<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>nyc2-570637.txt
<TEXT>




    As filed with the Securities and Exchange Commission on November 17, 2005
                                            Securities Act Registration No. 333-
                                        Investment Company Registration No. 811-
--------------------------------------------------------------------------------



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM N-2


             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933     [X]
                           Pre-Effective Amendment No.                   [ ]
                           Post-Effective Amendment No.                  [ ]
                                     and/or
                          REGISTRATION STATEMENT UNDER
                       THE INVESTMENT COMPANY ACT OF 1940                [X]
                                  AMENDMENT NO.                          [ ]


                   BlackRock Municipal Advantage Income Trust
         (Exact Name of Registrant As Specified In Declaration of Trust)


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


                                 (800) 882-0052
              (Registrant's Telephone Number, Including Area Code)


                           Anne F. Ackerley, President
                   BlackRock Municipal Advantage Income Trust
                               40 East 52nd Street
                            New York, New York 10022
                     (Name and Address of Agent for Service)


                                   Copies to:

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

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

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                      CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
=============================================================================================================
<S>                                        <C>                <C>               <C>             <C>
                                                              Proposed         Proposed
                                                               Maximum          Maximum          Amount of
                                           Amount Being     Offering Price      Aggregate       Registration
Title of Securities Being Registered        Registered        per Unit       Offering Price        Fee
-------------------------------------------------------------------------------------------------------------
Common Shares, $.001 par value......     100,000 shares    $15.00           $1,500,000(1)     $176.55
=============================================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee.
   The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that the Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such dates as the Commission, acting pursuant to said Section 8(a),
may determine.

===============================================================================



<PAGE>


                   BlackRock Municipal Advantage Income Trust

                              CROSS REFERENCE SHEET


                               Part A--Prospectus

<TABLE>
<CAPTION>

            Items in Part A of Form N                              Location in Prospectus
------------------------------------------------  -------------------------------------------------------------

<S>                                               <C>
Item 1.  Outside Front Cover                      Cover Page
Item 2.  Cover Pages; Other Offering Information  Cover Page
Item 3.  Fee Table and Synopsis                   Prospectus Summary; Summary of Trust Expenses
Item 4.  Financial Highlights                     Not Applicable
Item 5.  Plan of Distribution                     Cover Page; Prospectus Summary; Underwriting
Item 6.  Selling Shareholders                     Not Applicable
Item 7.  Use of Proceeds                          Use of Proceeds; The Trust's Investments
Item 8.  General Description of the Registrant    The Trust; The Trust's Investments; Risks; Description
                                                    of Shares; Anti-Takeover Provisions in the Agreement
                                                    and Declaration of Trust; Closed-End Trust Structure;
Item 9.  Management                               Management of the Trust; Custodian and Transfer Agent;
                                                    Summary of Trust Expenses
Item 10. Capital Stock, Long-Term Debt, and      Description of Shares; Distributions; Dividend
         Other Securities                           Reinvestment Plan; Anti-Takeover Provisions in the
                                                    Agreement and Declaration of Trust; Tax Matters
Item 11. Defaults and Arrears on Senior
         Securities                              Not Applicable
Item 12. Legal Proceedings                       Legal Opinions
Item 13. Table of Contents of the Statement of   Table of Contents for the Statement of Additional Information
         Additional Information

                   Part B--Statement of Additional Information


Item 14. Cover Page                              Cover Page
Item 15. Table of Contents                       Cover Page
Item 16. General Information and History         Not Applicable
Item 17. Investment Objective and Policies       Investment Objective and Policies; Investment Policies
                                                    and Techniques; Other Investment Policies and
                                                    Techniques; Portfolio Transactions and Brokerage
Item 18. Management                              Management of the Trust; Portfolio Transactions and
                                                    Brokerage
Item 19. Control Persons and Principal Holders   Not Applicable
         of Securities
Item 20. Investment Advisory and Other Services  Management of the Trust; Experts
Item 21. Portfolio Managers                      Management of the Trust
Item 22. Brokerage Allocation and Other
         Practices                               Portfolio Transactions and Brokerage
Item 23. Tax Status                              Tax Matters
Item 24. Financial Statements                    Financial Statements; Independent Auditors' Report
</TABLE>

                            Part C--Other Information

Items 25-34 have been answered in Part C of this Registration Statement




<PAGE>



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

                              Subject to Completion
                 Preliminary Prospectus dated November 17, 2005


PROSPECTUS                                                    [GRAPHIC OMITTED]
----------                                                    -----------------

                                            Shares
                   BLACKROCK MUNICIPAL ADVANTAGE INCOME TRUST
                                  Common Shares
                                $15.00 per share

                             -----------------------

     Investment Objective. BlackRock Municipal Advantage Income Trust (the
"Trust") is a newly organized, diversified, closed-end management investment
company. The Trust's investment objective is to provide current income exempt
from regular Federal income tax. The Trust cannot ensure that it will achieve
its investment objective.

     Investment Advisor. The Trust's investment advisor is BlackRock Advisors,
Inc. ("BlackRock Advisors" or the "Advisor") and the Trust's sub-advisor is
BlackRock Financial Management, Inc. ("BlackRock Financial Management" or the
"Sub-Advisor"). We sometimes refer to the Advisor and the Sub-Advisor as the
"Advisors".

     Portfolio Contents. Under normal market conditions, the Trust will invest
at least 80% of its Managed Assets (as defined herein) in municipal bonds,
municipal securities and derivative instruments with exposure to such bonds or
securities, in each case that are expected to pay interest or income that is
exempt from regular Federal income tax, with at least 50% of its Managed Assets
invested in municipal bonds that at the time of investment are investment grade
quality. Investment grade quality bonds are bonds rated within the four highest
grades ("Baa" or "BBB" or better by Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Group ("S&P") or Fitch IBCA, Inc. ("Fitch")) or bonds
that are unrated but judged to be of comparable quality by the Trust's Advisor
or Sub-Advisor. The Trust may invest up to 50% of its Managed Assets in
municipal bonds that at the time of investment are rated as low as "C" by
Moody's, S&P or Fitch or bonds that are unrated but judged to be of comparable
quality by the Trust's Advisor or Sub-Advisor. Bonds of below investment grade
quality are regarded as having predominately speculative characteristics with
respect to the issuer's capacity to pay interest and repay principal, and are
commonly referred to as "junk bonds." The Trust intends for its bond portfolio
to consist primarily of long-term bonds and expects bonds in its portfolio to
have a duration of years or more under current market conditions. The Trust may
invest of up to 25% of its Managed Assets in residual interest municipal tender
option bonds, which are derivative interests of municipal bonds.

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

     Investing in the common shares involves certain risks. See "Risks" on page
    of this prospectus.

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                                                                             Estimated
                                                Price to       Sales         Offering       Proceeds to
                                                Public         Load(2)       Expenses(3)    Trust(4)
----------------------------------------------- -------------- ------------- -------------- -----------------
<S>                                             <C>            <C>           <C>            <C>
Per Share                                       $              $             $              $
----------------------------------------------- -------------- ------------- -------------- -----------------
Total(1)                                        $              $             $              $
----------------------------------------------- -------------- ------------- -------------- -----------------
</TABLE>


<PAGE>


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

(2)  BlackRock Advisors may pay certain qualifying underwriters a sales
     incentive fee, structuring fee or, alternatively, additional compensation
     in connection with the offering. BlackRock Advisors may pay commissions to
     employees of its affiliates that participate in the marketing of the
     Trust's common shares. See "Underwriting."

(3)  The Trust will pay offering expenses of the Trust (other than the sales
     load) up to an aggregate of $ per share of the Trust's common shares sold
     in this offering which may include a reimbursement of BlackRock Advisors'
     expenses incurred in connection with this offering. BlackRock Advisors has
     agreed to pay such offering expenses of the Trust to the extent they exceed
     $       per share of the Trust's common shares. The aggregate offering
     expenses (other than sales load) to be incurred by the Trust are estimated
     to be $       (including amounts incurred by BlackRock Advisors on behalf
     of the Trust).

(4)  Proceeds to the Trust are calculated after expenses.

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

     The common shares will be ready for delivery on or about       , 2005.

                             -----------------------

     You should read this prospectus, which contains important information about
the Trust, before deciding whether to invest in the common shares, and retain it
for future reference. A Statement of Additional Information, dated      , 2005,
containing additional information about the Trust, has been filed with the
Securities and Exchange Commission and is incorporated by reference in its
entirety into this prospectus. You can review the table of contents of the
Statement of Additional Information on page__ of this prospectus. You may
request a free copy of the Statement of Additional Information by calling (800)
882-0052 or by writing to the Trust, or obtain a copy (and other information
regarding the Trust) from the Securities and Exchange Commission's web site
(http://www.sec.gov). The Trust does not post a copy of the Statement of
Additional Information on its web site because the Trust's common shares are not
continuously offered, which means the Statement of Additional Information will
not be updated after completion of this offering and the information contained
in the Statement of Additional Information will become outdated. The Trust's
annual and semi-annual reports, when produced, will be available at the Trust's
web site (http://www.blackrock.com)

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

     Until       , 2005 (25 days after the commencement of this offering), all
dealers that buy, sell or trade the common shares, whether or not participating
in this offering, may be required to deliver a prospectus. This delivery
requirement is in addition to the dealers' obligation to deliver a prospectus
when acting as underwriters and with respect to their unsold allotments or
subscriptions.



<PAGE>


                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----

Privacy Principles of the Trust.............................................3
Prospectus Summary..........................................................4
Summary of Trust Expenses..................................................13
The Trust..................................................................14
Use of Proceeds............................................................14
The Trust's Investments....................................................14
Risks    ..................................................................18
How the Trust Manages Risk.................................................21
Management of the Trust....................................................22
Net Asset Value............................................................25
Distributions..............................................................25
Dividend Reinvestment Plan.................................................26
Description of Shares......................................................27
Anti-Takeover Provisions in the Agreement and Declaration of Trust.........31
Closed-End Trust Structure.................................................32
Repurchase of Common Shares................................................32
Tax Matters................................................................33
Underwriting...............................................................35
Custodian and Transfer Agent...............................................36
Legal Opinions.............................................................36
Table of Contents for the Statement of Additional Information..............37

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

                         PRIVACY PRINCIPLES OF THE TRUST

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

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

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



<PAGE>

                               PROSPECTUS SUMMARY


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

<TABLE>
<CAPTION>
<S>                                             <C>
The Trust...................................    BlackRock Municipal Advantage Income Trust is a newly
                                                organized, diversified, closed-end management  investment
                                                company. Throughout the prospectus, we  refer to BlackRock
                                                Municipal Advantage Income Trust simply as the "Trust" or
                                                as "we," "us" or "our."  See "The Trust."

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

Investment Objective........................    The Trust's investment objective is to provide current
                                                income exempt from regular Federal income tax.  The Trust
                                                cannot ensure that it will achieve its investment objective.

Investment Policies.........................    The Trust will invest primarily in municipal bonds,
                                                municipal securities and derivative instruments with
                                                exposure to such bonds and securities.  Such investments
                                                are expected to pay interest or income that is exempt from
                                                regular Federal income tax. The Trust will invest  in
                                                municipal bonds that, in the opinion of  BlackRock
                                                Advisors, Inc. ("BlackRock Advisors" or  the "Advisor") and
                                                BlackRock Financial  Management, Inc. ("BlackRock
                                                Financial  Management" or the "Sub-Advisor") are
                                                underrated  or undervalued. Underrated municipal bonds are
                                                those whose ratings do not, in the Advisor's or
                                                Sub-Advisor's opinion, reflect their true
                                                creditworthiness. Undervalued municipal bonds are  bonds
                                                that, in the Advisor's or Sub-Advisor's  opinion, are worth
                                                more than the value assigned  to them in the marketplace.

                                                Under normal market conditions, the Trust will invest at
                                                least 80% of its Managed Assets in municipal bonds,
                                                municipal securities and derivative instruments with
                                                exposure to such bonds and securities, that in each case
                                                are expected to pay interest or income that is exempt from
                                                regular Federal income tax, with at least 50% of its
                                                Managed Assets invested in municipal bonds that at the time
                                                of  investment are investment grade quality.  Investment
                                                grade quality bonds are bonds rated  within the four
                                                highest grades ("Baa" or "BBB" or  better by Moody's, S&P
                                                or Fitch) or bonds that  are unrated but judged to be of
                                                comparable quality by the Advisor or the Sub-Advisor. The
                                                Trust may invest up to 50% of its Managed Assets  in
                                                municipal bonds that at the time of investment are rated as
                                                low as "C" by Moody's, S&P or Fitch or bonds that are
                                                unrated but judged to be of comparable quality by the
                                                Advisor or the Sub-Advisor. Bonds of below investment grade
                                                quality are regarded as having predominately speculative
                                                characteristics with respect to the issuer's capacity to
                                                pay interest and repay principal, and are commonly referred
                                                to as "junk bonds."

                                                The Trust intends to invest primarily in long-term bonds
                                                and expects bonds in its portfolio to have a duration of
                                                           years or more under current market conditions.
                                                The Trust may invest up to 25% of its Managed Assets in
                                                residual interest municipal tender option bonds, which are
                                                derivative interests of municipal bonds. See "The Trust's
                                                Investments."

Special Tax Considerations..................    While exempt-interest dividends are excluded from gross
                                                income for Federal income tax purposes, they may be subject
                                                to the Federal alternative minimum tax in certain
                                                circumstances. Distributions of any capital gain or other
                                                taxable income will be taxable to shareholders. The Trust
                                                may not be a suitable investment for investors subject to
                                                the Federal alternative minimum tax or who would become
                                                subject to such tax by investing in the Trust. See "Tax
                                                Matters."

Investment Advisor..........................    BlackRock Advisors will be the Trust's investment advisor
                                                and BlackRock Advisors' affiliate, BlackRock Financial
                                                Management, will provide certain day-to-day investment
                                                management  services to the Trust. Throughout the
                                                prospectus, we sometimes refer to BlackRock Advisors and
                                                BlackRock Financial Management collectively as
                                                "BlackRock." BlackRock Advisors will receive an  annual
                                                fee, payable monthly, in a maximum amount  equal to
                                                % of the average weekly value of the Trust's Managed
                                                Assets. "Managed Assets" means  the total assets of the
                                                Trust (including any assets attributable to any preferred
                                                shares of beneficial interest ("Preferred Shares") that may
                                                be issued and outstanding) minus the sum of accrued
                                                liabilities (other than borrowings representing financial
                                                leverage).  Because the Trust has no present intention of
                                                issuing Preferred Shares or otherwise borrowing for
                                                investment purposes, "Managed Assets" will generally be
                                                equal to the Trust's net assets.  See "Management of the
                                                Trust."

Distributions...............................    Commencing with the Trust's initial dividend, the Trust
                                                intends to make regular monthly cash distributions of all
                                                or a portion of its investment company taxable income to
                                                common shareholders.  We expect to declare the initial
                                                monthly dividend on the Trust's common shares within
                                                approximately 45 days after completion of this offering and
                                                to pay that initial monthly dividend approximately 60 to 90
                                                days after completion of this offering.  The Trust will pay
                                                common shareholders annually at least 90% of its investment
                                                company taxable income.

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

Listing.....................................    The Trust anticipates that its common shares will be listed
                                                on the New York Stock Exchange under the symbol " ". See
                                                "Description of Shares--Common Shares."

Custodian and Transfer Agent................    State Street Bank and Trust Company will serve as the
                                                Trust's Custodian, and EquiServe Trust Company, N.A. will
                                                serve as the Trust's Transfer Agent. See "Custodian and
                                                Transfer Agent."

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

Special Risk Considerations.................    No Operating History.  The Trust is a newly organized,
                                                diversified, closed-end management investment company and
                                                has no operating history.

                                                Investment and Market Discount Risk. An investment in the
                                                Trust's common shares is subject to investment risk,
                                                including the possible loss of the entire amount that you
                                                invest. As with any stock, the price of the Trust's shares
                                                will fluctuate with market conditions and other factors. If
                                                shares are sold, the price received may be more or less than
                                                the original investment. Net asset value will be reduced
                                                immediately following the initial offering by the amount of
                                                the sales load and the amount of the offering expenses paid
                                                by the Trust. Common shares are designed for long-term
                                                investors and should not be treated as trading vehicles.
                                                Shares of closed-end management investment companies
                                                frequently trade at a discount from their net asset value.
                                                The Trust's shares may trade at a price that is less than
                                                the initial offering price. This risk may be greater for
                                                investors who sell their shares in a relatively short period
                                                of time after completion of the initial offering.

                                                Interest Rate Risk. Interest rate risk is the risk that
                                                bonds, and the Trust's assets, will decline in value because
                                                of changes in interest rates. Generally, municipal bonds
                                                will decrease in value when interest rates rise and increase
                                                in value when interest rates decline. This means that the
                                                net asset value of the common shares will fluctuate with
                                                interest rate changes and the corresponding changes in the
                                                value of the Trust's municipal bond holdings. The value of
                                                the longer-term bonds in which the Trust generally invests
                                                fluctuates more in response to changes in interest rates
                                                than does the value of shorter-term bonds. Because the Trust
                                                will invest primarily in long-term bonds, the net asset
                                                value and market price per share of the common shares will
                                                fluctuate more in response to changes in market interest
                                                rates than if the Trust invested primarily in shorter-term
                                                bonds. The Trust's investment in residual interest municipal
                                                tender option bonds and its possible use of leverage would
                                                tend to increase common share interest rate risk. See
                                                "Description of Shares."

                                                Credit Risk. Credit risk is the risk that an issuer of a
                                                municipal bond will become unable to meet its obligation to
                                                make interest and principal payments. In general, lower
                                                rated municipal bonds carry a greater degree of risk that
                                                the issuer will lose its ability to make interest and
                                                principal payments, which could have a negative impact on
                                                the Trust's net asset value or dividends. The Trust may
                                                invest up to 50% of its Managed Assets in municipal bonds
                                                that are rated as low as "C" by Moody's, S&P or Fitch or
                                                that are unrated but judged to be of comparable quality by
                                                BlackRock. Bonds of below investment grade quality ("Ba/BB"
                                                or below) are regarded as having predominately speculative
                                                characteristics with respect to the issuer's capacity to pay
                                                interest and repay principal, and these bonds are commonly
                                                referred to as "junk bonds." These securities are subject to
                                                a greater risk of default. The prices of these lower grade
                                                bonds are more sensitive to negative developments, such as a
                                                decline in the issuer's revenues or a general economic
                                                downturn, than are the prices of higher grade securities.
                                                Lower grade securities tend to be less liquid than
                                                investment grade securities. The market values of lower
                                                grade securities tend to be more volatile than investment
                                                grade securities.

                                                High Yield Risk. The Trust may invest up to 50% of its
                                                Managed Assets in securities that are below investment
                                                grade. Non-investment grade securities are commonly referred
                                                to as "junk bonds." Investing in high yield bonds involves
                                                additional risks, including credit risk. The value of high
                                                yield, lower quality bonds is affected by the
                                                creditworthiness of the issuers of the securities and by
                                                general economic and specific industry conditions. Issuers
                                                of high yield bonds are not as strong financially as those
                                                with higher credit ratings, so their bonds are usually
                                                considered speculative investments. These issuers are more
                                                vulnerable to financial setbacks and recession than more
                                                creditworthy issuers which may impair their ability to make
                                                interest and principal payments.

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

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

                                                Municipal Bond Market Risk. Investing in the municipal bond
                                                market involves certain risks. The amount of public
                                                information available about the municipal bonds in the
                                                Trust's portfolio is generally less than that for corporate
                                                equities or bonds, and the investment performance of the
                                                Trust may therefore be more dependent on the analytical
                                                abilities of BlackRock than would be a stock fund or taxable
                                                bond fund. The secondary market for municipal bonds,
                                                particularly the below investment grade bonds in which the
                                                Trust may invest, also tends to be less well-developed or
                                                liquid than many other securities markets, which may
                                                adversely affect the Trust's ability to sell its bonds at
                                                attractive prices.

                                                The ability of municipal issuers to make timely payments of
                                                interest and principal may be diminished in general economic
                                                downturns and as governmental cost burdens are reallocated
                                                among Federal, state and local governments. In addition,
                                                laws enacted in the future by Congress or state legislatures
                                                or referenda could extend the time for payment of principal
                                                and/or interest, or impose other constraints on enforcement
                                                of such obligations or on the ability of municipalities to
                                                levy taxes. Issuers of municipal bonds might seek protection
                                                under the bankruptcy laws. In the event of bankruptcy of
                                                such an issuer, the Trust could experience delays in
                                                collecting principal and interest and the Trust may not, in
                                                all circumstances, be able to collect all principal and
                                                interest to which it is entitled. To enforce its rights in
                                                the event of a default in the payment of interest or
                                                repayment of principal, or both, the Trust may take
                                                possession of and manage the assets securing the issuer's
                                                obligations on such securities, which may increase the
                                                Trust's operating expenses. Any income derived from the
                                                Trust's ownership or operation of such assets may not be
                                                tax-exempt.

                                                Revenue bonds issued by state or local agencies to finance
                                                the development of low-income, multi-family housing involve
                                                special risks in addition to those associated with municipal
                                                bonds generally, including that the underlying properties
                                                may not generate sufficient income to pay expenses and
                                                interest costs. Such bonds are generally non-recourse
                                                against the property owner, may be junior to the rights of
                                                others with an interest in the properties, may pay interest
                                                that changes based in part on the financial performance of
                                                the property, may be prepayable without penalty and may be
                                                used to finance the construction of housing developments
                                                which, until completed and rented, do not generate income to
                                                pay interest. Increases in interest rates payable on senior
                                                obligations may make it more difficult for issuers to meet
                                                payment obligations on subordinated bonds. The Trust will
                                                treat investments in tax-exempt preferred shares as
                                                investments in municipal bonds.

                                                Reinvestment Risk. Reinvestment risk is the risk that income
                                                from the Trust's bond portfolio will decline if and when the
                                                Trust invests the proceeds from matured, traded, prepaid or
                                                called bonds at market interest rates that are below the
                                                portfolio's current earnings rate. A decline in income could
                                                affect the common shares' market price or their overall
                                                returns.

                                                Inflation Risk. Inflation risk is the risk that the value of
                                                assets or income from investment will be worth less in the
                                                future as inflation decreases the value of money. As
                                                inflation increases, the real value of the common shares and
                                                distributions on those shares can decline. In addition,
                                                during any periods of rising inflation, short-term rates
                                                would likely increase, which would tend to further reduce
                                                returns on any residual interest municipal tender option
                                                bonds owned by the Trust and therefore reduce returns to the
                                                holders of common shares.

                                                Tender Option Bond Risk. Residual interest municipal tender
                                                option bonds are derivative municipal bond securities that
                                                have embedded in them the risk of leverage. An investment in
                                                these securities typically will involve greater risk than an
                                                investment in a fixed rate municipal bond.

                                                Distributions on the residual interests will bear an inverse
                                                relationship to short-term municipal bond interest rates.
                                                Distributions on the residual interests paid to the Trust
                                                will be reduced or, in the extreme, eliminated as short-term
                                                municipal interest rates rise and will increase when
                                                short-term municipal interest rates fall. The amount of such
                                                reduction or increase is a function, in part, of the amount
                                                of short-term floating rate interests sold by the issuer of
                                                these securities relative to the amount residual interests
                                                that it sells. The greater the amount of short-term floating
                                                rate interests sold relative to the residual interests, the
                                                more volatile the distributions on the residual interests
                                                will be. The value of a residual interest municipal tender
                                                option bond also is generally more volatile than that of a
                                                fixed rate municipal bond. In addition, the market for these
                                                residual interest may not be liquid, which increases the
                                                volatility of these derivative instruments and means that
                                                the Trust may not be able to sell them when it desires to do
                                                so.

                                                Residual interest municipal tender option bonds generally
                                                will underperform the market for fixed rate municipal bonds
                                                in a rising interest rate environment, but tend to
                                                outperform the market for fixed rate bonds when interest
                                                rates decline or remain relatively stable. Should short-term
                                                interest rates rise, the Trust's investment in residual
                                                interest municipal tender option bonds likely will adversely
                                                affect the Trust's net asset value per share and income and
                                                distributions to shareholders.

                                                While the Trust may from time to time consider reducing its
                                                investments in residual interest municipal tender option
                                                bonds either by selling them or purchasing the related
                                                floating rate interests and redeeming the municipal bonds
                                                out of the special purpose trust in an effort to mitigate
                                                volatility, there can be no assurance that the Trust will
                                                actually reduce its exposure to residual interest municipal
                                                tender option bonds in a timely manner. Changes in the
                                                future direction of interest rates are difficult to predict
                                                accurately. If the Trust were to reduce its holdings based
                                                on a prediction about future changes to interest rates, and
                                                that prediction turned out to be incorrect, the reduction in
                                                its holdings would likely operate to reduce the income
                                                and/or total returns to holders of common shares relative to
                                                the circumstance where the Trust had not reduced its
                                                exposure. The Trust may decide that this risk outweighs the
                                                likelihood of achieving the desired reduction to volatility
                                                in income and share price if the prediction were to turn out
                                                to be correct, and determine not to reduce its exposure to
                                                residual interest municipal tender option bonds as described
                                                above.

                                                To reduce the Trust's exposure to rising interest rates, the
                                                Trust may enter into interest rate swaps. Interest rate
                                                swaps are contracts exchanging an obligation to pay a
                                                floating rate approximating the rate on the floating rate
                                                trust certificates for an obligation to pay a fixed rate.
                                                Net swap payments received by the Trust, if any, will be
                                                taxable income, even though the investment being hedged pays
                                                tax-exempt interest. There is no certainty that prepayment
                                                will occur at the end of the swap or trust period or that
                                                the Trust will be able to acquire interest rate swaps at
                                                favorable prices, or at all, when its existing arrangements
                                                expire. If this occurs, the Trust would be fully exposed to
                                                the interest rate risks described above.

                                                To the extent that the Trust sells a residual interest or
                                                redeems the municipal bonds in a special purpose trust by
                                                purchasing a proportionate amount of floating rate interests
                                                issued by the special purpose trust, the Trust may elect to
                                                keep in place any related swap if it expects to use that
                                                swap in the future as a hedge with respect to another
                                                transaction. To the extent that the Trust does not terminate
                                                a swap in such circumstances, it may be exposed to interest
                                                rate risks under the swap, particularly if interest rates
                                                decline.

                                                Economic Sector and Geographic Risk. The Trust may invest
                                                25% or more of its Managed Assets in municipal obligations
                                                of issuers in the same state (or U.S. territory) or in
                                                municipal obligations in the same economic sector, including
                                                without limitation the following: lease rental obligations
                                                of state and local authorities; obligations dependent on
                                                annual appropriations by a state's legislature for payment;
                                                obligations of state and local housing finance authorities,
                                                municipal utilities systems or public housing authorities;
                                                obligations of hospitals or life care facilities; and
                                                industrial development or pollution control bonds issued for
                                                electrical utility systems, steel companies, paper companies
                                                or other purposes. This may make the Trust more susceptible
                                                to adverse economic, political or regulatory occurrences
                                                affecting a particular state or economic sector. For
                                                example, health care related issuers are susceptible to
                                                Medicare, Medicaid and other third party payor reimbursement
                                                policies, and national and state health care legislation. As
                                                concentration increases, so does the potential for
                                                fluctuation in the net asset value of the Trust's common
                                                shares.

                                                Market Disruption and Geopolitical Risk. The aftermath of
                                                the war in Iraq and the continuing occupation of Iraq,
                                                instability in the Middle East and terrorist attacks in the
                                                United States and around the world may have resulted in
                                                market volatility and may have long-term effects on the U.S.
                                                and worldwide financial markets and may cause further
                                                economic uncertainties in the United States and worldwide.
                                                The Trust does not know how long the securities markets will
                                                continue to be affected by these events and cannot predict
                                                the effects of the occupation or similar events in the
                                                future on the U.S. economy and securities markets. Given the
                                                risks described above, an investment in the common shares
                                                may not be appropriate for all investors. You should
                                                carefully consider your ability to assume these risks before
                                                making an investment in the Trust.

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

</TABLE>



<PAGE>


                            SUMMARY OF TRUST EXPENSES

     The following table shows Trust expenses as a percentage of net assets
attributable to Common Shares.
<TABLE>
<CAPTION>

Shareholder Transaction Expenses
<S>                                                                                                     <C>
         Sales Load Paid by You (as a percentage of offering price)..............................%
         Offering expenses borne by the Trust (as a percentage of offering price)................%      (1)
         Dividend Reinvestment Plan Fees.....................................................None       (2)

                                                                     Percentage of Net Assets Attributable
                                                                                to Common Shares
----------------------------------------------------------------------------------------- ------------ -----
Annual Expenses
         Management fee........................................................................%
         Other expenses........................................................................%       (3)
                                                                                                       -----
         Total annual expenses.................................................................%
                                                                                                       -----
</TABLE>


(1) The Trust will pay offering costs of the Trust (other than the sales load)
up to an aggregate of $    per share of the Trust's common shares sold in this
offering which may include a reimbursement of BlackRock Advisors' expenses
incurred in connection with this offering. BlackRock Advisors has agreed to pay
such offering costs of the Trust to the extent they exceed $   per share of the
Trust's common shares.

(2) You will be charged a $2.50 service charge and a brokerage commission of
$0.15 per share sold if you direct the Plan Agent (as defined below) to sell
your common shares held in a dividend reinvestment account.

(3) Certain of these expenses represent reimbursement at cost to BlackRock
Advisors for non-advisory services provided to the Trust by employees of
BlackRock Advisors. See "Management of the Trust--Investment Management
Agreement."


     BlackRock Advisors may pay certain qualifying underwriters a sales
incentive fee, structuring fee or, alternatively, additional compensation in
connection with the offering. BlackRock Advisors may also pay commissions to
employees of its affiliates that participate in the marketing of the Trust's
common shares. See "Underwriting."

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

     The following example illustrates the expenses (including the sales load of
$45) that you would pay on a $1,000 investment in common shares, assuming (1)
total net annual expenses of % of net assets attributable to common shares in
years 1 through 5, and (2) a 5% annual return:(1)

<TABLE>
<CAPTION>

                                                     1 Year        3 Years      5 Years        10 Years
<S>                                                     <C>           <C>          <C>             <C>
Total Expenses Incurred.....................            $             $            $               $
</TABLE>

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



<PAGE>

                                    THE TRUST

     The Trust is a newly organized, diversified, closed-end management
investment company registered under the Investment Company Act of 1940 (the
"Investment Company Act"). The Trust was organized as a Delaware statutory trust
on November 7, 2005, pursuant to an Agreement and Declaration of Trust governed
by the laws of the State of Delaware. The Trust has no operating history. The
Trust's principal office is located at 100 Bellevue Parkway, Wilmington,
Delaware 19809, and its telephone number is (800) 882-0052.

                                 USE OF PROCEEDS

     The net proceeds of the offering of common shares will be approximately $
       ($        if the Underwriters exercise the over-allotment option in full)
after payment of the estimated organization and offering costs. The Trust will
invest the net proceeds of the offering in accordance with the Trust's
investment objective and policies as stated below. We currently anticipate that
the Trust will be able to invest primarily in municipal bonds, municipal
securities and derivative instruments with exposure to such bonds and
securities, in each case that meet the Trust's investment objective and policies
within approximately three months after the completion of the offering. Such
investments are expected to pay interest or income that is exempt from regular
Federal income tax. Pending such investment, it is anticipated that the proceeds
will be invested in short-term, tax-exempt or taxable investment grade
securities.

                             THE TRUST'S INVESTMENTS

Investment Objective and Policies

     The Trust's investment objective is to provide current income exempt from
regular Federal income tax. Under normal market conditions, the Trust will
invest at least 80% of its Managed Assets in municipal bonds, municipal
securities and derivative instruments with exposure to such bonds and
securities, in each case that are expected to pay interest or income that is
exempt from regular Federal income tax, with at least 50% of its Managed Assets
invested in municipal bonds that at the time of investment are investment grade
quality. Investment grade quality means that such bonds are rated, at the time
of investment, within the four highest grades ("Baa" or "BBB" or better by
Moody's, S&P or Fitch) or are unrated but judged to be of comparable quality by
BlackRock. Municipal bonds rated "Baa" by Moody's are investment grade, but
Moody's considers municipal bonds rated "Baa" to have speculative
characteristics. Changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity for issuers of municipal bonds that are
rated "BBB" or "Baa" (or that have equivalent ratings) to make principal and
interest payments than is the case for issues of higher grade municipal bonds.

     The Trust may invest up to 50% of its Managed Assets in municipal bonds
that are rated, at the time of investment, as low as "C" by Moody's, S&P or
Fitch or that are unrated but judged to be of comparable quality by BlackRock.
Bonds of below investment grade quality ("Ba/BB" or below) are commonly referred
to as "junk bonds." Bonds of below investment grade quality are regarded as
having predominantly speculative characteristics with respect to the issuer's
capacity to pay interest and repay principal.

     These credit quality policies apply only at the time a security is
purchased, and the Trust is not required to dispose of a security if a rating
agency downgrades its assessment of the credit characteristics of a particular
issue. In determining whether to retain or sell a security that a rating agency
has downgraded, BlackRock may consider such factors as BlackRock's assessment of
the credit quality of the issuer of the security, the price at which the
security could be sold and the rating, if any, assigned to the security by other
rating agencies. Appendix A to the Statement of Additional Information contains
a general description of Moody's, S&P's and Fitch's ratings of municipal bonds.

     The Trust intends for its bond portfolio to consist primarily of long-term
bonds and expects bonds in its portfolio to have a duration of    years or more
under current market conditions.

     The Trust may invest up to 25% of its Managed Assets in residual interest
municipal tender option bonds, which are derivative interests of municipal
bonds. The Trust may also invest in securities of other open- or closed-end
investment companies that invest primarily in municipal bonds of the types in
which the Trust may invest directly and in tax-exempt preferred shares that pay
dividends exempt from regular Federal income tax. See "--Other Investment
Companies," "--Tax-Exempt Preferred Securities" and "--Initial Portfolio
Composition."

     The Trust will invest in municipal bonds that, in BlackRock's opinion, are
underrated or undervalued. Underrated municipal bonds are those whose ratings do
not, in BlackRock's opinion, reflect their true creditworthiness. Undervalued
municipal bonds are bonds that, in the opinion of BlackRock, are worth more than
the value assigned to them in the marketplace. BlackRock may at times believe
that bonds associated with a particular municipal market sector (for example,
but not limited to, electrical utilities), or issued by a particular municipal
issuer, are undervalued. BlackRock may purchase those bonds for the Trust's
portfolio because they represent a market sector or issuer that BlackRock
considers undervalued, even if the value of those particular bonds appears to be
consistent with the value of similar bonds. Municipal bonds of particular types
(for example, but not limited to, hospital bonds, industrial revenue bonds or
bonds issued by a particular municipal issuer) may be undervalued because there
is a temporary excess of supply in that market sector, or because of a general
decline in the market price of municipal bonds of the market sector for reasons
that do not apply to the particular municipal bonds that are considered
undervalued. The Trust's investment in underrated or undervalued municipal bonds
will be based on BlackRock's belief that their yield is higher than that
available on bonds bearing equivalent levels of interest rate risk, credit risk
and other forms of risk, and that their prices will ultimately rise, relative to
the market, to reflect their true value. Any capital appreciation realized by
the Trust will generally result in capital gains distributions subject to
Federal capital gains taxation.

     The Trust may purchase municipal bonds that are additionally secured by
insurance, bank credit agreements or escrow accounts. The credit quality of
companies which provide these credit enhancements will affect the value of those
securities. Although the insurance feature reduces certain financial risks, the
premiums for insurance and the higher market price paid for insured obligations
may reduce the Trust's income. Insurance generally will be obtained from
insurers with a claims-paying ability rated "Aaa" by Moody's or "AAA" by S&P or
Fitch. The insurance feature does not guarantee the market value of the insured
obligations or the net asset value of the common shares. The Trust may purchase
insured bonds and may purchase insurance for bonds in its portfolio.

     During temporary defensive periods, including the period during which the
net proceeds of this offering are being invested, and in order to keep the
Trust's cash fully invested, the Trust may invest up to 100% of its total assets
in liquid, short-term investments, including high quality, short-term securities
that may be either tax-exempt or taxable. The Trust may not achieve its
investment objective under these circumstances. The Trust intends to invest in
taxable short-term investments only if suitable tax-exempt short-term
investments are not available at reasonable prices and yields. If the Trust
invests in taxable short-term investments, a portion of your dividends would be
subject to regular Federal income tax.

     The Trust cannot change its investment objective without the approval of
the holders of a majority of the outstanding common shares. A "majority of the
outstanding" means (1) 67% or more of the shares present at a meeting, if the
holders of more than 50% of the shares are present or represented by proxy, or
(2) more than 50% of the shares, whichever is less.

Municipal Bonds

     Municipal bonds are either general obligation or revenue bonds and
typically are issued to finance public projects, such as roads or public
buildings, to pay general operating expenses or to refinance outstanding debt.
Municipal bonds may also be issued for private activities, such as housing,
medical and educational facility construction or for privately owned industrial
development and pollution control projects. General obligation bonds are backed
by the full faith and credit, or taxing authority, of the issuer and may be
repaid from any revenue source. Revenue bonds may be repaid only from the
revenues of a specific facility or source. The Trust also may purchase municipal
bonds that represent lease obligations. These carry special risks because the
issuer of the bonds may not be obligated to appropriate money annually to make
payments under the lease. In order to reduce this risk, the Trust will only
purchase municipal bonds representing lease obligations where BlackRock believes
the issuer has a strong incentive to continue making appropriations until
maturity.

     The municipal bonds in which the Trust will invest pay interest or income
that, in the opinion of bond counsel to the issuer, or on the basis of another
authority believed by BlackRock to be reliable, is exempt from regular Federal
income tax. BlackRock will not conduct its own analysis of the tax status of the
interest paid by municipal bonds held by the Trust. The Trust may also invest in
municipal bonds issued by United States Territories (such as Puerto Rico or
Guam) that are exempt from regular Federal income tax. In addition to the types
of municipal bonds described in the prospectus, the Trust may invest in other
securities that pay interest or income that is, or make other distributions that
are, exempt from regular Federal income tax and/or state and local personal
taxes, regardless of the technical structure of the issuer of the instrument.
The Trust treats all of such tax-exempt securities as municipal bonds.

     The yields on municipal bonds are dependent on a variety of factors,
including prevailing interest rates and the condition of the general money
market and the municipal bond market, the size of a particular offering, the
maturity of the obligation and the rating of the issue. The market value of
municipal bonds will vary with changes in interest rate levels and as a result
of changing evaluations of the ability of bond issuers to meet interest and
principal payments.

     The Trust will invest primarily in municipal bonds with long-term
maturities in order to maintain a duration of      or more years, but the
duration of obligations held by the Trust may be shortened, depending on market
conditions.

Tender Option Bonds

     The Trust may invest up to 25% of its Managed Assets in residual interest
municipal tender option bonds, which are derivative interests in municipal
bonds. The residual interest municipal tender option bonds in which the Trust
will invest pay interest or income that, in the opinion of counsel to the
issuer, or on the basis of another authority believed by BlackRock to be
reliable, is exempt from regular Federal income tax. BlackRock will not conduct
its own analysis of the tax status of the interest or income paid by residual
interest municipal tender option bonds held by the Trust. Although volatile,
these residual interests typically offer the potential for yields exceeding the
yields available on fixed rate municipal bonds with comparable credit quality,
coupon, call provisions and maturity. The Trust intends to invest in residual
interests for the purpose of increasing the Trust's economic leverage as a more
flexible alternative to the issuance of Preferred Shares.

     Residual interest municipal tender option bonds represent beneficial
interests in a special purpose trust formed by a third party sponsor for the
purpose of holding municipal bonds purchased from the Trust or from another
third party. The special purpose trust typically sells two classes of beneficial
interests: short-term floating rate interests, which are sold to third party
investors, and residual interests, which the Trust would purchase. The
short-term floating rate interests have first priority on the cash flow from the
municipal bonds. The Trust is paid the residual cash flow from the special
purpose trust. If the Trust is the initial seller of the municipal bonds to the
special purpose trust, it receives the proceeds from the sale of the floating
rate interests in the special purpose trust, less certain transaction costs.
These proceeds generally would be used by the Trust to purchase additional
municipal bonds or other investments permitted by the Trust's investment
policies. If the Trust ever purchases all or a portion of the short-term
floating rate securities sold by the special purpose trust, it may surrender
those short-term floating rate securities together with a proportionate amount
of residual interests to the trustee of the special purpose trust in exchange
for a proportionate amount of the municipal bonds owned by the special purpose
trust. In addition, all voting rights and decisions to be made with respect to
any other rights relating to the municipal bonds held in the special purpose
trust are passed through to the Trust, as the holder of the residual interests.
The Trust will recognize taxable capital gains (or losses) upon any sale of
municipal bonds to the special purpose trust. Although residual interest
municipal tender option bonds are derivative securities with economic leverage
embedded in them, they will not constitute senior securities of the Trust (and
will not be subject to the Trust's limitations on borrowings).

When-Issued and Forward Commitment Securities

     The Trust may buy and sell municipal bonds on a when-issued basis and may
purchase or sell municipal bonds on a "forward commitment" basis. When such
transactions are negotiated, the price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities takes place at a later date. This type of transaction may involve
an element of risk because no interest accrues on the bonds prior to settlement
and, because bonds are subject to market fluctuations, the value of the bonds at
the time of delivery may be less or more than cost. The Trust will designate on
its books and records cash or other liquid debt securities having a market value
at all times at least equal to the amount of the commitment.

Other Investment Companies

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

Tax-Exempt Preferred Securities

     The Trust may also invest up to 10% of its total assets in preferred
interests of other investment funds that pay dividends that are exempt from
regular Federal income tax. A portion of such dividends may be capital gain
distributions subject to Federal capital gains tax. Such funds in turn invest in
municipal bonds and other assets that generally pay interest or make
distributions that are exempt from regular Federal income tax, such as revenue
bonds issued by state or local agencies to fund the development of low-income,
multi-family housing. Investing in such tax-exempt preferred shares involves
many of the same issues as investing in other open- or closed-end investment
companies as discussed above. These investments also have additional risks,
including liquidity risk, the absence of regulation governing investment
practices, capital structure and leverage, affiliated transactions and other
matters, and concentration of investments in particular issuers or industries.

High Yield Securities

     The Trust may invest up to 50% of its Managed Assets in municipal bonds
that are below investment grade quality ("Ba/BB" or below) and that are rated,
at the time of investment, as low as "C" by Moody's, S&P or Fitch or that are
unrated but judged to be of comparable quality by BlackRock. Bonds of below
investment grade quality are commonly known as "junk bonds." Securities rated
below investment grade are judged to have speculative characteristics with
respect to their interest and principal payments. Such securities may face major
ongoing uncertainties or exposure to adverse business, financial or economic
conditions which could lead to inadequate capacity to meet timely interest and
principal payments.

     S&P typically applies the "C" rating to debt subordinated to senior debt
that has a currently identifiable vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. Bonds which are rated "C" by
Moody's are the lowest rated class of bonds, and issues so rated can be regarded
as having extremely poor prospects of ever attaining any real investment
standing. Fitch applies the "C" rating in circumstances where default is a real
possibility and the capacity for meeting financial commitments is solely reliant
upon sustained, favorable business or economic developments.

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

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

                                      RISKS

     The net asset value of the common shares will fluctuate with and be
affected by, among other things, interest rate risk, credit risk and
reinvestment risk, and an investment in common shares will be subject to market
discount risk, inflation risk and municipal bond market risk, each of which is
more fully described below.

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

     Investment and Market Discount Risk. An investment in the Trust's common
shares is subject to investment risk, including the possible loss of the entire
amount that you invest. As with any stock, the price of the Trust's shares will
fluctuate with market conditions and other factors. If shares are sold, the
price received may be more or less than the original investment. Net asset value
will be reduced immediately following the initial offering by the amount of the
sales load and the amount of the offering expenses paid by the Trust. Common
shares are designed for long-term investors and should not be treated as trading
vehicles. Shares of closed-end management investment companies frequently trade
at a discount from their net asset value. The Trust's shares may trade at a
price that is less than the initial offering price. This risk may be greater for
investors who sell their shares in a relatively short period of time after
completion of the initial offering.

     Interest Rate Risk. Interest rate risk is the risk that bonds, and the
Trust's assets, will decline in value because of changes in interest rates.
Generally, municipal bonds will decrease in value when interest rates rise and
increase in value when interest rates decline. This means that the net asset
value of the common shares will fluctuate with interest rate changes and the
corresponding changes in the value of the Trust's municipal bond holdings. The
value of the longer-term bonds in which the Trust generally invests fluctuates
more in response to changes in interest rates than does the value of
shorter-term bonds. Because the Trust will invest primarily in long-term bonds,
the net asset value and market price per share of the common shares will
fluctuate more in response to changes in market interest rates than if the Trust
invested primarily in shorter-term bonds. The Trust's investment in residual
interest municipal tender option bonds and its possible use of leverage would
tend to increase common share interest rate risk. See "Description of Shares."

     Credit Risk. Credit risk is the risk that an issuer of a municipal bond
will become unable to meet its obligation to make interest and principal
payments. In general, lower rated municipal bonds carry a greater degree of risk
that the issuer will lose its ability to make interest and principal payments,
which could have a negative impact on the Trust's net asset value or dividends.
The Trust may invest up to 50% of its Managed Assets in municipal bonds that are
rated "C" or below by Moody's, S&P or Fitch or that are unrated but judged to be
of comparable quality by BlackRock. Bonds of below investment grade quality
("Ba/BB" or below) are regarded as having predominately speculative
characteristics with respect to the issuer's capacity to pay interest and repay
principal, and these bonds are commonly referred to as "junk bonds." These
securities are subject to a greater risk of default. The prices of these lower
grade bonds are more sensitive to negative developments, such as a decline in
the issuer's revenues or a general economic downturn, than are the prices of
higher grade securities. Lower grade securities tend to be less liquid than
investment grade securities. The market values of lower grade securities tend to
be more volatile than investment grade securities.

     High Yield Risk. The Trust may invest up to 50% of its Managed Assets in
securities that are below investment grade. Non-investment grade securities are
commonly referred to as "junk bonds." Investing in high yield bonds involves
additional risks, including credit risk. The value of high yield, lower quality
bonds is affected by the creditworthiness of the issuers of the securities and
by general economic and specific industry conditions. Issuers of high yield
bonds are not as strong financially as those with higher credit ratings, so
their bonds are usually considered speculative investments. These issuers are
more vulnerable to financial setbacks and recession than more creditworthy
issuers which may impair their ability to make interest and principal payments.

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

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

     Municipal Bond Market Risk. Investing in the municipal bond market involves
certain risks. The amount of public information available about the municipal
bonds in the Trust's portfolio is generally less than that for corporate
equities or bonds, and the investment performance of the Trust may therefore be
more dependent on the analytical abilities of BlackRock than would be a stock
fund or taxable bond fund. The secondary market for municipal bonds,
particularly the below investment grade bonds in which the Trust may invest,
also tends to be less well-developed or liquid than many other securities
markets, which may adversely affect the Trust's ability to sell its bonds at
attractive prices.

     The ability of municipal issuers to make timely payments of interest and
principal may be diminished in general economic downturns and as governmental
cost burdens are reallocated among Federal, state and local governments. In
addition, laws enacted in the future by Congress or state legislatures or
referenda could extend the time for payment of principal and/or interest, or
impose other constraints on enforcement of such obligations or on the ability of
municipalities to levy taxes. Issuers of municipal bonds might seek protection
under the bankruptcy laws. In the event of bankruptcy of such an issuer, the
Trust could experience delays in collecting principal and interest and the Trust
may not, in all circumstances, be able to collect all principal and interest to
which it is entitled. To enforce its rights in the event of a default in the
payment of interest or repayment of principal, or both, the Trust may take
possession of and manage the assets securing the issuer's obligations on such
securities, which may increase the Trust's operating expenses. Any income
derived from the Trust's ownership or operation of such assets may not be
tax-exempt.

     Revenue bonds issued by state or local agencies to finance the development
of low-income, multi-family housing involve special risks in addition to those
associated with municipal bonds generally, including that the underlying
properties may not generate sufficient income to pay expenses and interest
costs. Such bonds are generally non-recourse against the property owner, may be
junior to the rights of others with an interest in the properties, may pay
interest that changes based in part on the financial performance of the
property, may be prepayable without penalty and may be used to finance the
construction of housing developments which, until completed and rented, do not
generate income to pay interest. Increases in interest rates payable on senior
obligations may make it more difficult for issuers to meet payment obligations
on subordinated bonds. The Trust will treat investments in tax-exempt preferred
shares as investments in municipal bonds.

     Reinvestment Risk. Reinvestment risk is the risk that income from the
Trust's bond portfolio will decline if and when the Trust invests the proceeds
from matured, traded, prepaid or called bonds at market interest rates that are
below the portfolio's current earnings rate. A decline in income could affect
the common shares' market price or their overall returns.

     Inflation Risk. Inflation risk is the risk that the value of assets or
income from investment will be worth less in the future as inflation decreases
the value of money. As inflation increases, the real value of the common shares
and distributions on those shares can decline. In addition, during any periods
of rising inflation, short-term rates would likely increase, which would tend to
further reduce returns on any residual interest municipal tender option bonds
owned by the Trust and therefore reduce returns to the holders of common shares.

     Tender Option Bond Risk. Residual interest municipal tender option bonds
are derivative municipal bond securities that have embedded in them the risk of
leverage. An investment in these securities typically will involve greater risk
than an investment in a fixed rate municipal bond.

     Distributions on the residual interests will bear an inverse relationship
to short-term municipal bond interest rates. Distributions on the residual
interests paid to the Trust will be reduced or, in the extreme, eliminated as
short-term municipal interest rates rise and will increase when short-term
municipal interest rates fall. The amount of such reduction or increase is a
function, in part, of the amount of short-term floating rate interests sold by
the issuer of these securities relative to the amount residual interests that it
sells The greater the amount of short-term floating rate interests sold relative
to the residual interests, the more volatile the distributions on the residual
interests will be. The value of a residual interest municipal tender option bond
also is generally more volatile than that of a fixed rate municipal bond. In
addition, the market for these residual interest may not be liquid, which
increases the volatility of these derivative instruments and means that the
Trust may not be able to sell them when it desires to do so.

     Residual interest municipal tender option bonds generally will underperform
the market for fixed rate municipal bonds in a rising interest rate environment,
but tend to outperform the market for fixed rate bonds when interest rates
decline or remain relatively stable. Should short-term interest rates rise, the
Trust's investment in residual interest municipal tender option bonds likely
will adversely affect the Trust's net asset value per share and income and
distributions to shareholders.

     While the Trust may from time to time consider reducing its investments in
residual interest municipal tender option bonds either by selling them or
purchasing the related floating rate interests and redeeming the municipal bonds
out of the special purpose trust in an effort to mitigate volatility, there can
be no assurance that the Trust will actually reduce its exposure to residual
interest municipal tender option bonds in a timely manner. Changes in the future
direction of interest rates are difficult to predict accurately. If the Trust
were to reduce its holdings based on a prediction about future changes to
interest rates, and that prediction turned out to be incorrect, the reduction in
its holdings would likely operate to reduce the income and/or total returns to
holders of common shares relative to the circumstance where the Trust had not
reduced its exposure. The Trust may decide that this risk outweighs the
likelihood of achieving the desired reduction to volatility in income and share
price if the prediction were to turn out to be correct, and determine not to
reduce its exposure to residual interest municipal tender option bonds as
described above.

     To reduce the Trust's exposure to rising interest rates, the Trust may
enter into interest rate swaps. Interest rate swaps are contracts exchanging an
obligation to pay a floating rate approximating the rate on the floating rate
trust certificates for an obligation to pay a fixed rate. Net swap payments
received by the Trust, if any, will be taxable income, even though the
investment being hedged pays tax-exempt interest. There is no certainty that
prepayment will occur at the end of the swap or trust period or that the Trust
will be able to acquire interest rate swaps at favorable prices, or at all, when
its existing arrangements expire. If this occurs, the Trust would be fully
exposed to the interest rate risks described above.

     To the extent that the Trust sells a residual interest or redeems the
municipal bonds in a special purpose trust by purchasing a proportionate amount
of floating rate interests issued by the special purpose trust, the Trust may
elect to keep in place any related swap if it expects to use that swap in the
future as a hedge with respect to another transaction. To the extent that the
Trust does not terminate a swap in such circumstances, it may be exposed to
interest rate risks under the swap, particularly if interest rates decline.

     Economic Sector and Geographic Risk. The Trust may invest 25% or more of
its Managed Assets in municipal obligations of issuers in the same state (or
U.S. territory) or in municipal obligations in the same economic sector,
including without limitation the following: lease rental obligations of state
and local authorities; obligations dependent on annual appropriations by a
state's legislature for payment; obligations of state and local housing finance
authorities, municipal utilities systems or public housing authorities;
obligations of hospitals or life care facilities; and industrial development or
pollution control bonds issued for electrical utility systems, steel companies,
paper companies or other purposes. This may make the Trust more susceptible to
adverse economic, political or regulatory occurrences affecting a particular
state or economic sector. For example, health care related issuers are
susceptible to Medicare, Medicaid and other third party payor reimbursement
policies, and national and state health care legislation. As concentration
increases, so does the potential for fluctuation in the net asset value of the
Trust's common shares.

     Market Disruption and Geopolitical Risk. The aftermath of the war in Iraq
and the continuing occupation of Iraq, instability in the Middle East and
terrorist attacks in the United States and around the world may have resulted in
market volatility and may have long-term effects on the U.S. and worldwide
financial markets and may cause further economic uncertainties in the United
States and worldwide. The Trust does not know how long the securities markets
will continue to be affected by these events and cannot predict the effects of
the occupation or similar events in the future on the U.S. economy and
securities markets. Given the risks described above, an investment in the common
shares may not be appropriate for all investors. You should carefully consider
your ability to assume these risks before making an investment in the Trust.

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

                           HOW THE TRUST MANAGES RISK

Investment Limitations

     The Trust has adopted certain investment limitations designed to limit
investment risk. These limitations are fundamental and may not be changed
without the approval of the holders of a majority of the outstanding common
shares and, if issued, Preferred Shares voting together as a single class, and
the approval of the holders of a majority of the Preferred Shares, if issued,
voting as a separate class. Among other restrictions, the Trust may not invest
more than 25% of its Managed Assets in securities of issuers in any one
industry, except that this limitation does not apply to municipal bonds backed
by the assets and revenues of governments or political subdivisions of
governments. In addition, with respect to 75% of its Managed Assets the Trust
may not invest more than 5% of the value of its Managed Assets in the securities
of any single issuer or purchase more than 10% of the outstanding voting
securities of any one issuer. See "Investment Objective and Policies" in the
Statement of Additional Information for a complete list of the fundamental and
non-fundamental investment policies of the Trust.

Quality of Investments

     Under normal market conditions, the Trust will invest at least 50% of its
Managed Assets in bonds of investment grade quality at the time of investment.
Investment grade quality means that such bonds are rated by national rating
agencies within the four highest grades ("Baa" or "BBB" or better by Moody's,
S&P or Fitch) or are unrated but judged to be of comparable quality by
BlackRock.

Limited Investment in Tender Option Bonds

     The Trust will not invest more than 25% of its Managed Assets in residual
interest municipal tender option bonds, measured at the time of investment.

Hedging Strategies

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

                             MANAGEMENT OF THE TRUST

Trustees and Officers

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

Investment Advisor and Sub-Advisor

     BlackRock Advisors acts as the Trust's investment advisor. BlackRock
Financial Management acts as the Trust's sub-advisor. BlackRock Advisors,
located at 100 Bellevue Parkway, Wilmington, Delaware 19809, and BlackRock
Financial Management, located at 40 East 52nd Street, New York, New York 10022,
are wholly owned subsidiaries of BlackRock, Inc., which is one of the largest
publicly traded investment management firms in the United States with
approximately $428 billion of assets under management as of September 30, 2005.
BlackRock manages assets on behalf of institutional and individual investors
worldwide through a variety of equity, fixed income, liquidity and alternative
investment products, including the BlackRock Funds(TM) and BlackRock Liquidity
Funds(TM). In addition, BlackRock provides risk management and investment system
services to institutional investors under the BlackRock Solutions(R) name.

     The BlackRock organization has over 17 years of experience managing
closed-end products and, as of September 30, 2005, advised a closed-end family
of 56 active funds with approximately $17.3 billion in assets. BlackRock has
$287 billion in fixed income assets under management as of September 30, 2005,
including $34 billion in municipal assets firm-wide. Clients are served from the
company's headquarters in New York City, as well as offices in Boston, Chicago,
Edinburgh, Hong Kong, San Francisco, Singapore, Sydney, Tokyo and Wilmington.
BlackRock, Inc. is a member of The PNC Financial Services Group, Inc. ("PNC"),
one of the largest diversified financial services organizations in the United
States, and is majority owned by PNC and by BlackRock employees.

     Investment Philosophy. BlackRock's investment decision-making process for
the municipal bond sector is subject to the same discipline, oversight and
investment philosophy that the firm applies to other sectors of the fixed income
market.

     BlackRock uses a relative value strategy that evaluates the trade-off
between risk and return to seek to achieve the Trust's investment objective of
generating current income exempt from regular Federal income tax. This strategy
is combined with disciplined risk control techniques and applied in sector,
sub-sector and individual security selection decisions. BlackRock's extensive
personnel and technology resources are the key drivers of the investment
philosophy.

     BlackRock's Municipal Bond Team. BlackRock uses a team approach in managing
municipal portfolios. BlackRock believes that this approach offers substantial
benefits over one that is dependent on the market wisdom or investment expertise
of only a few individuals.

     BlackRock's municipal bond team involved with the Trust includes three
portfolio managers with an average experience of 23 years and six credit
research analysts with an average experience of 15 years. Kevin M. Klingert,
senior portfolio manager and head of municipal bonds at BlackRock, leads the
team, a position he has held since joining BlackRock in 1991. A Managing
Director since 1996, Mr. Klingert was a Vice President from 1991 through 1993
and a Director in 1994 and 1995. Mr. Klingert has over 20 years of experience in
the municipal market. Prior to joining BlackRock in 1991, Mr. Klingert was an
Assistant Vice President at Merrill Lynch, Pierce, Fenner & Smith Incorporated,
which he joined in 1985. The portfolio management team also includes James
McGinley and F. Howard Downs. Mr. McGinley has been a portfolio manager and a
member of the Investment Strategy Group at BlackRock since 1999. Prior to
joining BlackRock in 1999, Mr. McGinley was Vice President of Municipal Trading
from 1996 to 1999 and Manager of the Municipal Strategy Group from 1995 to 1999
with Prudential Securities Incorporated. Mr. McGinley joined Prudential
Securities Incorporated in 1993 as an Associate in Municipal Research. F. Howard
Downs has been a portfolio manager since joining BlackRock in 1999. Prior to
joining BlackRock in 1999, Mr. Downs was a Vice President, Institutional
Salesman and Sales Manager from 1990 to 1999 at William E. Simon & Sons
Municipal Securities, Inc. Mr. Downs was one of the original employees of
William E. Simon & Sons Municipal Securities, Inc., founded in 1990, and was
responsible for sales of municipal bonds.

     As of September 30, 2005, BlackRock's municipal bond portfolio managers
were responsible for over 100 municipal bond portfolios and over $26 billion in
municipal bonds. Municipal mandates include the management of open- and
closed-end mutual funds, municipal-only separate accounts or municipal
allocations within larger institutional mandates. In addition, BlackRock manages
12 municipal liquidity accounts valued at approximately $7.8 billion. The team
currently manages 37 closed-end municipal funds with over $9.3 billion in assets
under management.

     BlackRock's Investment Process. BlackRock has in-depth expertise in the
fixed income market. BlackRock applies the same risk-controlled, active sector
rotation style to the management process for all of its fixed income portfolios.
BlackRock believes that it is unique in its integration of taxable and municipal
bond specialists. Both taxable and municipal bond portfolio managers share the
same trading floor and interact frequently for determining the firm's overall
investment strategy. This interaction allows each portfolio manager to access
the combined experience and expertise of the entire portfolio management group
at BlackRock.

     BlackRock's portfolio management process emphasizes research and analysis
of specific sectors and securities, not interest rate speculation. BlackRock
believes that market-timing strategies can be highly volatile and potentially
produce inconsistent results. Instead, BlackRock thinks that value over the
long-term is best achieved through a risk-controlled approach, focusing on
sector allocation, security selection and yield curve management.

     In the municipal market, BlackRock believes one of the most important
determinants of value is supply and demand. BlackRock's ability to monitor
investor flows and frequency and seasonality of issuance is helpful in
anticipating the supply and demand for sectors. BlackRock believes that the
breadth and expertise of its municipal bond team allow it to anticipate issuance
flows, forecast which sectors are likely to have the most supply and plan its
investment strategy accordingly.

     BlackRock also believes that over the long-term, intense credit analysis
will add incremental value and avoid significant relative performance
impairments. The municipal credit team is led by Susan C. Heide, Ph.D., who has
been, since 1999, Managing Director, Head of Municipal Credit Research. From
1995 to 1999, Dr. Heide was a Director and Head of Municipal Credit Research.
Dr. Heide specializes in the credit analysis of municipal securities and
supervises the team of municipal bond analysts that assists with the ongoing
surveillance of approximately $26 billion in municipal bonds managed by
BlackRock.

     Prior to joining BlackRock as a Vice President and Head of Municipal Credit
Research in 1993, Dr. Heide was Director of Research and a portfolio manager at
OFFITBANK. For eight years prior to this assignment (1984 to 1992), Dr. Heide
was with American Express Company's Investment Division where she was the Vice
President of Credit Research, responsible for assessing the creditworthiness of
$6 billion in municipal securities. Dr. Heide began her investment career in
1983 at Moody's Investors Service, Inc. where she was a municipal bond analyst.

     Dr. Heide initiated the Disclosure Task Force of the National Federation of
Municipal Analysts in 1988 and was co-chairperson of this committee from its
inception through the completion of the Disclosure Handbook for Municipal
Securities--1992 Update, published in January 1993. Dr. Heide has authored a
number of articles on municipal finance and edited The Handbook of Municipal
Bonds published in the fall of 1994. Dr. Heide was selected by the Bond Buyer as
a first team All-American Municipal Analyst in 1990 and was recognized in
subsequent years.

     Dr. Heide has spoken at numerous industry groups on various topics related
to municipal bonds, such as the institutional investors' perspective of
municipal credit. Dr. Heide earned a BA degree in history from Marlboro College
in 1967, and a PhD degree in American urban history from Boston University in
1984.

     BlackRock's approach to credit risk incorporates a combination of
sector-based, top-down macro-analysis of industry sectors to determine relative
weightings with a name-specific (issuer-specific), bottom-up detailed credit
analysis of issuers and structures. The sector-based approach focuses on
rotating into sectors that are undervalued and exiting sectors when fundamentals
or technicals become unattractive. The name-specific approach focuses on
identifying special opportunities where the market undervalues a credit, and
devoting concentrated resources to research the credit and monitor the position.
BlackRock's analytical process focuses on anticipating change in credit trends
before market recognition. Credit research is a critical, independent element of
BlackRock's municipal process.

Investment Management Agreements

     Pursuant to an investment management agreement between BlackRock Advisors
and the Trust, the Trust has agreed to pay for the investment advisory services
and facilities provided by BlackRock Advisors a fee payable monthly in arrears
at an annual rate equal to         % of the average weekly value of the Trust's
Managed Assets (the "Management Fee"). BlackRock Advisors will pay a
sub-advisory fee equal to % of the Management Fee to BlackRock Financial
Management for sub-advisory services pursuant to a sub-investment advisory
agreement between the Trust, BlackRock Advisors and BlackRock Financial
Management. Because the Trust has no present intention of issuing Preferred
Shares or otherwise borrowing for investment purposes, "Managed Assets" will
generally be equal to the Trust's net assets. However, if the Trust borrows for
investment purposes "Managed Assets" will mean the total assets of the Trust
minus the sum of the accrued liabilities (other than aggregate indebtedness
representing financial leverage). In addition, with the approval of the board of
trustees, including a majority of the independent trustees, a pro rata portion
of the salaries, bonuses, health insurance, retirement benefits and similar
employment costs for the time spent on Trust operations (other than the
provision of services required under the investment management agreement) of all
personnel employed by BlackRock Advisors who devote substantial time to Trust
operations may be reimbursed, at cost to BlackRock Advisors. BlackRock Advisors
currently anticipates that it may be reimbursed for employees that provide
pricing, secondary market support and compliance services to the Trust, subject
to the approval of the board of trustees, including a majority of the
independent trustees.

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

                                 NET ASSET VALUE

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

     The Trust values its investments primarily by using market quotations.
Short-term debt investments having a remaining maturity of 60 days or less when
purchased and debt investments originally purchased with maturities in excess of
60 days but which currently have maturities of 60 days or less may be valued at
cost adjusted for amortization of premiums and accretion of discounts. Any
investments and other assets for which such current market quotations are not
readily available are valued at fair value ("Fair Valued Assets") as determined
in good faith under procedures established by, and under the general supervision
and responsibility of, the Trust's board of trustees. The Advisor and/or
Sub-Advisor will submit its recommendations regarding the valuation and/or
valuation methodologies for Fair Value Assets to a valuation committee. The
valuation committee may accept, modify or reject any recommendations. The
pricing of all Fair Value Assets shall be subsequently reported to and ratified
by the Trust's board of trustees.

     When determining the price for a Fair Value Asset, the Advisor and/or
Sub-Advisor will seek to determine the price that the Trust might reasonably
expect to receive from the current sale of that asset in an arm's-length
transaction. Fair value determinations shall be based upon all available factors
that the Advisor and/or Sub-Advisor deem relevant.

                                  DISTRIBUTIONS

     Commencing with the Trust's initial dividend, the Trust intends to make
regular monthly cash distributions of all or a portion of its investment company
taxable income to common shareholders. It is expected that the initial monthly
dividend on shares of the Trust's common shares will be declared approximately
45 days and paid approximately 60 to 90 days after completion of this offering.
The Trust expects that all or a portion of any capital gain and other taxable
income will be distributed at least annually.

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

                           DIVIDEND REINVESTMENT PLAN

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

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

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

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

     In the event of a market discount on the payment date for any dividend, the
Plan Agent will have until the last business day before the next date on which
the common shares trade on an "ex-dividend" basis or 120 days after the payment
date for such dividend, whichever is sooner (the "last purchase date"), to
invest the dividend amount in common shares acquired in open-market purchases.
It is contemplated that the Trust will pay monthly dividends. Therefore, the
period during which open-market purchases can be made will exist only from the
payment date of each dividend through the date before the "ex-dividend" date of
the third month of the quarter. If, before the Plan Agent has completed its
open-market purchases, the market price of a common share exceeds the net asset
value per common share, the average per common share purchase price paid by the
Plan Agent may exceed the net asset value of the common shares, resulting in the
acquisition of fewer common shares than if the dividend had been paid in newly
issued common shares on the dividend payment date. Because of the foregoing
difficulty with respect to open market purchases, if the Plan Agent is unable to
invest the full dividend amount in open market purchases during the purchase
period or if the market discount shifts to a market premium during the purchase
period, the Plan Agent may cease making open-market purchases and may invest the
uninvested portion of the dividend amount in newly issued common shares at the
net asset value per common share at the close of business on the last purchase
date; provided that, if the net asset value per common share is less than 95% of
the market price per common share on the payment date, the dollar amount of the
dividend will be divided by 95% of the market price per common share on the
payment date.

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

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

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

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

     All correspondence concerning the Plan should be directed to the Plan Agent
at Equiserve Trust Company, N.A., 150 Royall Street, Canton, Massachusetts
02021; telephone:         .

                              DESCRIPTION OF SHARES

Common Shares

     The Trust is an unincorporated business trust organized under the laws of
Delaware pursuant to an Agreement and Declaration of Trust dated as of November
7, 2005. The Trust is authorized to issue an unlimited number of common shares
of beneficial interest, par value $.001 per share. Each common share has one
vote and, when issued and paid for in accordance with the terms of this
offering, will be fully paid and non-assessable, except that the trustees shall
have the power to cause shareholders to pay expenses of the Trust by setting off
charges due from shareholders from declared but unpaid dividends or
distributions owed the shareholders and/or by reducing the number of common
shares owned by each respective shareholder. If Preferred Shares were to be
outstanding, the holders of common shares would not be entitled to receive any
distributions from the Trust unless all accrued dividends on Preferred Shares
were paid, unless asset coverage (as defined in the Investment Company Act) with
respect to Preferred Shares would be at least 200% after giving effect to the
distributions and unless certain other requirements imposed by any rating
agencies rating the Preferred Shares were met. See "--Preferred Shares" below.
All common shares are equal as to dividends, assets and voting privileges and
have no conversion, preemptive or other subscription rights. The Trust will send
annual and semi-annual reports, including financial statements, to all holders
of its shares.

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

     The Trust anticipates that its common shares will be listed on the New York
Stock Exchange under the symbol " ." Net asset value will be reduced immediately
following the offering of common shares by the amount of the sales load and the
amount of the offering expenses paid by the Trust. See "Summary of Trust
Expenses."

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

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

Preferred Shares

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

     The Trust currently does not intend to issue Preferred Shares, but reserves
the right to do so. The Trust currently does not anticipate that it would issue
Preferred Shares, unless it no longer was able to or decided not to purchase
residual interest municipal tender option bonds. If the Trust were to issue
Preferred Shares, it anticipates that it would offer Preferred Shares
representing up to 38% of the Trust's capital immediately after the issuance of
the Preferred Shares. The Preferred Shares would have complete priority upon
distribution of assets over the common shares. The issuance of Preferred Shares
would leverage the common shares. Leverage would involve risks. If implemented,
the Trust's leveraging strategy may not be successful. Although the timing and
other terms of the offering of Preferred Shares and the terms of the Preferred
Shares would be determined by the Trust's board of trustees, the Trust expects
that it would invest the proceeds of the Preferred Shares offering in long-term
municipal bonds. The Preferred Shares would pay adjustable rate dividends based
on shorter-term interest rates, which would be redetermined periodically by an
auction process. The adjustment period for Preferred Share dividends could be as
short as one day or as long as a year or more. So long as the Trust's portfolio
is invested in securities that provide a higher rate of return than the dividend
rate of the Preferred Shares, after taking expenses into consideration, the
leverage would cause you to receive a higher current rate of income than if the
Trust were not leveraged.

     If the Trust were to issue Preferred Shares, changes in the value of the
Trust's bond portfolio, including bonds bought with the proceeds of the
Preferred Shares offering, would be borne entirely by the holders of common
shares. If there were a net decrease, or increase, in the value of the Trust's
investment portfolio, the leverage would decrease, or increase (as the case may
be), the net asset value per common share to a greater extent than if the Trust
were not leveraged. During periods in which the Trust were to use leverage, the
fees paid to BlackRock for advisory and sub-advisory services would be higher
than if the Trust did not use leverage because the fees paid would be calculated
on the basis of the Trust's Managed Assets, including the gross proceeds from
the issuance of Preferred Shares.

     For tax purposes, the Trust would be required to allocate tax-exempt
interest income, net capital gain and other taxable income, if any, between the
common shares and Preferred Shares in proportion to total dividends paid to each
class for the year in which or with respect to which the net capital gain or
other taxable income is paid. If net capital gain or other taxable income were
allocated to Preferred Shares, instead of solely tax-exempt income, the Trust
would likely have to pay higher total dividends to Preferred Shareholders or
make special payments to Preferred Shareholders to compensate them for the
increased tax liability. This would reduce the total amount of dividends paid to
the holders of common shares, but would increase the portion of the dividend
that is tax-exempt. If the increase in dividend payments or the special payments
to Preferred Shareholders were not entirely offset by a reduction in the tax
liability of, and an increase in the tax-exempt dividends received by, the
holders of common shares, the advantage of the Trust's leveraged structure to
holders of common shares would be reduced.

     Under the Investment Company Act, the Trust would not be permitted to issue
Preferred Shares unless immediately after such issuance the value of the Trust's
capital were at least 200% of the liquidation value of the outstanding Preferred
Shares (i.e., the liquidation value may not exceed 50% of the Trust's capital).
In addition, the Trust would not be permitted to declare any cash dividend or
other distribution on its common shares unless, at the time of such declaration,
the value of the Trust's capital were at least 200% of such liquidation value.
If Preferred Shares were to be issued, the Trust currently anticipates that it
would, to the extent possible, purchase or redeem Preferred Shares from time to
time to the extent necessary in order to maintain coverage of any Preferred
Shares of at least 200%. In addition, as a condition to obtaining ratings on the
Preferred Shares, the terms of any Preferred Shares that may be issued would be
expected to include asset coverage maintenance provisions which would require
the redemption of the Preferred Shares in the event of non-compliance by the
Trust and may also prohibit dividends and other distributions on the common
shares in such circumstances. The Trust may become subject to other guidelines
which are more limiting than its investment restrictions in order to obtain and
maintain ratings from Moody's, S&P or Fitch on the Preferred Shares that it
intends to issue. The Trust does not anticipate that such guidelines would have
a material adverse effect on the Trust's common shareholders or the Trust's
ability to achieve its investment objective. In order to meet redemption
requirements, the Trust may have to liquidate portfolio securities. Such
liquidations and redemptions would cause the Trust to incur related transaction
costs and could result in capital losses to the Trust. Prohibitions on dividends
and other distributions on the common shares could impair the Trust's ability to
qualify as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code").

     If the Trust were to issue Preferred Shares, it would be subject to certain
restrictions imposed by guidelines of one or more rating agencies that may issue
ratings for Preferred Shares issued by the Trust. These guidelines would be
expected to impose asset coverage or portfolio composition requirements that
would be more stringent than those imposed on the Trust by the Investment
Company Act. It is not anticipated that these covenants or guidelines would
impede BlackRock from managing the Trust's portfolio in accordance with the
Trust's investment objective and policies.

     The Trust may also borrow money as a temporary measure for extraordinary or
emergency purposes, including the payment of dividends and the settlement of
securities transactions which otherwise might require untimely dispositions of
Trust securities.

     Although the terms of any Preferred Shares, including dividend rate,
liquidation preference and redemption provisions, would be determined by the
board of trustees, subject to applicable law and the Agreement and Declaration
of Trust, it is likely that the Preferred Shares would be structured to carry a
relatively short-term dividend rate reflecting interest rates on short-term
tax-exempt debt securities, by providing for the periodic redetermination of the
dividend rate at relatively short intervals through an auction, remarketing or
other procedure. The Trust also believes that it is likely that the liquidation
preference, voting rights and redemption provisions of the Preferred Shares
would be similar to those stated below.

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

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

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

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

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

     If the Trust were to issue Preferred Shares, it is currently contemplated
that the Trust would apply for ratings for the Preferred Shares from Moody's
and/or S&P. In order to obtain and maintain the required ratings, the Trust
would be required to comply with investment quality, diversification and other
guidelines established by Moody's and/or S&P. Such guidelines would likely be
more restrictive than the restrictions set forth above. The Trust does not
anticipate that such guidelines would have a material adverse effect on the
Trust's holders of common shares or its ability to achieve its investment
objective. The Trust presently anticipates that any Preferred Shares that it may
issue would be initially given the highest ratings by Moody's ("Aaa") or by S&P
("AAA"), but no assurance can be given that such ratings will be obtained. No
minimum rating is required for the possible issuance of Preferred Shares by the
Trust. Moody's and S&P receive fees in connection with their ratings issuances.

       ANTI-TAKEOVER PROVISIONS IN THE AGREEMENT AND DECLARATION OF TRUST

     The Agreement and Declaration of Trust includes provisions that could have
the effect of limiting the ability of other entities or persons to acquire
control of the Trust or to change the composition of its board of trustees. This
could have the effect of depriving shareholders of an opportunity to sell their
shares at a premium over prevailing market prices by discouraging a third party
from seeking to obtain control over the Trust. Such attempts could have the
effect of increasing the expenses of the Trust and disrupting the normal
operation of the Trust. The board of trustees is divided into three classes,
with the terms of one class expiring at each annual meeting of shareholders. At
each annual meeting, one class of trustees is elected to a three-year term. This
provision could delay for up to two years the replacement of a majority of the
board of trustees. A trustee may be removed from office for cause only, and not
without cause, and only by the action of a majority of the remaining trustees
followed by a vote of the holders of at least 75% of the shares then entitled to
vote for the election of the respective trustee.

     In addition, the Trust's Agreement and Declaration of Trust requires the
favorable vote of a majority of the Trust's board of trustees followed by the
favorable vote of the holders of at least 75% of the outstanding shares of each
affected class or series of the Trust, voting separately as a class or series,
to approve, adopt or authorize certain transactions with 5% or greater holders
of a class or series of shares and their associates, unless the transaction has
been approved by at least 80% of the trustees, in which case "a majority of the
outstanding voting securities" (as defined in the Investment Company Act) of the
Trust shall be required. For purposes of these provisions, a 5% or greater
holder of a class or series of shares (a "Principal Shareholder") refers to any
person who, whether directly or indirectly and whether alone or together with
its affiliates and associates, beneficially owns 5% or more of the outstanding
shares of all outstanding classes or series of shares of beneficial interest of
the Trust.

     The 5% holder transactions subject to these special approval requirements
are: the merger or consolidation of the Trust or any subsidiary of the Trust
with or into any Principal Shareholder; the issuance of any securities of the
Trust to any Principal Shareholder for cash, except pursuant to any automatic
dividend reinvestment plan; the sale, lease or exchange of all or any
substantial part of the assets of the Trust to any Principal Shareholder, except
assets having an aggregate fair market value of less than 2% of the total assets
of the Trust, aggregating for the purpose of such computation all assets sold,
leased or exchanged in any series of similar transactions within a twelve-month
period; or the sale, lease or exchange to the Trust or any subsidiary of the
Trust, in exchange for securities of the Trust, of any assets of any Principal
Shareholder, except assets having an aggregate fair market value of less than 2%
of the total assets of the Trust, aggregating for purposes of such computation
all assets sold, leased or exchanged in any series of similar transactions
within a twelve-month period.

     To convert the Trust to an open-end investment company, the Trust's
Agreement and Declaration of Trust requires the favorable vote of a majority of
the board of the trustees followed by the favorable vote of the holders of at
least 75% of the outstanding shares of each affected class or series of shares
of the Trust, voting separately as a class or series, unless such amendment has
been approved by at least 80% of the trustees, in which case "a majority of the
outstanding voting securities" (as defined in the Investment Company Act) of the
Trust shall be required. The foregoing vote would satisfy a separate requirement
in the Investment Company Act that any conversion of the Trust to an open-end
investment company be approved by the shareholders. If approved in the foregoing
manner, we anticipate conversion of the Trust to an open-end investment company
might not occur until 90 days after the shareholders' meeting at which such
conversion was approved and would also require at least 10 days' prior notice to
all shareholders. Conversion of the Trust to an open-end investment company
would require the redemption of outstanding Preferred Shares, if any, which
could eliminate or alter the leveraged capital structure of the Trust with
respect to the common shares. Following any such conversion, it is possible that
certain of the Trust's investment policies and strategies would have to be
modified to assure sufficient portfolio liquidity. In the event of conversion,
the common shares would cease to be listed on the New York Stock Exchange or
other national securities exchanges or market systems. Shareholders of an
open-end investment company may require the company to redeem their shares at
any time, except in certain circumstances as authorized by or under the
Investment Company Act, at their net asset value, less such redemption charge,
if any, as might be in effect at the time of a redemption. The Trust expects to
pay all such redemption requests in cash, but reserves the right to pay
redemption requests in a combination of cash or securities. If such partial
payment in securities were made, investors may incur brokerage costs in
converting such securities to cash. If the Trust were converted to an open-end
fund, it is likely that new shares would be sold at net asset value plus a sales
load. The board of trustees believes, however, that the closed-end structure is
desirable in light of the Trust's investment objectives and policies. Therefore,
you should assume that it is not likely that the board of trustees would vote to
convert the Trust to an open-end fund.

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

     The Declaration of Trust also provides that the Trust may be liquidated
upon the approval of 80% of the trustees.

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

                           CLOSED-END TRUST STRUCTURE

     The Trust is a diversified, closed-end management investment company with
no operating history (commonly referred to as a closed-end fund). Closed-end
funds differ from open-end funds (which are generally referred to as mutual
funds) in that closed-end funds generally list their shares for trading on a
stock exchange and do not redeem their shares at the request of the shareholder.
This means that if you wish to sell your shares of a closed-end fund you must
trade them on the market like any other stock at the prevailing market price at
that time. In a mutual fund, if the shareholder wishes to sell shares of the
fund, the mutual fund will redeem or buy back the shares at "net asset value."
Also, mutual funds generally offer new shares on a continuous basis to new
investors, and closed-end funds generally do not. The continuous inflows and
outflows of assets in a mutual fund can make it difficult to manage a mutual
fund's investments. By comparison, closed-end funds are generally able to stay
more fully invested in securities that are consistent with their investment
objective, and also have greater flexibility to make certain types of
investments, and to use certain investment strategies, such as financial
leverage and investments in illiquid securities.

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

                           REPURCHASE OF COMMON SHARES

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

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

                                   TAX MATTERS

     The discussion below and in the Statement of Additional Information
provides general tax information related to an investment in the common shares.
The discussion reflects applicable tax laws of the United States as of the date
of this prospectus, which tax laws may be changed or subject to new
interpretations by the courts or the Internal Revenue Service retroactively or
prospectively. Because tax laws are complex and often change, you should consult
your tax advisor about the tax consequences of an investment in the Trust.

     The Trust primarily invests in municipal bonds the income of which is
exempt from regular Federal income tax. Consequently, the regular monthly
dividends you receive will generally be exempt from regular Federal income tax.
A portion of these dividends, however, may be subject to the Federal alternative
minimum tax.

     Although the Trust does not seek to realize taxable income or capital
gains, the Trust may realize and distribute taxable income or capital gains from
time to time as a result of the Trust's normal investment activities. The Trust
will distribute at least annually any taxable income or realized capital gains.
Distributions of net short-term gains are taxable as ordinary income.
Distributions of net long-term capital gains are taxable to you as long-term
capital gains regardless of how long you have owned your common shares.
Dividends will not qualify for a dividends received deduction generally
available to corporate shareholders.

     Each year, you will receive a year-end statement designating the amounts of
tax-exempt dividends, capital gain dividends and ordinary income dividends paid
to you during the preceding year, including the source of investment income by
state and the portion of income that is subject to the Federal alternative
minimum tax. You will receive this statement from the firm where you purchased
your common shares if you hold your investment in street name; the Trust will
send you this statement if you hold your shares in registered form.

     The tax status of your dividends is not affected by whether you reinvest
your dividends or receive them in cash.

     In order to avoid corporate taxation of its taxable income and be permitted
to pay tax-exempt dividends, the Trust must elect to be treated as a regulated
investment company under Subchapter M of the Code and meet certain requirements
that govern the Trust's sources of income, diversification of assets and
distribution of earnings to shareholders. The Trust intends to make such an
election and meet these requirements. If the Trust failed to do so, the Trust
would be required to pay corporate taxes on its taxable income and all the
distributions would be taxable as ordinary income to the extent of the Trust's
earnings and profits. In particular, in order for the Trust to pay tax-exempt
dividends, at least 50% of the value of the Trust's total assets must consist of
tax-exempt obligations on a quarterly basis. The Trust intends to meet this
requirement. If the Trust failed to do so, it would not be able to pay
tax-exempt dividends and your distributions attributable to interest received by
the Trust from any source would be taxable as ordinary income to the extent of
the Trust's earnings and profits.

     The Trust may be required to withhold taxes on certain of your dividends if
you have not provided the Trust with your correct taxpayer identification number
(if you are an individual, normally your Social Security number), or if you are
otherwise subject to back-up withholding. If you receive Social Security
benefits, you should be aware that tax-free income is taken into account in
calculating the amount of these benefits that may be subject to Federal income
tax. If you borrow money to buy Trust shares, you may not be permitted to deduct
the interest on that loan. Under Federal income tax rules, Trust shares may be
treated as having been bought with borrowed money even if the purchase of the
Trust shares cannot be traced directly to borrowed money. Holders are urged to
consult their own tax advisors regarding the impact of an investment in common
shares upon the deductibility of interest payable by the holder.

     If you are subject to the Federal alternative minimum tax, a portion of
your regular monthly dividends may be taxable.

State and Local Tax Matters

     The exemption from Federal income tax for exempt-interest dividends does
not necessarily result in exemption for such dividends under the income or other
tax laws of any state or local taxing authority. In some states, the portion of
any exempt-interest dividend that is derived from interest received by a
regulated investment company on its holdings of that state's securities and its
political subdivisions and instrumentalities is exempt from that state's income
tax. Therefore, the Trust will report annually to its shareholders the
percentage of interest income earned by the Trust during the preceding year on
tax-exempt obligations indicating, on a state-by-state basis, the source of such
income. Shareholders of the Trust are advised to consult with their own tax
advisors about state and local tax matters.

     Please refer to the Statement of Additional Information for more detailed
information. You are urged to consult your tax advisor.



<PAGE>


                                  UNDERWRITING

     Subject to the terms and conditions of a purchase agreement dated
, 2005, each Underwriter named below has severally agreed to purchase, and the
Trust has agreed to sell to such Underwriter the number of common shares set
forth opposite the name of such Underwriter.

                                                               Number of Common
               Underwriter                                          Shares
--------------------------------------------------------------------------------




================================================================================

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

     The underwriters propose to initially offer some of the common shares
directly to the public at the public offering price set forth on the cover page
of this prospectus and some of the common shares to certain dealers at the
public offering price less a concession not in excess of $. per share. The sales
load the Trust will pay of $ per share is equal to 4.5% of the initial offering
price. The underwriters may allow, and the dealers may reallow, a discount in
excess of $ per share on sales to other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.

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

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

     The expenses of the offering are estimated at $    and are payable by the
Trust. BlackRock has agreed to pay organizational expenses and offering costs of
the Trust (other than sales load) that exceed $     per share.

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

     Until the distribution of the common shares in complete, SEC rules may
limit underwriters and selling group members from bidding for and purchasing our
common shares. However, the representatives may engage in transactions that
stabilize the price of our common shares, such as bids or purchases to peg, fix
or maintain that price.

     If the underwriters create a short position in our common shares in
connection with the offering, i.e., if they sell more common shares than are
listed on the cover of this prospectus, the representatives may reduce that
short position by purchasing common shares in the open market. The
representatives may also elect to reduce any short position by exercising all or
part of the over-allotment option described above. Purchases of our common
shares to stabilize its price or to reduce a short position may cause the price
of our common shares to be higher than it might be in the absence of such
purchases.

     Neither we nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transaction
described above may have on the price of our common shares. In addition, neither
we nor any of the Underwriters make any representation that the representatives
will engage in these transactions or that these transactions, once commenced,
will not be discontinued without notice.

     The Trust has agreed not to offer or sell any additional common shares for
a period of 180 days after the date of the purchase agreement without the prior
written consent of the underwriters, except for: the sale of the common shares
to the underwriters pursuant to the purchase agreement and certain transactions
related to the Trust's dividend reinvestment plan.

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

             one of the Underwriters is an affiliate of BlackRock Advisors and
BlackRock Financial Management.

                          CUSTODIAN AND TRANSFER AGENT

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

                                 LEGAL OPINIONS

     Certain legal matters in connection with the common shares will be passed
upon for the Trust by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New
York and for the Underwriters by .



<PAGE>


                            Table of Contents for the
                       Statement of Additional Information

                                                                           Page
                                                                           ----
Use of Proceeds..........................................................   B-2
Investment Objective and Policies........................................   B-2
Investment Policies and Techniques.......................................   B-4
Other Investment Policies and Techniques.................................  B-10
Management of the Trust..................................................  B-13
Portfolio Transactions and Brokerage.....................................  B-21
Description of Shares....................................................  B-22
Repurchase of Common Shares..............................................  B-23
Tax Matters..............................................................  B-24
Experts..................................................................  B-28
Additional Information...................................................  B-28
Report of Independent Registered Public Accounting Firm..................   F-1
Financial Report.........................................................   F-2
APPENDIX A Ratings of Investments........................................   A-1
APPENDIX B General Characteristics and Risks of Strategic Transactions...   B-1
APPENDIX C Proxy Voting Procedures; Proxy Voting Policy..................   C-1





<PAGE>

================================================================================




                                              SHARES


                   BlackRock Municipal Advantage Income Trust


                                  Common Shares



                               P R O S P E C T U S

























                                                          , 2005









================================================================================

<PAGE>



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



                              Subject to Completion

                 Preliminary Statement of Additional Information

                             Dated November 17, 2005

                   BLACKROCK MUNICIPAL ADVANTAGE INCOME TRUST

                       STATEMENT OF ADDITIONAL INFORMATION

     BlackRock Municipal Advantage Income Trust (the "Trust") is a newly
organized, diversified, closed-end management investment company with no
operating history. This Statement of Additional Information relating to common
shares does not constitute a prospectus, but should be read in conjunction with
the prospectus relating thereto dated     , 2005. This Statement of Additional
Information, which is not a prospectus, does not include all information that a
prospective investor should consider before purchasing common shares, and
investors should obtain and read the prospectus prior to purchasing such shares.
A copy of the prospectus may be obtained without charge by calling (800)
882-0052. You may also obtain a copy of the prospectus on the Securities and
Exchange Commission's web site (http://www.sec.gov). Capitalized terms used but
not defined in this Statement of Additional Information have the meanings
ascribed to them in the prospectus.

                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

Use of Proceeds..........................................................  B-2
Investment Objective and Policies........................................  B-2
Investment Policies and Techniques.......................................  B-4
Other Investment Policies and Techniques................................. B-10
Management of the Trust.................................................. B-13
Portfolio Transactions and Brokerage..................................... B-21
Description of Shares.................................................... B-22
Repurchase of Common Shares.............................................. B-23
Tax Matters.............................................................. B-24
Experts.................................................................. B-28
Additional Information................................................... B-28
Report of Independent Registered Public Accounting Firm..................  F-1
Financial Report.........................................................  F-2
APPENDIX A Ratings of Investments........................................  A-1
APPENDIX B General Characteristics and Risks of Strategic Transactions...  B-1
APPENDIX C Proxy Voting Procedures; Proxy Voting Policy..................  C-1
Use of Proceeds..........................................................  B-2



            This Statement of Additional Information is dated , 2005.



<PAGE>


                                 USE OF PROCEEDS

     Pending investment in municipal bonds that meet the Trust's investment
objective and policies, the net proceeds of the offering will be invested in
high quality, short-term tax-exempt money market securities or in high quality
municipal bonds with relatively low volatility (such as pre-refunded and
intermediate-term bonds), to the extent such securities are available. If
necessary to invest fully the net proceeds of the offering immediately, the
Trust may also purchase, as temporary investments, short-term taxable
investments of the type described under "Investment Policies and Techniques--
Short-Term Taxable Fixed Income Securities," the income on which is subject to
regular Federal income tax, and securities of other open- or closed-end
investment companies that invest primarily in municipal bonds of the type in
which the Trust may invest directly.

                        INVESTMENT OBJECTIVE AND POLICIES

     The Trust has not established any limit on the percentage of its portfolio
that may be invested in municipal bonds subject to the alternative minimum tax
provisions of Federal tax law, and the Trust expects that a portion of the
income it produces will be includable in alternative minimum taxable income.
Common shares therefore would not ordinarily be a suitable investment for
investors who are subject to the Federal alternative minimum tax or who would
become subject to such tax by purchasing common shares. The suitability of an
investment in common shares will depend upon a comparison of the after-tax yield
likely to be provided from the Trust with that from comparable tax-exempt
investments not subject to the alternative minimum tax, and from comparable
fully taxable investments, in light of each such investor's tax position.
Special considerations apply to corporate investors. See "Tax Matters."

Investment Restrictions

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

         (1) invest 25% or more of the value of its Managed Assets in any one
     industry, provided that this limitation does not apply to municipal bonds
     other than those municipal bonds backed only by assets and revenues of
     non-governmental issuers;

         (2) with respect to 75% of its Managed Assets, invest more than 5% of
     the value of its Managed Assets in the securities of any single issuer or
     purchase more than 10% of the outstanding securities of any one issuer.

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

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

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

         (6) purchase or sell real estate or interests therein other than
     municipal bonds secured by real estate or interests therein, provided that
     the Trust may hold and sell any real estate acquired in connection with its
     investment in portfolio securities; or

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

     As a fundamental policy, under normal market conditions, the Trust will
invest at least 80% of its Managed Assets in municipal bonds, municipal
securities and derivative instruments with exposure to such bonds or securities,
in each case that are expected to pay interest or income that is exempt from
regular Federal income tax, with at least 50% of its Managed Assets invested in
municipal bonds that at the time of investment are investment grade quality.

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

     For purposes of applying the limitation set forth in subparagraph (1)
above, securities of the U.S. government, its agencies, or instrumentalities,
and securities backed by the credit of a governmental entity are not considered
to represent industries. However, obligations backed only by the assets and
revenues of non-governmental issuers may for this purpose be deemed to be issued
by such non-governmental issuers. Thus, the 25% limitation would apply to such
obligations. It is nonetheless possible that the Trust may invest more than 25%
of its Managed Assets in a broader economic sector of the market for municipal
obligations, such as revenue obligations of hospitals and other health care
facilities or electrical utility revenue obligations. The Trust reserves the
right to invest more than 25% of its Managed Assets in industrial development
bonds and private activity securities.

     For the purpose of applying the limitation set forth in subparagraph (1)
above, a non-governmental issuer shall be deemed the sole issuer of a security
when its assets and revenues are separate from other governmental entities and
its securities are backed only by its assets and revenues. Similarly, in the
case of a non-governmental issuer, such as an industrial corporation or a
privately owned or operated hospital, if the security is backed only by the
assets and revenues of the non-governmental issuer, then such non-governmental
issuer would be deemed to be the sole issuer. Where a security is also backed by
the enforceable obligation of a superior or unrelated governmental or other
entity (other than a bond insurer), it shall also be included in the computation
of securities owned that are issued by such governmental or other entity. Where
a security is guaranteed by a governmental entity or some other facility, such
as a bank guarantee or letter of credit, such a guarantee or letter of credit
would be considered a separate security and would be treated as an issue of such
government, other entity or bank. When a municipal bond is insured by bond
insurance, it shall not be considered a security that is issued or guaranteed by
the insurer; instead, the issuer of such municipal bond will be determined in
accordance with the principles set forth above. The foregoing restrictions do
not limit the percentage of the Trust's assets that may be invested in municipal
bonds insured by any given insurer.

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

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

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

         (2) purchase securities of open-end or closed-end investment companies
     except in compliance with the Investment Company Act or any exemptive
     relief obtained thereunder; or

         (3) purchase securities of companies for the purpose of exercising
     control.

     The restrictions and other limitations set forth above will apply only at
the time of purchase of securities and will not be considered violated unless an
excess or deficiency occurs or exists immediately after and as a result of the
acquisition of securities.

     In addition, to comply with Federal tax requirements for qualification as a
regulated investment company, the Trust's investments will be limited in a
manner such that at the close of each quarter of each taxable year, (a) no more
than 25% of the value of the Trust's total assets are invested (i) in the
securities (other than United States government securities or securities of
other regulated investment companies) of a single issuer or two or more issuers
controlled by the Trust and engaged in the same, similar or related trades or
businesses or (ii) in the securities of one or more "qualified publicly traded
partnerships" (as defined under Section 851(h) of the Code) and (b) with regard
to at least 50% of the Trust's total assets, no more than 5% of its total assets
are invested in the securities (other than United States Government securities
or securities of other regulated investment companies) of a single issuer and no
investment represents more than 10% of the outstanding voting securities of such
issuer. These tax-related limitations may be changed by the Trustees to the
extent appropriate in light of changes to applicable tax requirements.

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

                       INVESTMENT POLICIES AND TECHNIQUES

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

Portfolio Investments

     The Trust will invest primarily in a portfolio of investment grade
municipal bonds that are exempt from regular Federal income tax.

     Issuers of bonds of below investment grade quality ("Ba/BB" or below) are
regarded as having current capacity to make principal and interest payments but
are subject to business, financial or economic conditions which could adversely
affect such payment capacity. Municipal bonds rated "Baa" or "BBB" are
considered "investment grade" securities; municipal bonds rated "Baa" are
considered medium grade obligations which lack outstanding investment
characteristics and have speculative characteristics, while municipal bonds
rated "BBB" are regarded as having adequate capacity to pay principal and
interest. Municipal bonds rated "AAA" in which the Trust may invest may have
been so rated on the basis of the existence of insurance guaranteeing the timely
payment, when due, of all principal and interest. Municipal bonds rated below
investment grade quality are obligations of issuers that are considered
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal according to the terms of the obligation and, therefore,
carry greater investment risk, including the possibility of issuer default and
bankruptcy and increased market price volatility. Municipal bonds rated below
investment grade tend to be less marketable than higher-quality bonds because
the market for them is less broad. The market for unrated municipal bonds is
even narrower. During periods of thin trading in these markets, the spread
between bid and asked prices is likely to increase significantly and the Trust
may have greater difficulty selling its portfolio securities. The Trust will be
more dependent on BlackRock's research and analysis when investing in these
securities.

     A general description of Moody's, S&P's and Fitch's ratings of municipal
bonds is set forth in Appendix A hereto. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the municipal bonds they rate. It
should be emphasized, however, that ratings are general and are not absolute
standards of quality. Consequently, municipal bonds with the same maturity,
coupon and rating may have different yields while obligations of the same
maturity and coupon with different ratings may have the same yield.

     The Trust will primarily invest in municipal bonds with long-term
maturities in order to maintain a duration of       or more years, but the
duration may be shortened from time to time depending on market conditions. As a
result, the Trust's portfolio at any given time may include both long-term and
intermediate-term municipal bonds. Moreover, during temporary defensive periods
(e.g., times when, in BlackRock's opinion, temporary imbalances of supply and
demand or other temporary dislocations in the tax-exempt bond market adversely
affect the price at which long-term or intermediate-term municipal bonds are
available), and in order to keep cash on hand fully invested, including the
period during which the net proceeds of the offering are being invested, the
Trust may invest any percentage of its assets in short-term investments
including high quality, short-term securities which may be either tax-exempt or
taxable and securities of other open- or closed-end investment companies that
invest primarily in municipal bonds of the type in which the Trust may invest
directly. The Trust intends to invest in taxable short-term investments only in
the event that suitable tax-exempt temporary investments are not available at
reasonable prices and yields. Tax-exempt temporary investments include various
obligations issued by state and local governmental issuers, such as tax-exempt
notes (bond anticipation notes, tax anticipation notes and revenue anticipation
notes or other such municipal bonds maturing in three years or less from the
date of issuance) and municipal commercial paper. The Trust will invest only in
taxable temporary investments which are U.S. government securities or securities
rated within the highest grade by Moody's, S&P or Fitch, and which mature within
one year from the date of purchase or carry a variable or floating rate of
interest. Taxable temporary investments of the Trust may include certificates of
deposit issued by U.S. banks with assets of at least $1 billion, commercial
paper or corporate notes, bonds or debentures with a remaining maturity of one
year or less, or repurchase agreements. See "Other Investment Policies and
Techniques--Repurchase Agreements." To the extent the Trust invests in taxable
investments, the Trust will not at such times be in a position to achieve its
investment objective of tax-exempt income.

     The foregoing policies as to ratings of portfolio investments will apply
only at the time of the purchase of a security and the Trust will not be
required to dispose of securities in the event Moody's, S&P or Fitch downgrades
its assessment of the credit characteristics of a particular issuer.

     Also included within the general category of municipal bonds described in
the prospectus are participations in lease obligations or installment purchase
contract obligations (hereinafter collectively called "Municipal Lease
Obligations") of municipal authorities or entities. Although a Municipal Lease
Obligation does not constitute a general obligation of the municipality for
which the municipality's taxing power is pledged, a Municipal Lease Obligation
is ordinarily backed by the municipality's covenant to budget for, appropriate
and make the payments due under the Municipal Lease Obligation. However, certain
Municipal Lease Obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment purchase
payments in future years unless money is appropriated for such purpose on a
yearly basis. In the case of a "non-appropriation" lease, the Trust's ability to
recover under the lease in the event of non-appropriation or default will be
limited solely to the repossession of the leased property, without recourse to
the general credit of the lessee, and the disposition or re-leasing of the
property might prove difficult. In order to reduce this risk, the Trust will
only purchase Municipal Lease Obligations where BlackRock believes the issuer
has a strong incentive to continue making appropriations until maturity.

     Obligations of issuers of municipal bonds are subject to the provisions of
bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors, such as the Bankruptcy Reform Act of 1978. In addition, the
obligations of such issuers may become subject to the laws enacted in the future
by Congress, state legislatures or referenda extending the time for payment of
principal or interest, or both, or imposing other constraints upon enforcement
of such obligations or upon municipalities to levy taxes. There is also the
possibility that, as a result of legislation or other conditions, the power or
ability of any issuer to pay, when due, the principal of and interest on its
municipal bonds may be materially affected.

     In addition to the types of municipal bonds described in the prospectus,
the Trust may invest in other securities that pay interest or income that is, or
make other distributions that are, exempt from regular Federal income tax and/or
state and local personal taxes, regardless of the technical structure of the
issuer of the instrument. The Trust treats all such tax-exempt securities as
municipal bonds.

Short-Term Taxable Fixed Income Securities

     For temporary defensive purposes or to keep cash on hand fully invested,
the Trust may invest up to 100% of its total assets in cash equivalents and
short-term taxable fixed income securities, although the Trust intends to invest
in taxable short-term investments only in the event that suitable tax-exempt
short-term investments are not available at reasonable prices and yields.
Short-term taxable fixed income investments are defined to include, without
limitation, the following:

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

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

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

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

Short-Term Tax-Exempt Fixed Income Securities

     Short-term tax-exempt fixed income securities are securities that are
exempt from regular Federal income tax and mature within three years or less
from the date of issuance. Short-term tax-exempt fixed income securities are
defined to include, without limitation, the following:

     Bond Anticipation Notes ("BANs") are usually general obligations of state
and local governmental issuers which are sold to obtain interim financing for
projects that will eventually be funded through the sale of long-term debt
obligations or bonds. The ability of an issuer to meet its obligations on its
BANs is primarily dependent on the issuer's access to the long-term municipal
bond market and the likelihood that the proceeds of such bond sales will be used
to pay the principal and interest on the BANs.

     Tax Anticipation Notes ("TANs") are issued by state and local governments
to finance the current operations of such governments. Repayment is generally to
be derived from specific future tax revenues. TANs are usually general
obligations of the issuer. A weakness in an issuer's capacity to raise taxes due
to, among other things, a decline in its tax base or a rise in delinquencies
could adversely affect the issuer's ability to meet its obligations on
outstanding TANs.

     Revenue Anticipation Notes ("RANs") are issued by governments or
governmental bodies with the expectation that future revenues from a designated
source will be used to repay the notes. In general, they also constitute general
obligations of the issuer. A decline in the receipt of projected revenues, such
as anticipated revenues from another level of government, could adversely affect
an issuer's ability to meet its obligations on outstanding RANs. In addition,
the possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal and
interest on RANs.

     Construction Loan Notes are issued to provide construction financing for
specific projects. Frequently, these notes are redeemed with funds obtained from
the Federal Housing Administration.

     Bank Notes are notes issued by local government bodies and agencies as
those described above to commercial banks as evidence of borrowings. The
purposes for which the notes are issued are varied but they are frequently
issued to meet short-term working capital or capital-project needs. These notes
may have risks similar to the risks associated with TANs and RANs.

     Tax-Exempt Commercial Paper ("municipal paper") represents very short-term
unsecured, negotiable promissory notes, issued by states, municipalities and
their agencies. Payment of principal and interest on issues of municipal paper
may be made from various sources, to the extent the funds are available
therefrom. Maturities on municipal paper generally will be shorter than the
maturities of TANs, BANs or RANs. There is a limited secondary market for issues
of municipal paper.

     Certain municipal bonds may carry variable or floating rates of interest
whereby the rate of interest is not fixed but varies with changes in specified
market rates or indices, such as a bank prime rate or tax-exempt money market
indices.

     While the various types of notes described above as a group represent the
major portion of the tax-exempt note market, other types of notes are available
in the marketplace and the Trust may invest in such other types of notes to the
extent permitted under its investment objective, policies and limitations. Such
notes may be issued for different purposes and may be secured differently from
those mentioned above.

Strategic Transactions and Risk Management

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

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

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

     Futures Contracts and Options on Futures Contracts. In connection with its
Strategic Transactions and other risk management strategies, the Trust may also
enter into contracts for the purchase or sale for future delivery ("futures
contracts") of debt securities, aggregates of debt securities or indices or
prices thereof, other financial indices and U.S. government debt securities or
options on the above. The Trust will ordinarily engage in such transactions only
for bona fide hedging, risk management (including duration management) and other
portfolio management purposes. However, the Trust is also permitted to enter
into such transactions for non-hedging purposes to enhance income or gain, in
accordance with the rules and regulations of the CFTC, which currently provide
that no such transaction may be entered into if at such time more than 5% of the
Trust's net assets would be posted as initial margin and premiums with respect
to such non-hedging transactions.

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

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

     Municipal Market Data Rate Locks. The Trust may purchase and sell Municipal
Market Data Rate Locks ("MMD Rate Locks"). An MMD Rate Lock permits the Trust to
lock in a specified municipal interest rate for a portion of its portfolio to
preserve a return on a particular investment or a portion of its portfolio as a
duration management technique or to protect against any increase in the price of
securities to be purchased at a later date. The Trust will ordinarily use these
transactions as a hedge or for duration or risk management although it is
permitted to enter into them to enhance income or gain. An MMD Rate Lock is a
contract between the Trust and an MMD Rate Lock provider pursuant to which the
parties agree to make payments to each other on a notional amount, contingent
upon whether the Municipal Market Data AAA General Obligation Scale is above or
below a specified level on the expiration date of the contract. For example, if
the Trust buys an MMD Rate Lock and the Municipal Market Data AAA General
Obligation Scale is below the specified level on the expiration date, the
counterparty to the contract will make a payment to the Trust equal to the
specified level minus the actual level, multiplied by the notional amount of the
contract. If the Municipal Market Data AAA General Obligation Scale is above the
specified level on the expiration date, the Trust will make a payment to the
counterparty equal to the actual level minus the specified level, multiplied by
the notional amount of the contract. In entering into MMD Rate Locks, there is a
risk that municipal yields will move in the direction opposite of the direction
anticipated by the Trust. The Trust will not enter into MMD Rate Locks if, as a
result, more than 50% of its total assets would be required to cover its
potential obligations under its hedging and other investment transactions.

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

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

Short Sales

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

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

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

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

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

                    OTHER INVESTMENT POLICIES AND TECHNIQUES

Restricted and Illiquid Securities

     Certain of the Trust's investments may be illiquid. Illiquid securities are
subject to legal or contractual restrictions on disposition or lack an
established secondary trading market. The sale of restricted and illiquid
securities often requires more time and results in higher brokerage charges or
dealer discounts and other selling expenses than does the sale of securities
eligible for trading on national securities exchanges or in the over-the-counter
markets. Restricted securities may sell at a price lower than similar securities
that are not subject to restrictions on resale.

When-Issued And Forward Commitment Securities

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

Borrowing

     Although it has no present intention of doing so, the Trust reserves the
right to borrow funds to the extent permitted as described under the caption
"Investment Objective and Policies--Investment Restrictions." The proceeds of
borrowings may be used for any valid purpose including, without limitation,
liquidity, investments and repurchases of shares of the Trust. Borrowing is a
form of leverage and, in that respect, entails risks comparable to those
associated with the issuance of Preferred Shares.

Reverse Repurchase Agreements

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

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

Repurchase Agreements

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

Zero Coupons and Deferred Payment Obligations

     The Trust may invest in zero-coupon bonds, which are normally issued at a
significant discount from face value and do not provide for periodic interest
payments. Zero-coupon bonds may experience greater volatility in market value
than similar maturity debt obligations which provide for regular interest
payments. Additionally, current federal tax law requires the holder of certain
zero-coupon bonds to accrue income with respect to these securities prior to the
receipt of cash payments. To maintain its qualification as a regulated
investment company and to potentially avoid liability for federal income and
excise taxes, the Trust may be required to distribute income accrued with
respect to these securities and may have to dispose of Trust securities under
disadvantageous circumstances in order to generate cash to satisfy these
distribution requirements.

     The Trust may invest in Deferred Payment Securities. Deferred Payment
Securities are securities that remain Zero-Coupon Securities until a
predetermined date, at which time the stated coupon rate becomes effective and
interest becomes payable at regular intervals. Deferred Payment Securities are
subject to greater fluctuations in value and may have lesser liquidity in the
event of adverse market conditions than comparably rated securities paying cash
interest at regular interest payment periods.

Lending of Securities

     The Trust may lend its portfolio securities to banks or dealers which meet
the creditworthiness standards established by the board of trustees of the Trust
("Qualified Institutions"). By lending its portfolio securities, the Trust
attempts to increase its income through the receipt of interest on the loan. Any
gain or loss in the market price of the securities loaned that may occur during
the term of the loan will be for the account of the Trust. The Trust may lend
its portfolio securities so long as the terms and the structure of such loans
are not inconsistent with requirements of the Investment Company Act, which
currently require that (i) the borrower pledge and maintain with the Trust
collateral consisting of cash, a letter of credit issued by a domestic U.S.
bank, or securities issued or guaranteed by the U.S. government having a value
at all times not less than 100% of the value of the securities loaned, (ii) the
borrower add to such collateral whenever the price of the securities loaned
rises (i.e., the value of the loan is "marked to the market" on a daily basis),
(iii) the loan be made subject to termination by the Trust at any time and (iv)
the Trust receive reasonable interest on the loan (which may include the Trust's
investing any cash collateral in interest bearing short-term investments), any
distributions on the loaned securities and any increase in their market value.
The Trust will not lend portfolio securities if, as a result, the aggregate of
such loans exceeds 33 1/3% of the value of the Trust's total assets (including
such loans). Loan arrangements made by the Trust will comply with all other
applicable regulatory requirements, including the rules of the New York Stock
Exchange, which rules presently require the borrower, after notice, to redeliver
the securities within the normal settlement time of five business days. All
relevant facts and circumstances, including the creditworthiness of the
Qualified Institution, will be monitored by BlackRock, and will be considered in
making decisions with respect to lending securities, subject to review by the
Trust's board of trustees.

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

                             MANAGEMENT OF THE TRUST

Information Received by the Board

     In considering the Trust's investment management and sub-investment
advisory agreements, the board of trustees received information specifically
related to the approval of the investment management and sub-advisory agreements
including information regarding: (i) the team of investment advisory personnel
assigned to the Trust; (ii) the structure, expertise and finances of BlackRock
Advisors, BlackRock Financial Management and their parent companies; (iii) the
Trust's management fee and total operating expenses as compared to a peer group
of closed-end funds with similar investment policies and strategies selected by
Lipper, Inc.; (iv) BlackRock's profitability with respect to other funds in the
BlackRock family of closed-end funds; (v) BlackRock's overall profitability as
compared with available industry data; (vi) certain direct and indirect
"fallout" benefits to BlackRock from its relationship with the Trust; and (vii)
BlackRock's policies and procedures in respect of execution of portfolio
transactions. Periodically, the trustees, in connection with their duties as
trustees or directors of other funds in the BlackRock family of closed-end
funds, have received other information including general information regarding
BlackRock Advisors' management of relationships with service providers and
resources devoted to compliance with the such funds' investment objectives and
polices and other matters.

Matters Considered by the Board

     In considering the investment management and sub-investment advisory
agreements, the board of trustees, including the non-interested trustees, did
not identify any factor as all-important or all-controlling and instead
considered these factors collectively in light of all of the Trust's surrounding
circumstances. Matters considered by the board of trustees, including the
non-interested trustees in approving the investment management and sub-advisory
agreements included the following:

     Nature and Quality of Investment Advisory and Sub-Advisory Services. The
board of trustees, including the non-interested trustees, considered the nature
and quality of the services to be provided by BlackRock Advisors and BlackRock
Financial Management, respectively, to the Trust. In this connection the board
reviewed:

o        BlackRock's compliance record, including whether other funds advised or
         sub-advised by BlackRock Advisors or BlackRock Financial Management
         have operated within their investment objectives, policies and
         restrictions; and

o        the resources of BlackRock Advisors and BlackRock Financial Management
         and the size, education and experience of the Trust's portfolio
         management team and BlackRock Advisors' and BlackRock Financial
         Management's use of technology and their approach to recruiting,
         training and retaining portfolio managers and other research, advisory
         and management personnel.

     Nature and Quality of Other Services. The board of trustees, including the
non-interested trustees, considered the nature, quality, cost and extent of
administrative and shareholder services to be performed by BlackRock Advisors
under the investment management agreement. The board of trustees, including the
non-interested trustees, also considered the nature and extent of BlackRock
Advisors' supervision of third party service providers.

     Fees and Expenses. The board of trustees, including the non-interested
trustees, considered the Trust's management fee and expense ratio in comparison
to the management fee and expense ratios of peer groups of funds.

     The first peer group selected for the Trust was the       group. The peer
group         contained          closed-end funds (including the Trust).

     The peer group comparison was done within four sub-categories of fees and
expenses: (i) management fee before fee waivers; (ii) management fee after fee
waivers; (iii) total expenses before fee waivers; and (iv) total expenses after
fee waivers. Each comparison was done both with and without giving effect to
leverage for those funds in the peer group that use leverage, because leverage
increases the effective management fee and other expenses paid by the holders of
the common shares of a fund if the management fee or other expenses are payable
on total managed assets.

     When compared to funds in the peer group and after giving effect to
leverage, when ranked from lowest fee to highest fee, the Trust ranked as
follows within each of the four sub-categories of fees and expenses: (i)      ;
(ii)       ; (iii)         ; and (iv)         .

     When compared to funds in the peer group assuming no leverage was used by
any of the funds, when ranked from lowest fee to highest fee, the Trust ranked
as follows within each of the four sub-categories: (i)        ; (ii)         ;
(iii)         ; and (iv)       .

     Profitability. The board of trustees, including the independent trustees,
considered the level of BlackRock's profits in respect of the management of the
BlackRock closed-end funds. The board considered the potential for economies of
scale in connection with BlackRock Advisors' management of the BlackRock
closed-end funds. It also considered the profits realized from non-fund
businesses which may benefit from or be related to the Trust's business. The
board of trustees, including the independent trustees, also considered
BlackRock's profit margins in comparison with available industry data.

     Other Benefits. The board of trustees, including the non-interested
trustees, also considered the benefits to BlackRock associated with BlackRock
and its affiliates providing non-advisory services to the Trust, including
administrative services. The board of trustees, including the independent
trustees, considered the intangible benefits that accrue to BlackRock and its
affiliates by virtue of their relationship with the Trust, including potential
benefits accruing to BlackRock and its affiliates as a result of potentially
stronger relationships with members of the broker dealer community, increased
name recognition of BlackRock and its affiliates, enhanced sales of other
investment funds and products sponsored by BlackRock and its affiliates and
increased assets under management which may increase the benefits realized by
BlackRock from soft dollar arrangements with broker dealers. The board also
considered the unquantifiable nature of these potential benefits.

     Miscellaneous. During the board of trustees' deliberations in connection
with its approval of the management fee, the board of trustees was aware that
BlackRock Advisors intended to pay compensation, out of its own assets, to the
lead underwriter and to certain qualifying underwriters of the Trust's common
shares and to employees of BlackRock Advisors and its affiliates that
participate in the offering of the Trust's common shares, the anticipated
amounts of such compensation and the general nature of the services to be
rendered to BlackRock Advisors in consideration of such compensation. The board
of trustees also considered whether the management fee met applicable standards
in light of the services provided by BlackRock Advisors, without regard to
whether BlackRock Advisors ultimately pays any portion of the anticipated
compensation to the underwriters. The board of trustees considered the scale of
BlackRock's equity management operations and the potential for economies of
scale in the context of the Trust.

Conclusion

     Based on the information reviewed and discussions held with respect to each
of the foregoing items, the board of trustees, including a majority of the
non-interested trustees, approved in principle each of the investment advisory
agreement between BlackRock Advisors and the Trust and the sub-advisory
agreement among BlackRock Advisors, BlackRock Financial Management and the Trust
as in the best interests of shareholders of the Trust.

Investment Management Agreement and Sub-Investment Advisory Agreement

     The investment management agreement was approved by the sole common
shareholder of the Trust as of       , 2005. The investment management agreement
will continue in effect for a period of two years from its effective date, and
if not sooner terminated, will continue in effect for successive periods of 12
months thereafter, provided that each continuance is specifically approved at
least annually by both (1) the vote of a majority of the Trust's board of
trustees or the vote of a majority of the outstanding voting securities of the
Trust (as such term is defined in the Investment Company Act) and (2) by the
vote of a majority of the trustees who are not parties to the investment
management agreement or interested persons (as such term is defined in the
Investment Company Act) of any such party, cast in person at a meeting called
for the purpose of voting on such approval. The investment management agreement
may be terminated as a whole at any time by the Trust, without the payment of
any penalty, upon the vote of a majority of the Trust's board of trustees or a
majority of the outstanding voting securities of the Trust or by BlackRock
Advisors, on 60 days' written notice by either party to the other which can be
waived by the non-terminating party. The investment management agreement will
terminate automatically in the event of its assignment (as such term is defined
in the Investment Company Act and the rules thereunder).

     The sub-investment advisory agreement was approved by the sole common
shareholder of the Trust as of       , 2005. The sub-investment advisory
agreement will continue in effect for a period of two years from its effective
date, and if not sooner terminated, will continue in effect for successive
periods of 12 months thereafter, provided that each continuance is specifically
approved at least annually by both (1) the vote of a majority of the Trust's
board of trustees or the vote of a majority of the outstanding voting securities
of the Trust (as such term is defined in the Investment Company Act) and (2) by
the vote of a majority of the trustees who are not parties to the sub-investment
advisory agreement or interested persons (as such term is defined in the
Investment Company Act) of any such party, cast in person at a meeting called
for the purpose of voting on such approval. The sub-investment advisory
agreement may be terminated as a whole at any time by the Trust, without the
payment of any penalty, upon the vote of a majority of the Trust's board of
trustees or a majority of the outstanding voting securities of the Trust or by
BlackRock Financial Management, on 60 days' written notice by either party to
the other which can be waived by the non-terminating party. The sub-investment
advisory agreement will terminate automatically in the event of its assignment
(as such term is defined in the Investment Company Act and the rules
thereunder).

Trustees and Officers

     The officers of the Trust manage its day-to-day operations. The officers
are directly responsible to the Trust's board of trustees which sets broad
policies for the Trust and chooses its officers. Below is a list of the trustees
and officers of the Trust and their present positions and principal occupations
during the past five years. Trustees who are interested persons of the Trust (as
defined in the Investment Company Act) are denoted by an asterisk(*). Trustees
who are independent trustees (as defined in the Investment Company Act) (the
"Independent Trustees") are denoted without an asterisk. The business address of
the Trust, BlackRock Advisors and their board members and officers is 100
Bellevue Parkway, Wilmington, Delaware 19809, unless specified otherwise below.
The trustees listed below are either trustees or directors of other closed-end
funds in which BlackRock Advisors acts as investment advisor.

<TABLE>
<CAPTION>

                                                                   Principal Occupation During the
Name and Age                     Title                         Past Five Years and Other Affiliations
------------                     -----                         --------------------------------------
<S>                     <C>                      <C>
Anne F. Ackerley*       Sole Initial Trustee,    Managing Director of BlackRock, Inc. since 2000.  Formerly First
Age 43                  President, Chief         Vice President and Chief Operating Officer, Mergers and
                        Executive Officer and    Acquisition Group at Merrill Lynch & Co. from 1997 to 2000; First
                        Chief Financial Officer  Vice President and Chief Operating Officer, Public Finance Group
                                                 at Merrill Lynch & Co. from 1995 to 1997; First Vice President,
                                                 Emerging Markets Fixed Income Research at Merrill Lynch & Co.
                                                 prior thereto.

                                                Dollar Range of        Aggregate Dollar Range of Equity
                                                    Equity          Securities Overseen by Directors in the
                                               Securities in the                 Family in all
Name of Trustee                                    Trust(*)           Registered Investment Companies(*)
---------------                                    --------           ----------------------------------

</TABLE>









      The Trustees do not own shares in the Trust as the Trust has no operating
history.
      The fees and expenses of the Independent Trustees of the Trust are paid by
the Trust. The trustees who are members of the BlackRock organization receive no
compensation from the Trust. It is estimated that the Independent Trustees will
receive from the Trust the amounts set forth below for the Trust's calendar year
ending December 31, 2005, assuming the Trust will have been in existence for the
full calendar year.

<TABLE>
<CAPTION>

                                  Estimated Compensation        Total Compensation from the Trust and
Name of Board Member                  from the Trust            Fund Complex Paid to Board Members(1)
---------------------------  -------------------------------  --------------------------------------------
<S>                           <C>                             <C>
                              $                          (2)  $                                  (3)(4)(5)
                              $                          (2)  $                                     (4)(5)
                              $                          (2)  $                                     (4)(5)
                              $                          (2)  $                                     (4)(5)
                              $                          (2)  $                                        (4)
                              $                          (2)  $                                        (4)
                              $                          (2)  $                                        (4)
                              $                          (2)  $                                        (4)
</TABLE>

-------------

(1)   Estimates the total compensation to be earned by that person during the
      calendar year end December 31, 2005 from the closed-end funds advised by
      the Advisor (the "Fund Complex").
(2)   Of these amounts it is anticipated that Trustees           ,           ,
                ,             ,             ,             ,                  ,
      and         may defer $       , $        , $        , $       , $       ,
      $           , $              and $           , respectively, pursuant to
      the Fund Complex's deferred compensation plan in the calendar year ended
      December 31, 2005.
(3)               serves as "lead director" and Governance Committee Chairman
      for each board of trustees/directors in the Fund Complex. For his
      services as lead trustee/director, will be compensated in the amount of
      $ per annum by the Fund Complex.
(4)   Of this amount, Trustees        ,          ,          ,          ,
              ,          ,           and          are expected to defer $    , $
              , $        , $       , $       , $      , $        and $
      , respectively, pursuant to the Fund Complex's deferred compensation plan.
(5)   Includes compensation for service on the Audit Committee.         receives
      $       per annum for his service as Chairman of the Audit Committee and
      all Trustees on the Audit Committee receive $ base per annum for their
      service on the Audit Committee.

     Each Independent Trustee will receive an annual fee calculated as follows:
(i) $       from each fund/trust in the Fund Complex and (ii) $       for each
meeting of each board in the Fund Complex attended by such Independent Trustee.
The total annual aggregate compensation for each Independent Trustee is capped
at $       per annum, except that will receive an additional $       per annum
from the Fund Complex for acting as the lead trustee for each board of
trustees/directors in the Fund Complex plus an additional $       per annum for
his services as chairman of the Audit Committee. Messrs.       ,       ,
and       will receive an additional $       per annum from the Fund Complex for
their service on the Audit Committee of the Fund Complex. This additional
compensation to Messrs.       ,       ,       and       will be allocated among
the fund/trusts in the Fund Complex based on their relative net assets. In the
event that the $       cap is met with respect to an Independent Trustee, the
amount of the Independent Trustee's fee borne by each fund/trust in the Fund
Complex is reduced by reference to the net assets of the Trust relative to the
other funds/trusts in the Fund Complex. In addition, the attendance fees of each
Independent Trustee are reduced proportionately, based on each respective
fund's/trust's net assets, so that the aggregate per meeting fee for all
meetings of the boards of trustees/directors of the funds/trusts (excluding the
per annum Audit Committee fee) held on a single day does not exceed $       for
any Independent Trustee. Certain of the above fees paid to the Independent
Trustees will be subject to mandatory deferrals pursuant to the Fund Complex's
deferred compensation plan. The Independent Trustees have agreed that at least $
      of their $       base fee will be mandatory deferred pursuant to the Fund
Complex's deferred compensation plan. Also, members of the Audit Committee of
the Fund Complex will be required to defer all of the $       per annum fee they
will receive for their services on the Audit Committee pursuant to the Fund
Complex's deferred compensation plan. Under the deferred compensation plan,
deferred amounts earn a return for the Independent Trustees as though equivalent
dollar amounts had been invested in common shares of certain other funds/trusts
in the Fund Complex selected by the Independent Trustees. This has the same
economic effect for the Independent Trustees as if they had invested the
deferred amounts in such other funds/trusts. The deferred compensation plan is
not funded and obligations thereunder represent general unsecured claims against
the general assets of a fund/trust. A fund/trust may, however, elect to invest
in common shares of those funds/trusts selected by the Independent Trustee in
order to match its deferred compensation obligations.

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

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

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

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

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

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

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

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

     As the Trust is a closed-end investment company with no prior investment
operations, no meetings of the above committees have been held in the current
fiscal year, provided that the Governance Committee has acted by written consent
to form the Audit Committee which, in turn, met in connection with the
organization of the Trust to select the Trust's independent auditor.

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

Proxy Voting Policies

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

Codes of Ethics

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

Investment Advisor and Sub-Advisor

     BlackRock Advisors acts as the Trust's investment advisor. BlackRock
Financial Management acts as the Trust's sub-advisor. BlackRock Advisors,
located at 100 Bellevue Parkway, Wilmington, Delaware 19809, and BlackRock
Financial Management, located at 40 East 52nd Street, New York, New York 10022,
are wholly owned subsidiaries of BlackRock, Inc., which is one of the largest
publicly traded investment management firms in the United States with
approximately $427.8 billion of assets under management at September 30, 2005.
BlackRock manages assets on behalf of institutional and individual investors
worldwide through a variety of equity, fixed income, liquidity and alternative
investment products, including the BlackRock Funds(TM) and BlackRock Liquidity
Funds(TM). In addition, BlackRock provides risk management and investment system
services to institutional investors under the BlackRock Solutions(R) name.

     The BlackRock organization has over 17 years of experience managing
closed-end funds. At September 30, 2005, BlackRock advised a closed-end family
of 56 active funds with approximately $17.3 billion in assets. BlackRock has $39
billion in equity assets under management as of September 30, 2005, including
$12.1 billion in assets across 21 equity open-end funds. Clients are served from
the company's headquarters in New York City, as well as offices in Boston,
Chicago, Edinburgh, Hong Kong, San Francisco, Singapore, Sydney, Tokyo and
Wilmington. BlackRock, Inc. is a member of The PNC Financial Services Group,
Inc., one of the largest diversified financial services organizations in the
United States, and is majority owned by PNC and by BlackRock employees.

Portfolio Managers

     As of September 30, 2005, Kevin M. Klingert managed or was a member of the
management team for the following client accounts:
<TABLE>
<CAPTION>

---------------------------- ------------------ ------------------ --------------------- --------------------
                                                                    Number of Accounts
                                 Number of          Assets of          Subject to a       Assets Subject to
      Type of Account            Accounts           Accounts         Performance Fee      a Performance Fee
---------------------------- ------------------ ------------------ --------------------- --------------------
<S>                          <C>                <C>                <C>                   <C>
Registered Investment
Companies
---------------------------- ------------------ ------------------ --------------------- --------------------
Pooled Investment Vehicles
Other Than Registered
Investment Companies
---------------------------- ------------------ ------------------ --------------------- --------------------
Other Accounts
---------------------------- ------------------ ------------------ --------------------- --------------------

     As of September 30, 2005, James McGinley managed or was a member of the
management team for the following client accounts:

---------------------------- ------------------ ------------------ --------------------- --------------------
                                                                    Number of Accounts
                                 Number of          Assets of          Subject to a       Assets Subject to
      Type of Account            Accounts           Accounts         Performance Fee      a Performance Fee
---------------------------- ------------------ ------------------ --------------------- --------------------
Registered Investment
Companies
---------------------------- ------------------ ------------------ --------------------- --------------------
Pooled Investment Vehicles
Other Than Registered
Investment Companies
---------------------------- ------------------ ------------------ --------------------- --------------------
Other Accounts
---------------------------- ------------------ ------------------ --------------------- --------------------

     As of September 30, 2005, F. Howard Downs managed or was a member of the
management team for the following client accounts:

---------------------------- ------------------ ------------------ --------------------- --------------------
                                                                    Number of Accounts
                                 Number of          Assets of          Subject to a       Assets Subject to
      Type of Account            Accounts           Accounts         Performance Fee      a Performance Fee
---------------------------- ------------------ ------------------ --------------------- --------------------
Registered Investment
Companies
---------------------------- ------------------ ------------------ --------------------- --------------------
Pooled Investment Vehicles
Other Than Registered
Investment Companies
---------------------------- ------------------ ------------------ --------------------- --------------------
Other Accounts
---------------------------- ------------------ ------------------ --------------------- --------------------
</TABLE>

     BlackRock Advisors has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to protect
against potential incentives that may favor one account over another. BlackRock
Advisors has adopted policies and procedures that address the allocation of
investment opportunities, execution of portfolio transactions, personal trading
by employees and other potential conflicts of interest that are designed to
ensure that all client accounts are treated equitably over time. Nevertheless,
BlackRock Advisors furnishes investment management and advisory services to
numerous clients in addition to the Trust, and BlackRock Advisors may,
consistent with applicable law, make investment recommendations to other clients
or accounts (including accounts which are hedge funds or have performance or
higher fees paid to BlackRock, or in which portfolio managers have a personal
interest in the receipt of such fees), which may be the same as or different
from those made to the Trust. In addition, BlackRock Advisors, its affiliates
and any officer, director, stockholder or employee may or may not have an
interest in the securities whose purchase and sale BlackRock Advisors recommends
to the Trust. Actions with respect to securities of the same kind may be the
same as or different from the action which BlackRock Advisors, or any of its
affiliates, or any officer, director, stockholder, employee or any member of
their families may take with respect to the same securities. Moreover, BlackRock
Advisors may refrain from rendering any advice or services concerning securities
of companies of which any of BlackRock Advisors' (or its affiliates') officers,
directors or employees are directors or officers, or companies as to which
BlackRock Advisors or any of its affiliates or the officers, directors and
employees of any of them has any substantial economic interest or possesses
material non-public information. In addition to its various policies and
procedures designed to address these issues, BlackRock Advisors includes
disclosure regarding these matters to its clients in both its Form ADV and
investment management agreements.

     Circumstances may arise under which BlackRock Advisors determines that,
while it would be both desirable and suitable that a particular security or
other investment be purchased or sold for the account of more than one of its
clients accounts, there is a limited supply of or demand for the security or
other investment. Under such circumstances, BlackRock Advisors will seek to
allocate the opportunity to purchase or sell that security or other investment
among those accounts on an equitable basis but shall not be required to assure
equality of treatment among all of its clients (including that the opportunity
to purchase or sell that security or other investment will be proportionally
allocated among those clients according to any particular or predetermined
standards or criteria). Where, because of prevailing market conditions, it is
not possible to obtain the same price or time of execution for all of the
securities or other investments purchased or sold for the Trust, BlackRock
Advisors may, consistent with its allocation procedures and applicable law,
average the various prices and charge or credit the Trust with the average
price. Each portfolio manager also may manage accounts, including hedge funds,
whose investment strategies may at times be opposed to the strategy utilized for
the Trust.

Portfolio Manager Compensation

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

     Base compensation. Generally, portfolio managers receive base compensation
based on their seniority and/or their position with the firm, which may include
the amount of assets supervised and other management roles within the firm.

     Discretionary compensation. In addition to base compensation, portfolio
managers may receive discretionary compensation, which can be a substantial
portion of total compensation. Discretionary compensation can include a
discretionary cash bonus as well as one or more of the following:

         Long-Term Retention and Incentive Plan (LTIP)--The LTIP is a long-term
         incentive plan that seeks to reward certain key employees. The plan
         provides for the grant of awards that are expressed as an amount of
         cash that, if properly vested and subject to the attainment of certain
         performance goals, will be settled in part in cash and in part in
         BlackRock, Inc. common stock. Messrs.           have received awards
         under the LTIP.

         Deferred Compensation Program--A portion of the compensation paid to
         each portfolio manager may be voluntarily deferred by the portfolio
         manager into an account that tracks the performance of certain of the
         firm's investment products. Each portfolio manager is permitted to
         allocate his deferred amounts among various options, including to
         certain of the firm's hedge funds and other unregistered products. In
         addition, a portion of the annual compensation of certain senior
         managers, including Messrs.      , is mandatorily deferred in a similar
         manner for a number of years.

         Options and Restricted Stock Awards--While incentive stock options are
         not presently being awarded to BlackRock employees, BlackRock, Inc.
         previously granted stock options to key employees, including certain
         portfolio managers who may still hold unexercised or unvested options.
         BlackRock, Inc. also has a restricted stock award program designed to
         reward certain key employees as an incentive to contribute to the
         long-term success of BlackRock. These awards vest over a period of
         years.

         Incentive Savings Plans--The PNC Financial Services Group, Inc., which
         owns approximately 71% of BlackRock, Inc.'s common stock, has created a
         variety of incentive savings plans in which BlackRock employees are
         eligible to participate, including an Employee Stock Purchase Plan
         (ESPP) and a 401(k) plan. The 401(k) plan may involve a company match
         of the employee's contribution of up to 6% of the employee's salary.
         The company match is made using BlackRock, Inc. common stock. The
         firm's 401(k) plan offers a range of investment options, including
         registered investment companies managed by the firm. Messrs.       are
         eligible to participate in these plans.

     Senior portfolio managers who perform additional management functions
within BlackRock may receive additional compensation in these other capacities.
Compensation is structured such that key professionals benefit from remaining
with the firm. BlackRock's basic compensation structure has been in place since
its inception.

Securities Ownership of Portfolio Managers

     The Trust is a newly organized investment company. Accordingly, as of the
date of this Statement of Additional Information, none of the portfolio managers
beneficially owns any securities issued by the Trust.


                      PORTFOLIO TRANSACTIONS AND BROKERAGE

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

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

     The Advisor and Sub-Advisor may, consistent with the interests of the
Trust, select brokers on the basis of the research, statistical and pricing
services they provide to the Trust and the Advisor's or Sub-Advisor's other
clients. Such research, statistical and/or pricing services must provide lawful
and appropriate assistance to the Advisor's or Sub-Advisor's investment decision
making process in order for such research, statistical and/or pricing services
to be considered by the Advisor or Sub-Advisor in selecting a broker. These
research services may include information on securities markets, the economy,
individual companies, pricing information, research products and services and
such other services as may be permitted from time to time by Section 28(e) of
the Securities Exchange Act of 1934. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to be
performed by the Advisor and Sub-Advisor under their respective contracts. A
commission paid to such brokers may be higher than that which another qualified
broker would have charged for effecting the same transaction, provided that the
Advisor or Sub-Advisor determines in good faith that such commission is
reasonable in terms either of the transaction or the overall responsibility of
the Advisor or Sub-Advisor and its other clients and that the total commissions
paid by the Trust will be reasonable in relation to the benefits to the Trust
over the long-term. The advisory fees that the Trust pay to the Advisor will not
be reduced as a consequence of the Advisor's or Sub-Advisor's receipt of
brokerage and research services. To the extent that portfolio transactions are
used to obtain such services, the brokerage commissions paid by the Trust will
exceed those that might otherwise be paid by an amount which cannot be presently
determined. Such services generally would be useful and of value to the Advisor
or Sub-Advisor in serving one or more of their other clients and, conversely,
such services obtained by the placement of brokerage business of other clients
generally would be useful to the Advisor and Sub-Advisor in carrying out their
obligations to the Trust. While such services are not expected to reduce the
expenses of the Advisor or Sub-Advisor, the Advisor would, through use of the
services, avoid the additional expenses which would be incurred if they should
attempt to develop comparable information through their own staffs. Commission
rates for brokerage transactions on foreign stock exchanges are generally fixed.

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

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

                              DESCRIPTION OF SHARES

Common Shares

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

Preferred Shares

     The Trust currently does not intend to issue Preferred Shares but reserves
the right to do so. The Trust currently does not anticipate that it would issue
Preferred Shares, unless it no longer was able to purchase residual interests in
tender option bond trusts. Although the terms of any Preferred Share issued by
the Trust, including their dividend rate, voting rights, liquidation preference
and redemption provisions, would, if issued, be determined by the board of
trustees (subject to applicable law and the Trust's Agreement and Declaration of
Trust) when it were to authorize a Preferred Shares offering, the Trust
currently expects that the preference on distributions, liquidation preference,
voting rights and redemption provisions of any such Preferred Shares would
likely be as stated in the prospectus.

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

Other Shares

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

                           REPURCHASE OF COMMON SHARES

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

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

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

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

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

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

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

                                   TAX MATTERS

     The following is a description of certain Federal income tax consequences
to a shareholder of acquiring, holding and disposing of common stock of the
Trust. The discussion reflects applicable tax laws of the United States as of
the date of this prospectus, which tax laws may be changed or subject to new
interpretations by the courts or the Internal Revenue Service retroactively or
prospectively.

     The Trust intends to elect to be treated and to qualify to be taxed as a
regulated investment company under Subchapter M of the Code, and to satisfy
conditions which will enable dividends on common shares or Preferred Shares
which are attributable to interest on tax-exempt municipal securities to be
exempt from Federal income tax in the hands of its shareholders, subject to the
possible application of the Federal alternative minimum tax.

     In order to qualify as a regulated investment company, the Trust must
satisfy certain requirements relating to the source of its income,
diversification of its assets, and distributions of its income to its
shareholders. First, the Trust must derive at least 90% of its annual gross
income (including tax-exempt interest) from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock
or securities or foreign currencies, other income (including but not limited to
gains from options, futures and forward contracts) derived with respect to its
business of investing in such stock, securities or currencies and interests in
"qualified publicly traded partnerships" (collectively, the "90% gross income
test"). Second, the Trust must diversify its holdings so that, at the close of
each quarter of its taxable year, (i) at least 50% of the value of its total
assets is comprised of cash, cash items, United States government securities,
securities of other regulated investment companies and other securities limited
in respect of any one issuer to an amount not greater in value than 5% of the
value of the Trust's total assets and to not more than 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of the
total assets is invested in the securities (other than United States government
securities and securities of other regulated investment companies) of (a) any
one issuer, (b) any or two or more issuers controlled by the Trust and engaged
in the same, similar or related trades or businesses or (c) any one or more
"qualified publicly traded partnerships."

     As a regulated investment company, the Trust will not be subject to Federal
income tax on income and gains that it distributes each taxable year to its
shareholders, provided that in such taxable year it distributes at least 90% of
the sum of (i) its "investment company taxable income" (which includes, among
other items, dividends, taxable interest, taxable original issue discount and
market discount income, income from securities lending, net short-term capital
gain in excess of net long-term capital loss, and any other taxable income other
than "net capital gain" (as defined below) and is reduced by deductible
expenses) determined without regard to the deduction for dividends paid and (ii)
its net tax-exempt interest (the excess of its gross tax-exempt interest income
over certain disallowed deductions). The Trust may retain for investment its net
capital gain (which consists of the excess of its net long-term capital gain
over its net short-term capital loss). However, if the Trust retains any net
capital gain or any investment company taxable income, it will be subject to tax
at regular corporate rates on the amount retained. If the Trust retains any net
capital gain, it may designate the retained amount as undistributed capital
gains in a notice to its shareholders who, if subject to Federal income tax on
long-term capital gains, (i) will be required to include in income for Federal
income tax purposes, as long-term capital gain, their share of such
undistributed amount and (ii) will be entitled to credit their proportionate
shares of the tax paid by the Trust against their Federal income tax
liabilities, if any, and to claim refunds to the extent the credit exceeds such
liabilities. For Federal income tax purposes, the tax basis of shares owned by a
shareholder of the Trust will be increased by the amount of undistributed
capital gains included in the gross income of the shareholder less the tax
deemed paid by the shareholder under clause (ii) of the preceding sentence. The
Trust intends to distribute at least annually to its shareholders all or
substantially all of its net tax-exempt interest and any investment company
taxable income and net capital gain.

     Treasury regulations permit a regulated investment company, in determining
its investment company taxable income and net capital gain, to elect (unless it
has made a taxable year election for excise tax purposes as discussed below) to
treat all or part of any net capital loss, any net long-term capital loss or any
net foreign currency loss incurred after October 31 as if it had been incurred
in the succeeding year.

     Distributions by the Trust of investment company taxable income, if any,
whether received in cash or additional shares, will be taxable to shareholders
as ordinary income (to the extent of the current or accumulated earning and
profits of the Trust) and generally will not qualify for the dividends received
deduction in the case of corporate shareholders. Net long-term capital gains
realized by the Trust and distributed to shareholders in cash or additional
shares will be taxable to shareholders as long-term capital gains regardless of
the length of time investors have owned shares of the Trust. Distributions by
the Trust that do not constitute ordinary income dividends, capital gain
distributions or exempt-interest dividends (as defined below) will be treated as
a return of capital to the extent of (and in reduction of) the shareholder's tax
basis in his or her shares. Any excess will be treated as gain from the sale of
his or her shares, as discussed below.

     If the Trust engages in hedging transactions involving financial futures
and options, these transactions will be subject to special tax rules, the effect
of which may be to accelerate income to the Trust, defer the Trust's losses,
cause adjustments in the holding periods of the Trust's securities, convert
long-term capital gains into short-term capital gains and convert short-term
capital losses into long-term capital losses. These rules could therefore affect
the amount, timing and character of distributions to holders of common shares.

     Prior to purchasing shares in the Trust, an investor should carefully
consider the impact of dividends which are expected to be or have been declared,
but not paid. Any dividend declared shortly after a purchase of such shares
prior to the record date will have the effect of reducing the per share net
asset value by the per share amount of the dividend.

     Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to holders of
common shares of record on a specified date in one of those months and paid
during the following January, will be treated as having been distributed by the
Trust (and received by the holder of common shares) on December 31.

     Federal income tax law imposes an alternative minimum tax with respect to
both corporations and individuals based on certain items of tax preference. To
the extent the Trust receives income treated as tax preference items for
purposes of the alternative minimum tax, a portion of the dividends paid by it,
although otherwise exempt from Federal income tax, will be taxable to holders of
common shares to the extent that their tax liability is determined under the
alternative minimum tax. The Trust will annually supply holders of common shares
with reports indicating the amount and nature of all income distributed to them
as well as the percentage of Trust income attributable to tax preference items
subject to the alternative minimum tax.

     The Trust intends to invest in sufficient tax-exempt municipal bonds to
permit payment of "exempt-interest dividends" (as defined in the Code). Except
as provided below, exempt-interest dividends paid to holders of common shares
are not includable in the holder's gross income for Federal income tax purposes.

     The Internal Revenue Service's position in a published revenue ruling
indicates that the Trust is required to designate distributions paid with
respect to its common shares and its Preferred Shares as consisting of a portion
of each type of income distributed by the Trust. The portion of each type of
income deemed received by the holders of each class of shares will be equal to
the portion of total Trust dividends received by such class. Thus, the Trust
will designate dividends paid as exempt-interest dividends in a manner that
allocates such dividends between the holders of the common shares and the
holders of Preferred Shares in proportion to the total dividends paid to each
such class during or with respect to the taxable year, or otherwise as required
by applicable law. Capital gain dividends and ordinary income dividends will
similarly be allocated between the two classes.

     Interest on certain "private activity bonds" is an item of tax preference
subject to the alternative minimum tax on individuals and corporations. The
Trust may invest a portion of its assets in municipal bonds subject to this
provision so that a portion of its exempt-interest dividends is an item of tax
preference to the extent such dividends represent interest received from these
private activity bonds. Accordingly, investment in the Trust could cause a
holder of common shares to be subject to, or result in an increased liability
under, the alternative minimum tax.

     Exempt-interest dividends are included in determining what portion, if any,
of a person's Social Security and railroad retirement benefits will be
includable in gross income subject to Federal income tax.

     Although exempt-interest dividends generally may be treated by holders of
common shares as items of interest excluded from their gross income, each holder
is advised to consult his tax advisor with respect to whether exempt-interest
dividends retain their exclusion if the shareholder would be treated as a
"substantial user," or a "related person" of a substantial user, of the
facilities financed with respect to any of the tax-exempt obligations held by
the Trust.

     For corporations, alternative minimum taxable income is increased by 75% of
the difference between an alternative measure of income ("adjusted current
earnings") and the amount otherwise determined to be the alternative minimum
taxable income. Interest on municipal bonds, and therefore all exempt-interest
dividends received from the Trust, are included in calculating adjusted current
earnings.

     The redemption, sale or exchange of common shares normally will result in
capital gain or loss to the holders of common shares who hold their shares as
capital assets. Generally, a shareholder's gain or loss will be long-term
capital gain or loss if the shares have been held for more than one year even
though the increase in value in such common shares is attributable to tax-exempt
interest income. In addition, gain realized by the Trust from the disposition of
a tax-exempt municipal obligation that is attributable to accrued market
discount will be treated as ordinary income rather than capital gain, and thus
may increase the amount of ordinary income dividends received by holders of
common shares. Present law taxes both long- and short-term capital gains of
corporations at the rates applicable to ordinary income. For non-corporate
taxpayers, however, long-term capital gains are currently taxed at a maximum
rate of 15%, while short-term capital gains and other ordinary income are
currently taxed at a maximum rate of 35%.

     All or a portion of a sales charge paid in purchasing common shares cannot
be taken into account for purposes of determining gain or loss on the
redemption, sale or exchange of such shares within 90 days after their purchase
to the extent common shares or shares of another fund are subsequently acquired
without payment of a sales charge pursuant to the reinvestment or exchange
privilege. Any disregarded portion of such charge will result in an increase in
the shareholder's tax basis in the shares subsequently acquired. In addition, no
loss will be allowed on the redemption, sale or exchange of common shares if the
shareholder purchases other common shares of the Trust (whether through
reinvestment of distributions or otherwise) or the shareholder acquires or
enters into a contract or option to acquire shares that are substantially
identical to common shares of the Trust within a period of 61 days beginning 30
days before and ending 30 days after such redemption, sale or exchange. If
disallowed, the loss will be reflected in an adjustment to the basis of the
shares acquired. Further, any losses realized on the redemption, sale or
exchange of common shares held for six months or less will be disallowed to the
extent of any exempt-interest dividends received with respect to such common
shares and, if not disallowed, such losses will be treated as long-term capital
losses to the extent of any capital gain dividends received (or amounts credited
as undistributed capital gains) with respect to such common shares.

     In order to avoid a 4% Federal excise tax, the Trust must distribute or be
deemed to have distributed by December 31 of each calendar year the sum of 98%
of its taxable ordinary income for such year, at least 98% of its capital gain
net income (the excess of its realized capital gains over its realized capital
losses, generally computed on the basis of the one-year period ending on October
31 of such year) and 100% of any taxable ordinary income and capital gain net
income for the prior year that was not distributed during such year and on which
the Trust paid no Federal income tax. For purposes of the excise tax, a
regulated investment company may reduce its capital gain net income (but not
below its net capital gain) by the amount of any net ordinary loss for the
calendar year. The Trust intends to make timely distributions in compliance with
these requirements and consequently it is anticipated that it generally will not
be required to pay the excise tax.

     If in any year the Trust should fail to qualify under Subchapter M for tax
treatment as a regulated investment company, the Trust would incur a regular
corporate Federal income tax upon its taxable income for that year, and
distributions to its shareholders would be taxable to shareholders as ordinary
dividend income for Federal income tax purposes to the extent of the Trust's
earnings and profits.

     The Trust is required to withhold tax at a rate of 28% on taxable dividends
and certain other payments paid to non-corporate shareholders who have not
furnished to the Trust their correct taxpayer identification number (in the case
of individuals, their Social Security number) and certain certifications, or who
are otherwise subject to backup withholding. Backup withholding is not an
additional tax and any amount withheld may be refunded or credited against the
shareholder's Federal income tax liability, provided the required information is
furnished to the Internal Revenue Service.

     The foregoing is a general and abbreviated summary of the provisions of the
Code and the Treasury Regulations presently in effect as they directly govern
the taxation of the Trust and its shareholders. For complete provisions,
reference should be made to the pertinent Code sections and Treasury
Regulations. The Code and the Treasury Regulations are subject to change by
legislative or administrative action, and any such change may be retroactive
with respect to Trust transactions. Holders of common shares are advised to
consult their own tax advisors for more detailed information concerning the
Federal income taxation of the Trust and the income tax consequences to its
holders of common shares.

     THE FOREGOING IS A GENERAL AND ABBREVIATED SUMMARY OF THE APPLICABLE
PROVISIONS OF THE CODE AND TREASURY REGULATIONS PRESENTLY IN EFFECT. FOR THE
COMPLETE PROVISIONS, REFERENCE SHOULD BE MADE TO THE PERTINENT CODE SECTIONS AND
THE TREASURY REGULATIONS PROMULGATED THEREUNDER. THE CODE AND THE U.S. TREASURY
REGULATIONS ARE SUBJECT TO CHANGE BY LEGISLATIVE, JUDICIAL OR ADMINISTRATIVE
ACTION, EITHER PROSPECTIVELY OR RETROACTIVELY. PERSONS CONSIDERING AN INVESTMENT
IN COMMON SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE PURCHASE,
OWNERSHIP AND DISPOSITION OF COMMON SHARES.

                                     EXPERTS

     The Statement of Net Assets of the Trust as of        , 2005 appearing in
this Statement of Additional Information has been audited by                  ,
independent auditors, as set forth in their report thereon appearing elsewhere
herein, and is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.        , located at        ,
provides accounting and auditing services to the Trust.

                             ADDITIONAL INFORMATION

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

<PAGE>


             Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholder of BlackRock Municipal Advantage
Income Trust:

     We have audited the accompanying statement of assets and liabilities of
BlackRock Municipal Advantage Income Trust (the "Trust") as of        , 2005 and
the related statements of operations and changes in net assets for the period
from        , 2005 (date of inception) to        , 2005. These financial
statements are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements based on our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BlackRock Municipal
Advantage Income Trust as of        , 2005, and the results of its operations
and the changes in its net assets for the period from        , 2005 (date of
inception) to        , 2005, in conformity with accounting principles generally
accepted in the United States of America.



<PAGE>


                   BLACKROCK MUNICIPAL ADVANTAGE INCOME TRUST
                       STATEMENT OF ASSETS AND LIABILITIES
                                          , 2005




<PAGE>



                   BLACKROCK MUNICIPAL ADVANTAGE INCOME TRUST
                             STATEMENT OF OPERATIONS
        For the period        , 2005 (date of inception) to -      , 2005




<PAGE>



                   BLACKROCK MUNICIPAL ADVANTAGE INCOME TRUST
                       STATEMENT OF CHANGES IN NET ASSETS
        For the period        , 2005 (date of inception) to        , 2005




<PAGE>


                          NOTES TO FINANCIAL STATEMENTS



<PAGE>

                                   APPENDIX A

Ratings of Investments

     Standard & Poor's Corporation--A brief description of the applicable
Standard & Poor's Corporation ("S&P") rating symbols and their meanings (as
published by S&P) follows:

     Long-Term Debt

     An S&P corporate or municipal debt rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers or
lessees.

     The debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.

     The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable. S&P does not perform
an audit in connection with any rating and may, on occasion, rely on unaudited
financial information. The ratings may be changed, suspended or withdrawn as a
result of changes in, or unavailability of, such information, or based on other
circumstances.

     The ratings are based, in varying degrees, on the following considerations:

     1.  Likelihood of default--capacity and willingness of the obligor as to
         the timely payment of interest and repayment of principal in accordance
         with the terms of the obligation;

     2.  Nature of and provisions of the obligation; and

     3.  Protection afforded by, and relative position of, the obligation in the
         event of bankruptcy, reorganization, or other arrangement under the
         laws of bankruptcy and other laws affecting creditors' rights.

     Investment Grade

AAA      Debt rated "AAA" has the highest rating assigned by S&P. Capacity to
         pay interest and repay principal is extremely strong.

AA       Debt rated "AA" has a very strong capacity to pay interest and repay
         principal and differs from the highest rated issues only in small
         degree.

A        Debt rated "A" has a strong capacity to pay interest and repay
         principal although it is somewhat more susceptible to the adverse
         effects of changes in circumstances and economic conditions than debt
         in higher rated categories.

BBB      Debt rated "BBB" is regarded as having an adequate capacity to pay
         interest and repay principal. Whereas it normally exhibits adequate
         protection parameters, adverse economic conditions or changing
         circumstances are more likely to lead to a weakened capacity to pay
         interest and repay principal for debt in this category than in higher
         rated categories.

     Speculative Grade Rating

     Debt rated "BB", "B", "CCC", "CC" and "C" is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. "BB" indicates the least degree of speculation and
"C" the highest. While such debt will likely have some quality and protective
characteristics these are outweighed by major uncertainties or major exposures
to adverse conditions.

BB       Debt rated "BB" has less near-term vulnerability to default than other
         speculative issues. However, it faces major ongoing uncertainties or
         exposure to adverse business, financial, or economic conditions which
         could lead to inadequate capacity to meet timely interest and principal
         payments. The "BB" rating category is also used for debt subordinated
         to senior debt that is assigned an actual or implied "BBB" rating.

B        Debt rated "B" has a greater vulnerability to default but currently has
         the capacity to meet interest payments and principal repayments.
         Adverse business, financial, or economic conditions will likely impair
         capacity or willingness to pay interest and repay principal. The "B"
         rating category is also used for debt subordinated to senior debt that
         is assigned an actual or implied "BB" or "BB" rating.

CCC      Debt rated "CCC" has a currently identifiable vulnerability to default,
         and is dependent upon favorable business, financial, and economic
         conditions to meet timely payment of interest and repayment of
         principal. In the event of adverse business, financial, or economic
         conditions, it is not likely to have the capacity to pay interest and
         repay principal.

         The "CCC" rating category is also used for debt subordinated to senior
         debt that is assigned an actual or implied "B" or "B" rating.

CC       The rating "CC" typically is applied to debt subordinated to senior
         debt that is assigned an actual or implied "CCC" debt rating.

C        The rating "C" typically is applied to debt subordinated to senior debt
         which is assigned an actual or implied "CCC" debt rating. The "C"
         rating may be used to cover a situation where a bankruptcy petition has
         been filed, but debt service payments are continued.

CI       The rating "CI" is reserved for income bonds on which no interest is
         being paid.

D        Debt rated "D" is in payment default. The "D" rating category is used
         when interest payments or principal payments are not made on the date
         due even if the applicable grace period has not expired, unless S&P
         believes that such payments will be made during such grace period. The
         "D" rating also will be used upon the filing of a bankruptcy petition
         if debt service payments are jeopardized.

     Plus (+) or Minus (--): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.

     Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project financed by the debt being rated and indicates that payment of debt
service requirements is largely or entirely dependent upon the successful and
timely completion of the project. This rating, however, while addressing credit
quality subsequent to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of, such completion. The
investor should exercise judgment with respect to such likelihood and risk.

L        The letter "L" indicates that the rating pertains to the principal
         amount of those bonds to the extent that the underlying deposit
         collateral is Federally insured by the Federal Savings & Loan Insurance
         Corporation or the Federal Deposit Insurance Corporation* and interest
         is adequately collateralized. In the case of certificates of deposit
         the letter "L" indicates that the deposit, combined with other deposits
         being held in the same right and capacity will be honored for principal
         and accrued pre-default interest up to the Federal insurance limits
         within 30 days after closing of the insured institution or, in the
         event that the deposit is assumed by a successor insured institution,
         upon maturity.

*        Continuance of the rating is contingent upon S&P's receipt of an
         executed copy of the escrow agreement or closing documentation
         confirming investments and cash flow.

NR       Indicates no rating has been requested, that there is insufficient
         information on which to base a rating, or that S&P does not rate a
         particular type of obligation as a matter of policy.

     Municipal Notes

     An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a note rating.
Notes maturing beyond 3 years will most likely receive a long-term debt rating.
The following criteria will be used in making that assessment:

         --Amortization schedule (the larger the final maturity relative to
         other maturities, the more likely it will be treated as a note).

         --Source of payment (the more dependent the issue is on the market for
         its refinancing, the more likely it will be treated as a note).

     Note rating symbols are as follows:

SP-1     Very strong or strong capacity to pay principal and interest. Those
         issues determined to possess overwhelming safety characteristics will
         be given a plus (+) designation.

SP-2     Satisfactory capacity to pay principal and interest.

SP-3     Speculative capacity to pay principal and interest.

     A note rating is not a recommendation to purchase, sell or hold a security
inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.
S&P does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in or unavailability of such
information or based on other circumstances.

     Commercial Paper

     An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.

     Ratings are graded into several categories, ranging from "A-1" for the
highest quality obligations to "D" for the lowest. These categories are as
follows:

A-1      This highest category indicates that the degree of safety regarding
         timely payment is strong. Those issues determined to possess extremely
         strong safety characteristics are denoted with a plus sign (+)
         designation.

A-2      Capacity for timely payment on issues with this designation is
         satisfactory. However, the relative degree of safety is not as high as
         for issues designated "A-1."

A-3      Issues carrying this designation have adequate capacity for timely
         payment. They are, however, somewhat more vulnerable to the adverse
         effects of changes in circumstances than obligations carrying the
         higher designations.

B        Issues rated "B" are regarded as having only speculative capacity for
         timely payment.

C        This rating is as signed to short-term debt obligations with a doubtful
         capacity for payment.

D        Debt rated "D" is in payment default. The "D" rating category is used
         when interest payments or principal Payments are not made on the date
         due, even if the applicable grace period has not expired, unless S&P
         believes that such payments will be made during such grace period.

     A commercial rating is not a recommendation to purchase, sell or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.
S&P does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in or unavailability of such
information or based on other circumstances.

     Moody's Investors Service, Inc.--A brief description of the applicable
Moody's Investors Service, Inc. ("Moody's") rating symbols and their meanings
(as published by Moody's) follows:

     Municipal Bonds

Aaa      Bonds which are rated Aaa are judged to be of the best quality. They
         carry the smallest degree of investment risk and are generally referred
         to as "gilt edge." Interest payments are protected by a large or by an
         exceptionally stable margin and principal is secure. While the various
         protective elements are likely to change, such changes as can be
         visualized are most unlikely to impair the fundamentally strong
         position of such issues.

Aa       Bonds which are rated Aa are judged to be of high quality by all
         standards. Together with the Aaa group they comprise what are generally
         known as high grade bonds. They are rated lower than the best bonds
         because margins of protection may not be as large as in Aaa securities
         or fluctuation of protective elements may be of greater amplitude or
         there may be other elements present which make the long-term risks
         appear somewhat larger than in Aaa securities.

A        Bonds which are rated A possess many favorable investment attributes
         and are to be considered as upper medium grade obligations. Factors
         giving security to principal and interest are considered adequate, but
         elements may be present which suggest a susceptibility to impairment
         sometime in the future.

Baa      Bonds which are rated Baa are considered as medium grade obligations,
         i.e., they are neither highly protected nor poorly secured. Interest
         payments and principal security appear adequate for the present but
         certain protective elements may be lacking or may be characteristically
         unreliable over any great length of time. Such bonds lack outstanding
         investment characteristics and in fact have speculative characteristics
         as well.

Ba       Bonds which are rated Ba are judged to have speculative elements; their
         future cannot be considered as well assured. Often the protection of
         interest and principal payments may be very moderate and thereby not
         well safeguarded during both good and bad times over the future.
         Uncertainty of position characterizes bonds in this class.

B        Bonds which are rated B generally lack characteristics of the desirable
         investment. Assurance of interest and principal payments or of
         maintenance of other terms of the contract over any long period of time
         may be small.

Caa      Bonds which are rated Caa are of poor standing. Such issues may be in
         default or there may be present elements of danger with respect to
         principal or interest.

Ca       Bonds which are rated Ca represent obligations which are speculative in
         a high degree. Such issues are often in default or have other marked
         shortcomings.

C        Bonds which are rated C are the lowest rated class of bonds, and issues
         so rated can be regarded as having extremely poor prospects of ever
         attaining any real investment standing.

Con(...) Bonds for which the security depends upon the completion of some
         act or the fulfillment of some condition are rated conditionally. These
         are bonds secured by (a) earnings of projects under construction, (b)
         earnings of projects unseasoned in operation experience, (c) rentals
         which begin when facilities are completed, or (d) payments to which
         some other limiting condition attaches. Parenthetical rating denotes
         probable credit stature upon completion of construction or elimination
         of basis of condition.

Note:    Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
         category from Aa to B in the public finance sectors. The modifier 1
         indicates that the issuer is in the higher end of its letter rating
         category; the modifier 2 indicates a mid-range ranking; the modifier 3
         indicates that the issuer is in the lower end of the letter ranking
         category.

     Short-Term Loans

MIG 1/VMIG 1      This designation denotes best quality. There is
                  present strong protection by established cash flows, superior
                  liquidity support or demonstrated broadbased access to the
                  market for refinancing.

MIG 2/VMIG 2      This designation denotes high quality. Margins of
                  protection are ample although not so large as in the preceding
                  group.

MIG 3/VMIG 3      This designation denotes favorable quality. All
                  security elements are accounted for but there is lacking the
                  undeniable strength of the preceding grades. Liquidity and
                  cash flow protection may be narrow and market access for
                  refinancing is likely to be less well-established.

MIG 4/VMIG 4      This designation denotes adequate quality. Protection
                  commonly regarded as required of an investment security is
                  present and although not distinctly or predominantly
                  speculative, there is specific risk.

S.G.              This designation denotes speculative quality. Debt instruments
                  in this category lack margins of protection.

     Commercial Paper

     Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:

     --Leading market positions in well-established industries.

     --High rates of return on funds employed.

     --Conservative capitalization structures with moderate reliance on debt and
ample asset protection.

     --Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

     --Well-established access to a range of financial markets and assured
sources of alternate liquidity.

     Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

     Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.

     Issuers rated Not Prime do not fall within any of the Prime rating
categories.

     Fitch IBCA, Inc.--A brief description of the applicable Fitch IBCA, Inc.
("Fitch") ratings symbols and meanings (as published by Fitch) follows:

     Long-Term Credit Ratings

     Investment Grade

AAA      Highest credit quality. "AAA" ratings denote the lowest expectation of
         credit risk. They are assigned only in case of exception ally strong
         capacity for timely payment of financial commitments. This capacity is
         highly unlikely to be adversely affected by foreseeable events.

AA       Very high credit quality. "AA" ratings denote a very low expectation of
         credit risk. They indicate very strong capacity for timely payment of
         financial commitments. This capacity is not significantly vulnerable to
         foreseeable events.

A        High credit quality. "A" ratings denote a low expectation of credit
         risk. The capacity for timely payment of financial commitments is
         considered strong. This capacity may, nevertheless, be more vulnerable
         to changes in circumstances or in economic conditions than is the case
         for higher ratings.

BBB      Good credit quality. "BBB" ratings indicate that there is currently a
         low expectation of credit risk. The capacity for timely payment of
         financial commitments is considered adequate, but adverse changes in
         circumstances and in economic conditions are more likely to impair this
         capacity. This is the lowest investment-grade category.

     Speculative Grade

BB                Speculative. "BB" ratings indicate that there is a possibility
                  of credit risk developing, particularly as the result of
                  adverse economic change over time; however, business or
                  financial alternatives may be available to allow financial
                  commitments to be met. Securities rated in this category are
                  not investment grade.

B                 Highly speculative. "B" ratings indicate that significant
                  credit risk is present, but a limited margin of safety
                  remains. Financial commitments are currently being met;
                  however, capacity for continued payment is contingent upon a
                  sustained, favorable business and economic environment.

CCC, CC, C        High default risk. Default is a real possibility.
                  Capacity for meeting financial commitments is solely reliant
                  upon sustained, favorable business or economic developments. A
                  "CC" rating indicates that default of some kind appears
                  probable. "C" ratings signal imminent default.

DDD, DD, and D    Default. The ratings of obligations in this category
                  are based on their prospects for achieving partial or full
                  recovery in a reorganization or liquidation of the obligor.
                  While expected recovery values are highly speculative and
                  cannot be estimated with any precision, the following serve as
                  general guidelines. "DDD" obligations have the highest
                  potential for recovery, around 90%-100% of outstanding amounts
                  and accrued interest. "DD" indicates potential recoveries in
                  the range of 50%-90%, and "D" the lowest recovery potential,
                  i.e., below 50%.

                  Entities rated in this category have defaulted on some or all
                  of their obligations. Entities rated "DDD" have the highest
                  prospect for resumption of performance or continued operation
                  with or without a formal reorganization process. Entities
                  rated "DD" and "D" are generally undergoing a formal
                  reorganization or liquidation process; those rated "DD" are
                  likely to satisfy a higher portion of their outstanding
                  obligations, while entities rated "D" have a poor prospect for
                  repaying all obligations.

     Short-Term Credit Ratings

     A short-term rating has a time horizon of less than 12 months for most
obligations, or up to three years for U.S. public finance securities, and thus
places greater emphasis on the liquidity necessary to meet financial commitments
in a timely manner.

F1       Highest credit quality. Indicates the strongest capacity for timely
         payment of financial commitments; may have an added "+" to denote any
         exceptionally strong credit feature.

F2       Good credit quality. A satisfactory capacity for timely payment of
         financial commitments, but the margin of safety is not as great as in
         the case of the higher ratings.

F3       Fair credit quality. The capacity for timely payment of financial
         commitments is adequate; however, near-term adverse changes could
         result in a reduction to non-investment grade.

B        Speculative. Minimal capacity for timely payment of financial
         commitments, plus vulnerability to near-term adverse changes in
         financial and economic conditions.

C        High default risk. Default is a real possibility. Capacity for meeting
         financial commitments is solely reliant upon a sustained, favorable
         business and economic environment.

D        Default.  Denotes actual or imminent payment default.

Notes:

"+" or "--" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to the "AAA" long-term rating
category, to categories below "CCC", or to short-term ratings other than "F1".

`NR' indicates that Fitch does not rate the issuer or issue in question.

`Withdrawn': A rating is withdrawn when Fitch deems the amount of information
available to be inadequate for rating purposes, or when an obligation matures,
is called, or refinanced.

Rating alert: Ratings are placed on Rating alert to notify investors that there
is a reasonable probability of a rating change and the likely direction of such
change. These are designated as "Positive", indicating a potential upgrade,
"Negative", for a potential downgrade, or "Evolving", if ratings may be raised,
lowered or maintained. Rating alert is typically resolved over a relatively
short period.



<PAGE>


                                   APPENDIX B

                        GENERAL CHARACTERISTICS AND RISKS
                            OF STRATEGIC TRANSACTIONS

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

Put and Call Options on Securities and Indices

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

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

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

Futures Contracts and Related Options

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

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

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

      Segregation and Cover Requirements. Futures contracts, interest rate
swaps, caps, floors and collars, short sales, reverse repurchase agreements and
dollar rolls, and listed or OTC options on securities, indices and futures
contracts sold by the Trust are generally subject to earmarking and coverage
requirements of either the CFTC or the SEC, with the result that, if the Trust
does not hold the security or futures contract underlying the instrument, the
Trust will be required to designate on its books and records an ongoing basis,
cash, U.S. government securities, or other liquid high grade debt obligations in
an amount at least equal to the Trust's obligations with respect to such
instruments.

      Such amounts fluctuate as the obligations increase or decrease. The
earmarking requirement can result in the Trust maintaining securities positions
it would otherwise liquidate, segregating assets at a time when it might be
disadvantageous to do so or otherwise restrict portfolio management.

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

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



<PAGE>


                                   APPENDIX C

                             PROXY VOTING PROCEDURES

                               PROXY VOTING POLICY

                                       For

                            BlackRock Advisors, Inc.
                and Its Affiliated Registered Investment Advisers

Introduction

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

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

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

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

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

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

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

      A. Social Issues,

      B. Financial/Corporate Issues, and

      C. Shareholder Rights.

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

                                    SECTION I

                                 ROUTINE MATTERS

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

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

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

                              Voting Recommendation

      BlackRock will normally support the following routine proposals:

      1.    To increase authorized common shares.

      2.    To increase authorized preferred shares as long as there are not
            disproportionate voting rights per preferred share.
      3.    To elect or re-elect directors.
      4.    To appoint or elect auditors.
      5.    To approve indemnification of directors and limitation of directors
            liability.
      6.    To establish compensation levels.
      7.    To establish employee stock purchase or ownership plans.
      8.    To set time and location of annual meeting.

                                   SECTION II

                              NON-ROUTINE PROPOSALS

A. Social Issues

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

                              Voting Recommendation

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

      1.    To enforce restrictive energy policies.

      2.    To place arbitrary restrictions on military contracting.

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

      4.    To restrict the marketing of controversial products.

      5.    To limit corporate political activities.

      6.    To bar or restrict charitable contributions.

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

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

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

      10.   To place arbitrary restrictions on environmental practices.

B. Financial/Corporate Issues

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

                              Voting Recommendation

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

      1. To change the state of incorporation.

      2. To approve mergers, acquisitions or dissolution.

      3. To institute indenture changes.

      4. To change capitalization.

C. Shareholder Rights

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

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

                              Voting Recommendation

      We will generally vote for the following management proposals:

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

      2.    To institute staggered board of directors.

      3.    To require shareholder approval of not more than 66 2/3% for a
            proposed amendment to the corporation's by-laws.

      4.    To eliminate cumulative voting.

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

      6.    To create a dividend reinvestment program.

      7.    To eliminate preemptive rights.

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

      We will generally vote against the following management proposals:

      1.    To require greater than 66 2/3% shareholder approval for a
            proposed amendment to the corporation's by-laws ("super-majority
            provisions").

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

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

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

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

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

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

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

            We will generally vote for the following shareholder proposals:

      1.    To rescind share purchases rights or require that they be submitted
            for shareholder approval, but only if the vote required for approval
            is not more than 66 2/3%.

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

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

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

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

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

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

      8.    To create a dividend reinvestment program.

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

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

      We will generally vote against the following shareholder proposals:

      1.    To restore preemptive rights.

      2.    To restore cumulative voting.

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

      4.    To eliminate a staggered board of directors.

      5.    To require confidential voting.

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

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

                                   SECTION III

                                 VOTING PROCESS

      BlackRock has engaged a third-party service provider to assist us in the
voting of proxies. These guidelines have been provided to this service provider,
who then analyzes all proxy solicitations we receive for our clients and makes
recommendations to us as to how, based upon our guidelines, the relevant votes
should be cast. These recommendations are set out in a report that is provided
to the relevant Portfolio Management Group team, who must approve the proxy vote
in writing and return such written approval to the Operations Group. If any
authorized member of a Portfolio Management Group team desires to vote in a
manner that differs from the recommendations, the reason for such differing vote
shall be noted in the written approval form. A copy of the written approval form
is attached as an exhibit. The head of each relevant Portfolio Management Group
team is responsible for making sure that proxies are voted in a timely manner.
The Brokerage Allocation Committee shall receive regular reports of all proxy
votes cast to review how proxies have been voted, including reviewing votes that
differ from recommendations made by our third-party service provider and votes
that may have involved a potential conflict of interest. The Committee shall
also review these guidelines from time to time to determine their continued
appropriateness and whether any changes to the guidelines or the proxy voting
process should be made.

      IF THERE IS ANY POSSIBILITY THAT THE VOTE MAY INVOLVE A MATERIAL CONFLICT
OF INTEREST BECAUSE, FOR EXAMPLE, THE ISSUER SOLICITING THE VOTE IS A BLACKROCK
CLIENT OR THE MATTER BEING VOTED ON INVOLVES BLACKROCK, PNC OR ANY AFFILIATE
(INCLUDING A PORTFOLIO MANAGEMENT GROUP EMPLOYEE) OF EITHER OF THEM, PRIOR TO
APPROVING SUCH VOTE, THE BROKERAGE ALLOCATION COMMITTEE MUST BE CONSULTED AND
THE MATTER DISCUSSED. The Committee, in consultation with the Legal and
Compliance Department, shall determine whether the potential conflict is
material and if so, the appropriate method to resolve such conflict, based on
the particular facts and circumstances, the importance of the proxy issue,
whether the Portfolio Management Group team is proposing a vote that differs
from recommendations made by our third-party service provider with respect to
the issue and the nature of the conflict, so as to ensure that the voting of the
proxy is not affected by the potential conflict. If the conflict is determined
not to be material, the relevant Portfolio Management Group team shall vote the
proxy in accordance with this Policy. Determinations of the Committee with
respect to votes involving material conflicts of interest shall be documented in
writing and maintained for a period of at least six years.

      With respect to votes in connection with securities held on a particular
record date but sold from a client account prior to the holding of the related
meeting, BlackRock may take no action on proposals to be voted on in such
meeting.

      With respect to voting proxies of non-U.S. companies, a number of
logistical problems may arise that may have a detrimental effect on BlackRock's
ability to vote such proxies in the best interests of our clients. These
problems include, but are not limited to, (i) untimely and/or inadequate notice
of shareholder meetings, (ii) restrictions on the ability of holders outside the
issuer's jurisdiction of organization to exercise votes, (iii) requirements to
vote proxies in person, if not practicable, (iv) the imposition of restrictions
on the sale of the securities for a period of time in proximity to the
shareholder meeting, and (v) impracticable or inappropriate requirements to
provide local agents with power of attorney to facilitate the voting
instructions. Accordingly, BlackRock may determine not to vote proxies if it
believes that the restrictions or other detriments associated with such vote
outweigh the benefits that will be derived by voting on the company's proposal.

                                    * * * * *

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

<PAGE>


                                     PART C

                                OTHER INFORMATION

Item 25. Financial Statements and Exhibits

(1)      Financial Statements

         Part A--None.

         Part B--Statement of Assets and Liabilities.

(2)      Exhibits

         (a) Agreement and Declaration of Trust.(1)
         (b) By-Laws.(1)
         (c) Inapplicable.
         (d) Form of Specimen Certificate.(2)
         (e) Form of Dividend Reinvestment Plan.(2)
         (f) Inapplicable.
         (g)(1) Investment Management Agreement.(2)
         (g)(2) Sub-Investment Advisory Agreement.(2)
         (h) Form of Underwriting Agreement.(2)
         (i) Form of the BlackRock Closed-End Trusts Amended and Restated
             Deferred Compensation Plan.(2)
         (j)(1) Form of Custody Agreement.(2)
         (j)(2) Form of Foreign Custody Manager Agreement.(2)
         (k)(1) Form of Stock Transfer Agency Agreement.(2)
         (k)(2) Form of Fund Accounting Agreement.(2)
         (l) Opinion and Consent of Counsel to the Trust.(2)
         (m) Inapplicable.
         (n) Independent Registered Public Accounting Firm Consent.(2)
         (o) Inapplicable.
         (p) Subscription Agreement.(2)
         (q) Inapplicable.
         (r)(1) Code of Ethics of Trust.(2)
         (r)(2) Code of Ethics of the Advisor.(2)
         (s) Power of Attorney.(2)
          --------------------------------
         (1) Filed herewith.
         (2) To be filed by amendment.


Item 26. Marketing arrangements

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

Item 27. Other Expenses of Issuance and Distribution

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

     Registration fees.......................................................
     NYSE listing fee........................................................
     Printing (other than certificates)......................................
     Engraving and printing certificates.....................................
     Accounting fees and expenses related to the offering....................
     Legal fees and expenses related to the offering.........................
     NASD fee................................................................
     Miscellaneous (i.e. travel) related to the offering.....................
          Total..............................................................

Item 28. Persons Controlled by or under Common Control with the Registrant

     None.

Item 29. Number of Holders of Shares

     As of November ___, 2005.

                                                             Number of Record
     Title of class                                               holders
     --------------                                               -------
     Shares of Beneficial Interest...................................0

-------------------------------------------------------------------------------
Item 30. Indemnification

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

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

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

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

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

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

     (e) Subject to any limitations provided by the 1940 Act and this
Declaration, the Trust shall have the power and authority to indemnify and
provide for the advance payment of expenses to employees, agents and other
Persons providing services to the Trust or serving in any capacity at the
request of the Trust to the full extent corporations organized under the
Delaware General Corporation Law may indemnify or provide for the advance
payment of expenses for such Persons, provided that such indemnification has
been approved by a majority of the Trustees.

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

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

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

     Insofar as indemnification for liabilities arising under the Act, may be
terminated to Trustees, officers and controlling persons of the Trust, pursuant
to the foregoing provisions or otherwise, the Trust has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a Trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue. Reference is made to Article 6 of the purchase
agreement attached as Exhibit (h), which is incorporated herein by reference.

Item 31. Business and Other Connections of Investment Advisor

     Not Applicable

Item 32. Location of Accounts and Records

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

Item 33. Management Services

     Not Applicable

Item 34. Undertakings

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

     (2) Not applicable

     (3) Not applicable

     (4) Not applicable

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

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

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



<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, and State of New York, on the 17th day of November, 2005.



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

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities set forth
below on the 17th day of November, 2005.

NAME                                      TITLE
----                                      -----


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






<PAGE>


                                INDEX TO EXHIBITS

Ex. 99(a)           Declaration of Trust
Ex. 99(b)           By-Laws





</TEXT>
</DOCUMENT>
