Date, the net assets of Capital and Income were valued at</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$591,399,963 (including net assets of $232,938,216 for the Equity Yield</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>which was comprised of $329,483,363 of paid-in capital, $16,478,636</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of accumulated losses and $80,066,511 of unrealized depreciation; and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>net assets of $188,029,937 for the Equity Yield and Premium which was</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>comprised of $270,207,354 of paid-in capital, $15,306,982 of accumu-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>lated losses and $66,870,435 of unrealized depreciation).</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-Demi,Arial,Helvetica,sans-serif>10. Subsequent Events:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds paid net investment income dividends on May 29, 2009 to</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>shareholders of record on May 15, 2009 in the following amounts:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="56%"></TD>
     <TD width="43%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.100000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.080800</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.130000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.094583</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.105000</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The dividends declared on Preferred Shares for the period May 1, 2009</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>through May 31, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="48%"></TD>
     <TD width="34%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Dividends</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Series</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Declared</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$23,755</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$29,745</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$23,841</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$26,869</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$26,161</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$69,574</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$69,639</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$69,636</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$69,771</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>M7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$26,097</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$26,088</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$26,062</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$32,606</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>F7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$32,434</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W28</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$45,918</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>TH28</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$40,303</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>T7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8,533</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W7</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 9,277</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ 8,356</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The Funds&#146; distribution rates declared on June 1, 2009 were as follows:</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="57%"></TD>
     <TD width="42%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Per Share</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Amount</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.0750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.0600</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.1000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.0750</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.0725</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>62 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Officers and Directors/Trustees</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Richard E. Cavanagh, Chairman of the Board and Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Karen P. Robards, Vice Chair of the Board, Chair of the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Audit Committee and Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>G. Nicholas Beckwith, III, Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Richard S. Davis, Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kent Dixon, Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Frank J. Fabozzi, Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kathleen F. Feldstein, Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>James T. Flynn, Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Henry Gabbay, Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Jerrold B. Harris, Director/Trustee</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>R. Glenn Hubbard, Director/Trustee</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>W. Carl Kester, Director/Trustee</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Donald C. Burke, Fund President and Chief Executive Officer</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Anne F. Ackerley, Vice President</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Neal J. Andrews, Chief Financial Officer</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Jay M. Fife, Treasurer</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Brian P. Kindelan, Chief Compliance Officer of the Funds</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Howard B. Surloff, Secretary</FONT></P>
<P align=left><B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Custodians</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Bank and Trust Company</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Boston, MA 02101</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Brown Brothers Harriman &amp; Co.</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Boston, MA 02109</FONT><BR>
<BR>
<B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Transfer Agents</FONT></B><BR>
<BR>
<B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common Shares</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Computershare Trust Companies, N.A.</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1</FONT></SUP><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Canton, MA 02021</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BNY Mellon Shareowner Services</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2</FONT></SUP><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Jersey City, NJ 07310</FONT><BR>
<BR>
<B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Auction Agent</FONT></B><BR>
<BR>
<B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Preferred Shares</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BNY Mellon Shareowner Services</FONT><SUP><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3</FONT></SUP><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Jersey City, NJ 07310</FONT><BR>
<BR>
<B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Accounting Agent</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>State Street Bank and Trust Company</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Princeton, NJ 08540</FONT><BR>
<BR>
<B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Independent Registered Public Accounting Firm</FONT></B><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Deloitte &amp; Touche </FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LLP</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Princeton, NJ 08540</FONT><BR>
<BR>
<B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Legal Counsel</FONT></B><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Skadden, Arps, Slate, Meagher &amp; Flom </FONT><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>LLP</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>New York, NY 10036</FONT></P>
<P align=left><B><FONT size=2 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Address of the Funds</FONT></B><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100 Bellevue Parkway</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Wilmington, DE 19809</FONT></P>
<P align=left><SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>1 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For all Funds except Capital and Income.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For Capital and Income.</FONT><BR>
<SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>3 </FONT></SUP><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>For Floating Rate, Preferred and Corporate, Preferred and Equity, Preferred Income</FONT><BR>
<FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Preferred Opportunity.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Enhanced Capital and Income Fund, Inc. is managed by a team of investment professionals. Effective January 1 and February 2, 2009 Kurt</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Schansinger and Kyle McClements, respectively joined Kevin Rendino as the Fund&#146;s co-portfolio managers responsible for the day-to-day management</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of the Fund&#146;s portfolio and the selection of its investments. Mr. Rendino has been a member of the Fund&#146;s management team since 2004 and Messrs.</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Schansinger and McClements since 2009.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kevin Rendino is Managing Director of BlackRock, Inc. since 2006 and head of BlackRock&#146;s Basic Value Equity team; Managing Director of Merrill</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Lynch Investment Managers, L.P. (&#147;MLIM&#148;) from 2000 to 2006.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kurt Schansinger is Managing Director of BlackRock, Inc. since 2006; Managing Director of MLIM from 2000 to 2006.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kyle McClements is Director of BlackRock, Inc. since 2006; Vice President of BlackRock, Inc. from 2005 to 2006; Vice President of State Street</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Research &amp; Management from 2004 to 2005.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>63</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Officers and Directors/Trustees (concluded)</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Floating Rate Income Trust is managed by a team of investment professionals. Effective May 8, 2009, Leland T. Hart and C. Adrian Marshall</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>joined James E. Keenan as the Fund&#146;s co-portfolio managers responsible for the day-to-day management of the Fund&#146;s portfolio and the selection of</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>its investments. Mr. Keenan has been a member of the Fund&#146;s management team since 2007 and Messrs. Hart and Marshall since 2009.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Leland T. Hart is Managing Director of BlackRock Inc. since 2009; Partner of R3 Capital Partners (&#147;R3&#148;) in 2009 and Managing Director thereof from</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>2008 to 2009; Managing Director of Lehman Brothers from 2006 to 2008 and Executive Director thereof from 2003 to 2006.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>James E. Keenan is Managing Director of BlackRock, Inc. since 2008 and Director thereof from 2004 to 2008; Head of the Leveraging Finance</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Portfolio team, senior high yield trader at Columbia management from 2003 to 2004.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>C. Adrian Marshall is Director of BlackRock, Inc. since 2007 and Vice President thereof from 2004 to 2007.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>BlackRock Preferred and Equity Advantage Trust is managed by a team of investment professionals. Effective February 2, 2009, Debra Jelilian and Kyle</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>McClements joined John Burger and Daniel Chen as the Fund&#146;s co-portfolio managers responsible for the day-to-day management of the Fund&#146;s portfo-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>lio and the selection of its investments. Messrs. Burger and Chen have been members of the Fund&#146;s management team since 2006 and Ms. Jelilian</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>and Mr. McClements since 2009.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>John Burger is Managing Director of BlackRock, Inc. since 2006; Managing Director of MLIM from 2004 to 2006 and Director thereof from 1996 to 2004.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Daniel Chen is Director of BlackRock, Inc. since 2007; Vice President of BlackRock, Inc. from 2004 to 2007; Associate of BlackRock, Inc. from 2001</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>to 2004.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Debra Jelilian is Managing Director of BlackRock, Inc. since 2009; Director of BlackRock, Inc. from 2006 to 2009; Director of MLIM from 1999 to 2006.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Kyle McClements is Director of BlackRock, Inc. since 2006; Vice President of BlackRock, Inc. from 2005 to 2006; Vice President of State Street</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Research &amp; Management from 2004 to 2005.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>64 SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
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<P align=left><FONT color=#0035c4 size=4 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>Additional Information</FONT><BR>
<BR>
<B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Section 19 Notices</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>The amounts and sources of distributions reported are only estimates and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>are not being provided for tax reporting purposes. The actual amounts and</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>sources for tax reporting purposes will depend upon each Fund&#146;s investment</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>experience during the year and may be subject to changes based on the tax</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>regulations. Shareholders should not draw any conclusions about the Funds&#146;</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment performance from the amount of distributions or from the terms</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of each Funds&#146; Plan. The Funds will send you a Form 1099-DIV each calendar</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>year that will tell you how to report these distributions for federal income</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tax purposes.</FONT></P>
<TABLE border=0 cellSpacing=0>
<TR>
     <TD width="21%"></TD>
     <TD width="15%"></TD>
     <TD width="9%"></TD>
     <TD width="9%"></TD>
     <TD width="8%"></TD>
     <TD width="9%"></TD>
     <TD width="10%"></TD>
     <TD width="10%"></TD>
     <TD width="5%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=3 align=left><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Fiscal Year-to-Date Cumulative</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Percentage of Fiscal Year-to-Date</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Distributions by Character</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cumulative Distributions by Character</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Per</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Net</FONT></B>&nbsp;</TD>
     <TD align=center>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Total Per</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Realized</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Return of</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Investment</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Realized</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Return of</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Common</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Gains</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Share</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Income</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital Gains</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Capital</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>Share</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.21095</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ &#151;</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.75905</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.97000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>22%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>78%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.99690</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ &#151;</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.15523</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$1.15213</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>87%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>13%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Corporate</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.46131</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ &#151;</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.11349</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.57480</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>80%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>20%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred and Equity</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.52135</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ &#151;</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.25865</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.78000</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>67%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>33%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Income</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.56706</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ &#151;</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.08044</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.64750</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>88%</FONT>&nbsp;</TD>
     <TD align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12%</FONT>&nbsp;</TD>
     <TD align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100%</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Preferred Opportunity</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.62651</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$ &#151;</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.08349</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>$0.71000</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>88%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>0%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>12%</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>100%</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><B><FONT color=#0035c4 size=1 face=FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif>General Information</FONT></B><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Capital and Income&#146;s Board recently approved a change to the Fund&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>option writing policy. The Fund has the authority to write (</FONT><FONT size=2 face=FranklinGothic-BookCndItal,Arial,Helvetica,sans-serif>i.e.</FONT><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>, sell) put</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>options on the types of securities or instruments that may be held by the</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Fund, provided that such put options are covered, meaning that such</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>options are secured by segregated, liquid instruments. Under the original</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>policy, the Fund was limited from selling puts if, as a result, more than 50%</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>of the Fund&#146;s assets would be required to cover its potential obligations</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>under its hedging and other investment transactions. The Board approved</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the elimination of this 50% requirement. When the Fund writes covered put</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>options, it bears the risk of loss if the value of the underlying stock declines</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>below the exercise price minus the put premium. If the option is exercised,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Fund could incur a loss if it is required to purchase the stock underly-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ing the put option at a price greater than the market price of the stock at</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the time of exercise plus the put premium the Fund received when it wrote</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the option. While the Fund&#146;s potential gain in writing a covered put option</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>is limited to distributions earned on the liquid assets securing the put</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>option plus the premium received from the purchaser of the put option,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the Fund risks a loss equal to the entire exercise price of the option minus</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>the put premium.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>During the period there were no material changes in the Funds&#146; investment</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>objectives or policies or to the Funds&#146; charters or by-laws that were not</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>approved by the shareholders or in the principal risk factors associated</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>with investment in the Funds.</FONT></P>
<P align=left><FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>During this period there have been no changes in the persons who are pri-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>marily responsible for the day-to-day management of the Funds&#146; portfolios,</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>other than those disclosed on pages 63 and 64 of this report.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Floating Rate&#146;s Board recently approved a change to the Fund&#146;s name from</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>&#147;BlackRock Global Floating Rate Income Trust&#148; to &#147;BlackRock Floating Rate</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Income Trust&#148;.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Quarterly performance, semi-annual and annual reports and other informa-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>tion regarding the Funds may be found on BlackRock&#146;s website, which can</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>be accessed at http://www.blackrock.com. This reference to BlackRock&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>website is intended to allow investors public access to information regard-</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>ing the Funds and does not, and is not intended to, incorporate BlackRock&#146;s</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>website into this report.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Electronic Delivery</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Electronic copies of most financial reports are available on the Funds&#146;</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>websites or shareholders can sign up for e-mail notifications of quarterly</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>statements, annual and semi-annual reports by enrolling in the Funds&#146;</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>electronic delivery program.</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>Shareholders Who Hold Accounts with Investment Advisors, Banks</FONT><BR>
<FONT size=2 face=FranklinGothic-MedCnd,Arial,Helvetica,sans-serif>or Brokerages:</FONT><BR>
<BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>Please contact your financial advisor to enroll. Please note that not all</FONT><BR>
<FONT size=2 face=FranklinGothic-BookCnd,Arial,Helvetica,sans-serif>investment advisors, banks or brokerages may offer this service.</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>SEMI-ANNUAL REPORT</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>APRIL 30, 2009</FONT></P>
<P align=left><FONT size=1 face=FranklinGothic-Book,Arial,Helvetica,sans-serif>65</FONT></P>
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<P align="left">
<FONT color="#0035c4" size=4 face="FranklinGothic-Book,Arial,Helvetica,sans-serif">Additional Information (concluded)</FONT><BR>
<BR>
<B><FONT color="#0035c4" size=1 face="FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif">General Information (concluded)</FONT></B></P>
<P align="left">
<FONT size=2 face="FranklinGothic-MedCnd,Arial,Helvetica,sans-serif">Householding</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">The Funds will mail only one copy of shareholder documents, including</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">annual and semi-annual reports and proxy statements, to shareholders</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">with multiple accounts at the same address. This practice is commonly</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">called &#147;householding&#148; and it is intended to reduce expenses and eliminate</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">duplicate mailings of shareholder documents. Mailings of your shareholder</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">documents may be householded indefinitely unless you instruct us other-</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">wise. If you do not want the mailing of these documents to be combined</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">with those for other members of your household, please contact the Funds</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">at (800) 441-7762.</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-MedCnd,Arial,Helvetica,sans-serif">Availability of Quarterly Schedule of Investments</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">The Funds file their complete schedule of portfolio holdings with the SEC</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">for the first and third quarters of each fiscal year on Form N-Q. The Funds&#146;</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">Forms N-Q are available on the SEC&#146;s website at http://www.sec.gov</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">and may also be reviewed and copied at the SEC&#146;s Public Reference Room</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">in Washington, DC. Information on the operation of the Public Reference</FONT></P>
<P align="left">
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">Room may be obtained by calling (800) SEC-0330. The Funds&#146; Forms</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">N-Q may also be obtained upon request and without charge by calling</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">(800) 441-7762.</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-MedCnd,Arial,Helvetica,sans-serif">Availability of Proxy Voting Record</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">Information about how each Fund voted proxies relating to securities</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">held in each Fund&#146;s portfolio during the most recent 12-month period</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">ended June 30, 2008 is available upon request and without charge</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">(1) at www.blackrock.com or by calling (800) 441-7762 and (2) on the</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">Securities and Exchange Commission&#146;s website at http://www.sec.gov.</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-MedCnd,Arial,Helvetica,sans-serif">Availability of Proxy Voting Policies and Procedures</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">A description of the policies and procedures that the Funds use to</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">determine how to vote proxies relating to portfolio securities is available</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">(1) without charge, upon request, by calling toll-free (800) 441-7762;</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">(2) at www.blackrock.com; and (3) on the Securities and Exchange</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">Commission&#146;s website at http://www.sec.gov.</FONT></P>
<P align="left">
<B><FONT color="#0035c4" size=1 face="FranklinGothic-DemiCnd,Arial,Helvetica,sans-serif">BlackRock Privacy Principles</FONT></B></P>
<P align="left">
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">BlackRock is committed to maintaining the privacy of its current and former</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">fund investors and individual clients (collectively, &#147;Clients&#148;) and to safeguard-</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">ing their non-public personal information. The following information is pro-</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">vided to help you understand what personal information BlackRock collects,</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">how we protect that information and why in certain cases we share such</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">information with select parties.</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">If you are located in a jurisdiction where specific laws, rules or regulations</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">require BlackRock to provide you with additional or different privacy-related</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">rights beyond what is set forth below, then BlackRock will comply with those</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">specific laws, rules or regulations.</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">BlackRock obtains or verifies personal non-public information from and</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">about you from different sources, including the following: (i) information</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">we receive from you or, if applicable, your financial intermediary, on applica-</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">tions, forms or other documents; (ii) information about your transactions</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">with us, our affiliates, or others; (iii) information we receive from a consumer</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">reporting agency; and (iv) from visits to our websites.</FONT></P>
<P align="left">
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">BlackRock does not sell or disclose to non-affiliated third parties any non-</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">public personal information about its Clients, except as permitted by law</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">or as is necessary to respond to regulatory requests or to service Client</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">accounts. These non-affiliated third parties are required to protect the</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">confidentiality and security of this information and to use it only for its</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">intended purpose.</FONT><BR>
<BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">We may share information with our affiliates to service your account or to</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">provide you with information about other BlackRock products or services</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">that may be of interest to you. In addition, BlackRock restricts access to</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">non-public personal information about its Clients to those BlackRock</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">employees with a legitimate business need for the information. BlackRock</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">maintains physical, electronic and procedural safeguards that are designed</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">to protect the non-public personal information of its Clients, including proce-</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">dures relating to the proper storage and disposal of such information.</FONT></P>
<P align="left">
<FONT size=1 face="FranklinGothic-Book,Arial,Helvetica,sans-serif">66 SEMI-ANNUAL REPORT</FONT></P>
<P align="left">
<FONT size=1 face="FranklinGothic-Book,Arial,Helvetica,sans-serif">APRIL 30, 2009</FONT></P>

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<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a represen-</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">tation of future performance. BlackRock Floating Rate Income Trust, BlackRock Preferred and Corporate Income Strategies Fund, Inc., BlackRock Preferred</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">and Equity Advantage Trust, BlackRock Preferred Income Strategies Fund, Inc. and BlackRock Preferred Opportunity Trust leverage their Common Shares,</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">which creates risk for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of Common Shares, and the</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">risk that fluctuations in short-term interest rates may reduce the Common Shares&#146; yield. Statements and other information herein are as dated and are</FONT><BR>
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">subject to change.</FONT></P>
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<P align="left">
<FONT size=2 face="FranklinGothic-BookCnd,Arial,Helvetica,sans-serif">#CE-EQFI-7-4/09</FONT></P>

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<P align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 2 &#150; Code of Ethics &#150; Not Applicable to this semi-annual report</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 3 &#150; Audit Committee Financial Expert &#150; Not Applicable to this semi-annual report</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 4 &#150; Principal Accountant Fees and Services &#150; Not Applicable to this semi-annual report</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 5 &#150; Audit Committee of Listed Registrants &#150; Not Applicable to this semi-annual report</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 6 &#150; Investments</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(a) The registrant&#146;s Schedule of Investments is included as part of the Report to</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Stockholders filed under Item 1 of this form.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(b) Not Applicable due to no such divestments during the semi-annual period covered since</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the previous Form N-CSR filing.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 7 &#150; Disclosure of Proxy Voting Policies and Procedures for Closed-End Management</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investment Companies &#150; Not Applicable to this semi-annual report</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 8 &#150; Portfolio Managers of Closed-End Management Investment Companies &#150; as of April 30,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2009</FONT></P>
<P align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(a) Not Applicable</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(b) Effective May 8, 2009, the registrant is managed by a team of investment professionals</FONT></P>
<P align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">comprised of Leland T. Hart, Managing Director at BlackRock, James E. Keenan,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Managing Director at BlackRock and C. Adrian Marshall, Director at BlackRock. Messrs.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Hart, Keenan and Marshall are the Fund&#146;s co-portfolio managers and are responsible for the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">day-to-day management of the Fund&#146;s portfolio and the selection of its investments. Mr.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Keenan has been a member of the Fund&#146;s management team since 2007. Messrs. Hart and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Marshall have been members of the Fund&#146;s management team since 2009.</FONT></P>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Portfolio Manager</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left>&nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Biography</FONT></B>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>
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     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Leland T. Hart</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD colSpan=5 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Managing Director of BlackRock, Inc. since 2009; Partner of R3 Capital</FONT>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD colSpan=5 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Partners ("R3") in 2009; Managing Director of R3 from 2008 - 2009;</FONT>&nbsp;</TD>
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     <TD colSpan=6 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Managing Director of Lehman Brothers from 2006 - 2008; Executive Director</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of Lehman Brothers from 2003 - 2006.</FONT>&nbsp;</TD>
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     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">James E. Keenan</FONT>&nbsp;</TD>
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     <TD colSpan=6 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Managing Director of BlackRock, Inc. since 2008; Director of BlackRock, Inc.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=6 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from 2004 - 2008; Head of the Leveraged Finance Portfolio team; senior high</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">yield trader at Columbia Management from 2003 to 2004.</FONT>&nbsp;</TD>
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     <TD colSpan=2 align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">C. Adrian Marshall</FONT>&nbsp;</TD>
     <TD colSpan=6 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Director of BlackRock, Inc. since 2007; Vice President of BlackRock, Inc.</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=left>&nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from 2004 - 2007.</FONT>&nbsp;</TD>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(a)(2) As of May 8, 2009:</FONT>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
     <TD colSpan=3 align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(ii) Number of Other Accounts Managed</FONT></B>&nbsp;</TD>
     <TD colSpan=3 align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(iii) Number of Other Accounts and</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
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     <TD colSpan=3 align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and Assets by Account Type</FONT></B>&nbsp;</TD>
     <TD colSpan=3 align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Assets for Which Advisory Fee is</FONT></B>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Performance-Based</FONT></B>&nbsp;</TD>
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     <TD align=left>&nbsp;</TD>
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     <TD align=right><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other Pooled</FONT></B>&nbsp;</TD>
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     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other Pooled</FONT></B>&nbsp;</TD>
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     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(i) Name of</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=right><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Registered</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Investment</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Registered</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Investment</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Portfolio Manager</FONT></B>&nbsp;</TD>
     <TD colSpan=2 align=right><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Investment</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Vehicles</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Accounts</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Investment</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Vehicles</FONT></B>&nbsp;</TD>
     <TD align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Accounts</FONT></B>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Companies</FONT></B>&nbsp;</TD>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Companies</FONT></B>&nbsp;</TD>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=left><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Leland T. Hart</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=right>&nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$1.87 Billion</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$0</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=left><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">James E. Keenan</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=right>&nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">14</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">54</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ccffff align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13</FONT>&nbsp;</TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=2 align=right><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$6.64 Billion</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$2.69 Billion</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$8.62 Billion</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$0</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$1.94 Billion</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$4.09 Billion</FONT>&nbsp;</TD></TR></TABLE><BR>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">C. Adrian Marshall</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;1.87 Billion</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;49.4 Million</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;441.3 Million</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;0</FONT>&nbsp;</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;0</FONT>&nbsp;</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(iv) Potential Material Conflicts of Interest</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock and its affiliates (collectively, herein &#147;BlackRock&#148;) has built a professional</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">working environment, firm-wide compliance culture and compliance procedures and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">systems designed to protect against potential incentives that may favor one account over</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">another. BlackRock has adopted policies and procedures that address the allocation of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment opportunities, execution of portfolio transactions, personal trading by employees</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and other potential conflicts of interest that are designed to ensure that all client accounts are</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">treated equitably over time. Nevertheless, BlackRock furnishes investment management and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">advisory services to numerous clients in addition to the Fund, and BlackRock may,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">consistent with applicable law, make investment recommendations to other clients or</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounts (including accounts which are hedge funds or have performance or higher fees</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">such fees), which may be the same as or different from those made to the Fund. In addition,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock, its affiliates and significant shareholders and any officer, director, stockholder</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">or employee may or may not have an interest in the securities whose purchase and sale</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock recommends to the Fund. BlackRock, or any of its affiliates or significant</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">shareholders, or any officer, director, stockholder, employee or any member of their</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">families may take different actions than those recommended to the Fund by BlackRock with</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">respect to the same securities. Moreover, BlackRock may refrain from rendering any advice</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">or services concerning securities of companies of which any of BlackRock&#146;s (or its</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliates&#146; or significant shareholders&#146;) officers, directors or employees are directors or</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">officers, or companies as to which BlackRock or any of its affiliates or significant</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">shareholders or the officers, directors and employees of any of them has any substantial</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">economic interest or possesses material non-public information. Each portfolio manager</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">also may manage accounts whose investment strategies may at times be opposed to the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">strategy utilized for a fund. In this connection, it should be noted that Mr. Keenan currently</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">manages certain accounts that are subject to performance fees. In addition, a portfolio</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">manager may assist in managing certain hedge funds and may be entitled to receive a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">portion of any incentive fees earned on such funds and a portion of such incentive fees may</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">be voluntarily or involuntarily deferred. Additional portfolio managers may in the future</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">manage other such accounts or funds and may be entitled to receive incentive fees.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">fairly. When BlackRock purchases or sells securities for more than one account, the trades</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">allocate investments in a fair and equitable manner among client accounts, with no account</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">receiving preferential treatment. To this end, BlackRock has adopted a policy that is</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">intended to ensure that investment opportunities are allocated fairly and equitably among</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">client accounts over time. This policy also seeks to achieve reasonable efficiency in client</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">transactions and provide BlackRock with sufficient flexibility to allocate investments in a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">manner that is consistent with the particular investment discipline and client base.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(a)(3) As of May 8, 2009:</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Portfolio Manager Compensation Overview</FONT></B></P>

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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock&#146;s financial arrangements with its portfolio managers, its competitive</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensation and its career path emphasis at all levels reflect the value senior management</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">places on key resources. Compensation may include a variety of components and may vary</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from year to year based on a number of factors. The principal components of compensation</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">include a base salary, a performance-based discretionary bonus, participation in various</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits programs and one or more of the incentive compensation programs established by</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock such as its Long-Term Retention and Incentive Plan and Restricted Stock</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Program.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Base compensation. </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Generally, portfolio managers receive base compensation based on</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">their seniority and/or their position with the firm. Senior portfolio managers who perform</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">additional management functions within the portfolio management group or within</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock may receive additional compensation for serving in these other capacities.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Discretionary Incentive Compensation</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Discretionary incentive compensation is a function of several components: the performance</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of BlackRock, Inc., the performance of the portfolio manager&#146;s group within BlackRock,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the investment performance, including risk-adjusted returns, of the firm&#146;s assets under</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">management or supervision by that portfolio manager relative to predetermined</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">benchmarks, and the individual&#146;s seniority, role within the portfolio management team,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">teamwork and contribution to the overall performance of these portfolios and BlackRock.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">In most cases, including for the portfolio managers of the Fund, these benchmarks are the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">same as the benchmark or benchmarks against which the performance of the Fund or other</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounts managed by the portfolio managers are measured. BlackRock&#146;s Chief Investment</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Officers determine the benchmarks against which the performance of funds and other</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounts managed by each portfolio manager is compared and the period of time over which</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance is evaluated. With respect to the portfolio managers, such benchmarks include</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the following:</FONT></P>
<TABLE border=0 cellspacing=0>
<TR>
     <TD width=23%></TD>
     <TD width=76%></TD></TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Portfolio Manager</FONT></B>&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benchmarks Applicable to Each Manager</FONT></B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Leland T. Hart</FONT>&nbsp;</TD>
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A combination of market-based indices (e.g., CSFB Leveraged Loan</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Index, CSFB High Yield II Value Index), certain customized indices</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and certain fund industry peer groups.</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">James E. Keenan</FONT>&nbsp;</TD>
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A combination of market-based indices (e.g., The Barclays Capital U.S.</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Corporate High Yield 2% Issuer Cap Index), certain customized indices</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and certain fund industry peer groups.</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">C. Adrian Marshall</FONT>&nbsp;</TD>
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A combination of market-based indices (e.g., CSFB Leveraged Loan</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Index, CSFB High Yield II Value Index), certain customized indices</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and certain fund industry peer groups.</FONT>&nbsp;</TD>
</TR>
</TABLE><BR>
<P align="left">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock&#146;s Chief Investment Officers make a subjective determination with respect to the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">portfolio managers&#146; compensation based on the performance of the funds and other accounts</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">managed by each portfolio manager relative to the various benchmarks noted above.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Performance is measured on both a pre-tax and after-tax basis over various time periods</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including 1, 3, 5 and 10-year periods, as applicable.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Distribution of Discretionary Incentive Compensation</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Discretionary incentive compensation is distributed to portfolio managers in a combination</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base</FONT></P>

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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">salary, represents more than 60% of total compensation for the portfolio managers. Paying</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">given year &#147;at risk&#148; based on BlackRock&#146;s ability to sustain and improve its performance</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">over future periods.</FONT><BR>
<BR>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Long-Term Retention and Incentive Plan (&#147;LTIP&#148;) &#151; </FONT></I><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The LTIP is a
long-term</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">incentive plan that seeks to reward certain key employees. Prior to 2006, the plan provided</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the grant of awards that were expressed as an amount of cash that, if properly vested and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">subject to the attainment of certain performance goals, will be settled in cash and/or in</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock, Inc. common stock. Beginning in 2006, awards are granted under the LTIP in</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">attainment of certain performance goals, will be settled in BlackRock, Inc. common stock.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Messrs. Keenan and Marshall have each received awards under the LTIP.</FONT><BR>
<BR>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Deferred Compensation Program &#151; </FONT></I><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A portion of the compensation paid to</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">eligible BlackRock employees may be voluntarily deferred into an account that tracks the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance of certain of the firm&#146;s investment products. Each participant in the deferred</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensation program is permitted to allocate his deferred amounts among the various</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment options. Messrs. Keenan and Marshall have each participated in the deferred</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensation program.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other compensation benefits. </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition to base compensation and discretionary</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">incentive compensation, portfolio managers may be eligible to receive or participate in one</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">or more of the following:</FONT><BR>
<BR>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Incentive Savings Plans &#151; </FONT></I><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock, Inc. has created a variety of incentive</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">savings plans in which BlackRock employees are eligible to participate, including a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">company match equal to 50% of the first 6% of eligible pay contributed to the plan capped</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">at &#36;4,000 per year, and a company retirement contribution equal to 3-5% of eligible</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensation. The RSP offers a range of investment options, including registered</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment companies managed by the firm. BlackRock contributions follow the investment</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">direction set by participants for their own contributions or, absent employee investment</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">direction, are invested into a balanced portfolio. The ESPP allows for investment in</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock common stock at a 5% discount on the fair market value of the stock on the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">or a dollar value of &#36;25,000. Each portfolio manager except Mr. Hart is eligible to</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">participate in these plans.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">United Kingdom-based portfolio managers are also eligible to participate in</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">broad-based plans offered generally to BlackRock employees, including broad-based</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">retirement, health and other employee benefit plans. For example, BlackRock has created a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">variety of incentive savings plans in which BlackRock employees are eligible to participate,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including a Group Personal Pension Plan (GPPP) and the BlackRock Employee Stock</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Purchase Plan (ESPP). The employer contribution to the GPPP is between 6% to 15%</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(dependent on service related entitlement) of eligible pay capped at &#163;150,000 per annum.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The GPPP offers a range of investment options, including several collective investment</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">funds managed by the firm. BlackRock contributions follow the investment direction set by</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">participants for their own contributions or, in the absence of an investment election being</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">made, are invested into a passive balanced managed fund. The ESPP allows for investment</FONT></P>

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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in BlackRock common stock at a 5% discount on the fair market value of the stock on the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">or a dollar value of &#36;25,000. Mr. Hart is eligible to participate in these plans.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(a)(4) </FONT><I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Beneficial Ownership of Securities &#150; </FONT></I><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">as of May 8, 2009</FONT><I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">.</FONT></I></P>
<TABLE border=0 cellspacing=0>
<TR>
     <TD width=39%></TD>
     <TD width=60%></TD></TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Portfolio Manager</FONT></B>&nbsp;</TD>
	<TD align=left>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Dollar Range of Equity</FONT></B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities Beneficially Owned</FONT></B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Leland T. Hart</FONT>&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">None</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">James E. Keenan</FONT>&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">None</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">C. Adrian Marshall</FONT>&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">None</FONT>&nbsp;</TD>
</TR>
</TABLE><BR>
<P align="left">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 9 &#150; Purchases of Equity Securities by Closed-End Management Investment Company and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Affiliated Purchasers &#150; Not Applicable</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 10 &#150; Submission of Matters to a Vote of Security Holders &#150; The registrant&#146;s Nominating and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Governance Committee will consider nominees to the board of directors recommended by</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">shareholders when a vacancy becomes available. Shareholders who wish to recommend a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">nominee should send nominations that include biographical information and set forth the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">qualifications of the proposed nominee to the registrant&#146;s Secretary. There have been no</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">material changes to these procedures.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 11 &#150; Controls and Procedures</FONT></P>
<P align="left">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11(a) &#150; The registrant&#146;s principal executive and principal financial officers or persons performing</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">similar functions have concluded that the registrant&#146;s disclosure controls and procedures (as</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;1940 Act&#148;)) are effective as of a date within 90 days of the filing of this report based on the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Rule 13(a)-15(b) under the Securities Exchange Act of 1934, as amended.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11(b) &#150; There were no changes in the registrant&#146;s internal control over financial reporting (as</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the period covered by this report that have materially affected, or are reasonably likely to</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">materially affect, the registrant&#146;s internal control over financial reporting.</FONT></P>
<P align="left">
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 12 &#150; Exhibits attached hereto</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12(a)(1) &#150; Code of Ethics &#150; Not Applicable to this semi-annual report</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12(a)(2) &#150; Certifications &#150; Attached hereto</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12(a)(3) &#150; Not Applicable</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12(b) &#150; Certifications &#150; Attached hereto</FONT></P>

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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the undersigned, thereunto duly authorized.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock Floating Rate Income Trust</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: </FONT><U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Donald C. Burke</FONT></U><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Donald C. Burke</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Executive Officer of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock Floating Rate Income Trust</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: June 19, 2009</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company Act of 1940, this report has been signed below by the following persons on behalf</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the registrant and in the capacities and on the dates indicated.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: </FONT><U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Donald C. Burke</FONT></U><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Donald C. Burke</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Executive Officer (principal executive officer) of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock Floating Rate Income Trust</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: June 19, 2009</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: </FONT><U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Neal J. Andrews</FONT></U><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Neal J. Andrews</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer (principal financial officer) of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock Floating Rate Income Trust</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: June 19, 2009</FONT></P>

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<TYPE>EX-99.CERT
<SEQUENCE>2
<FILENAME>certsbgt.htm
<DESCRIPTION>CERTIFICATION
<TEXT>

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<P align="left"> <B><FONT size=2 face="Arial-BoldMT,Arial,Helvetica,sans-serif">EX-99.CERT</FONT></B><BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF</FONT></B><BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">THE SARBANES-OXLEY ACT OF 2002</FONT></B><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I, Donald C. Burke, Chief Executive Officer (principal executive officer) of BlackRock Floating Rate Income Trust, certify</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">that:</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1. I have reviewed this report on Form N-CSR of BlackRock Floating Rate Income Trust;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">material fact necessary to make the statements made, in light of the circumstances under which such statements were made,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">not misleading with respect to the period covered by this report;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3. Based on my knowledge, the financial statements, and other financial information included in this report fairly</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in this report;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">designed under our supervision, to ensure that material information relating to the registrant, including its</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">which this report is being prepared;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b) designed such internal control over financial reporting, or caused such internal control over financial</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial reporting and the preparation of financial statements for external purposes in accordance with generally</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">accepted accounting principles;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">days prior to the filing date of this report, based on such evaluation; and</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">d) disclosed in this report any change in the registrant's internal control over financial reporting that</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reasonably likely to materially affect, the registrant's internal control over financial reporting; and</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the registrant's board of directors (or persons performing the equivalent functions):</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a) all significant deficiencies and material weaknesses in the design or operation of internal control over</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">summarize, and report financial information; and</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b) any fraud, whether or not material, that involves management or other employees who have a significant</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">role in the registrant's internal control over financial reporting.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: June 19, 2009</FONT><BR>
<BR>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Donald C. Burke</FONT></U><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Donald C. Burke</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Executive Officer (principal executive officer) of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock Floating Rate Income Trust</FONT></P>
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<P align="left"> <B><FONT size=2 face="Arial-BoldMT,Arial,Helvetica,sans-serif">EX-99.CERT</FONT></B><BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND</FONT></B><BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</FONT></B><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I, Neal J. Andrews, Chief Financial Officer (principal financial officer) of BlackRock Floating Rate Income</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Trust, certify that:</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1. I have reviewed this report on Form N-CSR of BlackRock Floating Rate Income Trust;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">omit to state a material fact necessary to make the statements made, in light of the circumstances under</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">which such statements were made, not misleading with respect to the period covered by this report;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3. Based on my knowledge, the financial statements, and other financial information included in this</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">report fairly present in all material respects the financial condition, results of operations, changes in net</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">registrant as of, and for, the periods presented in this report;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company Act of 1940) for the registrant and have:</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a) designed such disclosure controls and procedures, or caused such disclosure controls and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">procedures to be designed under our supervision, to ensure that material information relating to the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">registrant, including its consolidated subsidiaries, is made known to us by others within those</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">entities, particularly during the period in which this report is being prepared;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b) designed such internal control over financial reporting, or caused such internal control</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">over financial reporting to be designed under our supervision, to provide reasonable assurance</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">regarding the reliability of financial reporting and the preparation of financial statements for</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">external purposes in accordance with generally accepted accounting principles;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">c) evaluated the effectiveness of the registrant's disclosure controls and procedures and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">presented in this report our conclusions about the effectiveness of the disclosure controls and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">procedures, as of a date within 90 days prior to the filing date of this report, based on such</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">evaluation; and</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">d) disclosed in this report any change in the registrant's internal control over financial</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reporting that occurred during the second fiscal quarter of the period covered by this report that</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">has materially affected, or is reasonably likely to materially affect, the registrant's internal control</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">over financial reporting; and</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">audit committee of the registrant's board of directors (or persons performing the equivalent functions):</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a) all significant deficiencies and material weaknesses in the design or operation of internal</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">control over financial reporting which are reasonably likely to adversely affect the registrant's</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ability to record, process, summarize, and report financial information; and</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b) any fraud, whether or not material, that involves management or other employees who</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">have a significant role in the registrant's internal control over financial reporting.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: June 19, 2009</FONT></P>
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<P align="left"> <U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Neal J. Andrews</FONT></U><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Neal J. Andrews</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer (principal financial officer) of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock Floating Rate Income Trust</FONT></P>
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<TYPE>EX-99.906 CERT
<SEQUENCE>3
<FILENAME>section906bgt.htm
<DESCRIPTION>CERTIFICATION
<TEXT>

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<P align="left"> <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibit 99.1350CERT</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Certification Pursuant to Rule 30a-2(b) under the 1940 Act and</FONT></B><BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Section 906 of the Sarbanes Oxley Act</FONT></B><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to 18 U.S.C. &#167; 1350, the undersigned officer of BlackRock Floating Rate Income Trust (the &#147;registrant&#148;), hereby</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">certifies, to the best of his knowledge, that the registrant's Report on Form N-CSR for the period ended April 30, 2009, (the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Report&#148;) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">that the information contained in the Report fairly presents, in all material respects, the financial condition and results of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations of the registrant.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: June 19, 2009</FONT><BR>
<BR>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Donald C. Burke</FONT></U><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Donald C. Burke</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Executive Officer (principal executive officer) of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock Floating Rate Income Trust</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to 18 U.S.C. &#167; 1350, the undersigned officer of BlackRock Floating Rate Income Trust (the &#147;registrant&#148;), hereby</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">certifies, to the best of his knowledge, that the registrant's Report on Form N-CSR for the period ended April 30, 2009, (the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Report&#148;) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">that the information contained in the Report fairly presents, in all material respects, the financial condition and results of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations of the registrant.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: June 19, 2009</FONT><BR>
<BR>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Neal J. Andrews</FONT></U><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Neal J. Andrews</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer (principal financial officer) of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BlackRock Floating Rate Income Trust</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">This certification is being furnished pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commission</FONT><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">.</FONT></B></P>
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