N-CSRS 1 c57443_n-csrs.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05542

Name of Fund: BlackRock Income Trust, Inc. (BKT)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock Income Trust, Inc., 800 Scudders Mill Road, Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ 08543-9011

Registrants telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 08/31/2009

Date of reporting period: 02/28/2009

Item 1 Report to Stockholders

EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS


Semi-Annual
Report
FEBRUARY 28, 2009 \| (UNAUDITED)

BlackRock Core Bond Trust (BHK)
BlackRock Corporate High Yield Fund V, Inc. (HYV)
BlackRock Corporate High Yield Fund VI, Inc. (HYT)
BlackRock High Income Shares (HIS)
BlackRock High Yield Trust (BHY)
BlackRock Income Opportunity Trust, Inc. (BNA)
BlackRock Income Trust, Inc. (BKT)
BlackRock Strategic Bond Trust (BHD)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE

Table of Contents

	Page
A Letter to
Shareholders	3
Semi-Annual
Report:
Trust Summaries	4
The Benefits and
Risks of Leveraging	12
Derivative
Instruments	12
Financial Statements:
Schedules of
Investments	13
Statements of Assets and
Liabilities	60
Statements of
Operations	62
Statements of Changes in
Net Assets	64
Statements of Cash
Flows	67
Financial
Highlights	68
Notes to
Financial Statements	76
Officers and
Directors/Trustees	85
Additional
Information	86

2 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

A Letter to Shareholders

Dear Shareholder

The present time may well be remembered as one of the most tumultuous periods in financial market history. Over the past year, the housing market collapse and the ensuing credit crisis swelled into an all-out global financial market meltdown, featuring the collapse of storied financial firms, volatile swings in the worlds financial markets and monumental government actions, including the recent passage of the nearly $800 billion American Recovery and Reinvestment Act of 2009.

The US economy appeared somewhat resilient through the first few months of 2008 before becoming mired in the worst recession in decades. The economic data was dire across the board, but worse was the intensifying pace of deterioration in consumer spending, employment, manufacturing and other key indicators. US gross domestic product (GDP) contracted at an annual rate of 6.3% in the 2008 fourth quartersubstantially below forecast and the worst reading since 1982. The Federal Reserve Board (the Fed) took forceful action to revive the global economy and financial system. In addition to slashing the federal funds target rate from 3% to a record low range of 0% to 0.25%, the central bank provided enormous cash injections and significantly expanded its balance sheet via various lending and acquisition programs.

Against this backdrop, US equities contended with relentless market volatility, and the sentiment turned decisively negative toward period end. Declines were significant and broad based, with little divergence among the returns for large and small cap stocks. Non-US stocks were not spared either, as the credit crisis revealed itself to be global in nature and economic activity slowed dramatically.

Risk aversion remained the dominant theme in fixed income markets, leading the Treasury sector to top all other asset classes. The high yield market was particularly hard hit in this environment, as economic turmoil, combined with frozen credit markets and substantial technical pressures, took a heavy toll. Meanwhile, tax-exempt issues posted positive returns for the period, but the sector was not without significant challenges, including a shortage of market participants, lack of liquidity, difficult funding environment and backlog of new-issue supply.

In all, investors continued to gravitate toward relative safety, as evidenced in the six- and 12-month returns of the major benchmark indexes:

Total Returns as of February 28, 2009 — US equities (S&P 500 Index)	6-month — (41.82	)%	12-month — (43.32	)%
Small cap US equities (Russell 2000 Index)	(46.91	)	(42.38	)
International equities (MSCI Europe, Australasia, Far East
Index)	(44.58	)	(50.22	)
US Treasury securities (Merrill Lynch 10-Year US Treasury
Index)	8.52		8.09
Taxable fixed income (Barclays Capital US Aggregate Bond
Index*)	1.88		2.06
Tax-exempt fixed income (Barclays Capital Municipal Bond
Index*)	0.05		5.18
High yield bonds (Barclays Capital US Corporate High Yield
2% Issuer Capped Index*)	(21.50	)	(20.92	)

Formerly a Lehman Brothers index.

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

Through periods of market turbulence, as ever, BlackRocks full resources are dedicated to the management of our clients assets. For our most current views on the economy and financial markets, we invite you to visit www.blackrock.com/funds . We thank you for entrusting BlackRock with your investments, and we look forward to continuing to serve you in the months and years ahead.

Sincerely,

Rob Kapito President, BlackRock Advisors, LLC

THIS PAGE NOT PART OF YOUR FUND REPORT 3

Trust Summary as of February 28, 2009
Investment Objective

BlackRock Core Bond Trust (BHK) (the Trust) seeks to provide high current income with the potential for capital appreciation.

Performance

For the six months ended February 28, 2009, the Trust returned (3.92)% based on market price and (13.99)% based on net asset value (NAV). For the same period, the closed-end Lipper Corporate Debt Funds BBB-Rated category posted an average return of (7.99)% on a market price basis and (13.71)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust moved from a discount to a premium to NAV, which accounts for the difference between performance based on price and performance based on NAV. The Trusts 43% allocation to mortgage-backed securities (MBS) as of February 28, 2009 helped performance, as MBS outperformed corporate bonds during the period. In addition, at 16% leverage as of February 28, 2009, the Trust used less leverage than many of its Lipper peers, which aided results in a difficult market. Meanwhile, the Trusts allocations to commercial mortgage-backed securities, high yield and preferred securities underperformed.

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

Trust Information

Symbol on New York Stock Exchange	BHK
Initial Offering Date	November 27, 2001
Yield on Closing Market Price as
of February 28, 2009 ($10.65) 1	6.99%
Current Monthly Distribution per
Share 2	$0.062
Current Annualized Distribution
per Share 2	$0.744
Leverage as of February 28, 2009 3	16%

| 1 | Yield on closing market price is calculated by dividing
the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| --- | --- |
| 2 | The distribution is not constant and is subject to change.
A portion of the distribution may be deemed a tax return of capital or net
realized gain. |
| 3 | Represents reverse repurchase agreements as a percentage
of total managed assets, which is the total assets of the Trust (including
any assets attributable to any borrowing that may be outstanding) minus the
sum of accrued liabilities (other than debt representing financial leverage).
For a discussion of leveraging techniques utilized by the Trust, please see
the Benefits and Risks of Leveraging on page 12. |

The table below summarizes the changes in the Trusts market price and NAV per share:

	2/28/09	8/31/08	Change		High	Low
Market Price	$10.65	$11.51	(7.47	)%	$11.78	$ 7.66
Net Asset Value	$10.61	$12.81	(17.17	)%	$13.08	$10.41

The following charts show the portfolio composition of the Trusts long-term investments and credit quality allocations of the Trusts corporate bond investments:

Portfolio Composition

	2/28/09	8/31/08
Corporate Bonds	41 %	47 %
U.S. Government Agency Mortgage-Backed
Securities	21	18
Non-U.S. Government Agency Mortgage-Backed
Securities	20	13
U.S. Government Obligations	8	8
Asset-Backed Securities	6	9
U.S. Government Agency Mortgage-Backed
Securities-Collateralized Mortgage Obligations	2	2
Preferred Securities	1	2
Foreign Government Obligations	1	1

Credit Quality Allocations 4

Credit Rating	2/28/09	8/31/08
AAA/Aaa	2 %	7 %
AA/Aa	17	18
A/A	37	26
BBB/Baa	26	26
BB/Ba	5	5
B/B	9	13
CCC/Caa	3	4
Not Rated	1	1

4 Using the higher of Standard & Poors (S&Ps) or Moodys Investors Service (Moodys) ratings.

4 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Trust Summary as of February 28, 2009 BlackRock Corporate High Yield Fund V, Inc.

Investment Objective

BlackRock Corporate High Yield Fund V, Inc. (HYV) (the Trust) seeks to provide shareholders with current income by investing primarily in a diversified portfolio of fixed income securities that are rated in the lower rating categories of the established rating services (Ba or lower by Moodys or BB or lower by S&P) or are unrated securities of comparable quality.

Performance

For the six months ended February 28, 2009, the Trust returned (32.48)% based on market price and (36.32)% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of (34.08)% on a market price basis and (34.87)% on a NAV basis. All returns reflect reinvestment of dividends. The Trusts discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The period from September 15, 2008 to December 12, 2008 was the worst in high yield market history. In this environment, the Trust was positioned conservatively, with an emphasis on defensive sectors, an allocation to bank loans and higher-than-normal cash balances. For most of the period, the Trust also had lower leverage than the majority of its Lipper peers. This aided relative performance during the first half of the period, but was a detractor amid the significant market recovery in the second half.

Trust Information

| Symbol on New York
Stock Exchange | HYV |
| --- | --- |
| Initial Offering
Date | November 30, 2001 |
| Yield on Closing
Market Price as of February 28, 2009 ($6.21) 1 | 19.32% |
| Current Monthly
Distribution per Share 2 | $0.10 |
| Current Annualized
Distribution per Share 2 | $1.20 |
| Leverage as of
February 28, 2009 3 | 18% |

| 1 | Yield on closing market price is calculated by dividing
the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| --- | --- |
| 2 | The distribution is not constant and is subject to change. |
| 3 | Represents loan outstanding as a percentage of total
managed assets, which is the total assets of the Trust (including any assets
attributable to any borrowing that may be outstanding) minus the sum of
accrued liabilities (other than debt representing financial leverage). For a
discussion of leveraging techniques utilized by the Trust, please see the
Benefits and Risks of Leveraging on page 12. |

The table below summarizes the changes in the Trusts market price and NAV per share:

	2/28/09	8/31/08	Change		High	Low
Market Price	$ 6.21	$ 10.15	(38.82	)%	$ 10.29	$ 4.56
Net Asset Value	$ 6.89	$ 11.94	(42.29	)%	$ 11.94	$ 6.53

The following charts show the portfolio composition of the Trusts long-term investments and credit quality allocations of the Trusts corporate bond investments:

Portfolio Composition

	2/28/09	8/31/08
Corporate Bonds	82 %	83 %
Floating Rate Loan
Interests	16	14
Non-U.S.
Government Agency Mortgage-Backed
Securities	1
Common Stocks	1	2
Preferred
Securities		1

Credit Quality Allocations 4

Credit Rating	2/28/09	8/31/08
A/A		1 %
BBB/Baa	4 %	4
BB/Ba	32	26
B/B	48	54
CCC/Caa	13	13
CC/Ca	1
Not Rated	2	2

4 Using the higher of S&Ps or Moodys ratings.

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 5

Trust Summary as of February 28, 2009 BlackRock Corporate High Yield Fund VI, Inc.

Investment Objective

BlackRock Corporate High Yield Fund VI, Inc. (HYT) (the Trust) seeks to provide shareholders with current income by investing primarily in a diversified portfolio of fixed income securities that are rated in the lower rating categories of the established rating services (Ba or lower by Moodys or BB or lower by S&P) or are unrated securities of comparable quality.

Performance

For the six months ended February 28, 2009, the Trust returned (31.63)% based on market price and (36.23)% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of (34.08)% on a market price basis and (34.87)% on a NAV basis. All returns reflect reinvestment of dividends. The Trusts discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The period from September 15, 2008 to December 12, 2008 was the worst in high yield market history. In this environment, the Trust was positioned conservatively, with an emphasis on defensive sectors, an allocation to bank loans and higher-than-normal cash balances. For most of the period, the Trust also had lower leverage than the majority of its Lipper peers. This aided relative performance during the first half of the period, but was a detractor amid the significant market recovery in the second half.

Trust Information

| Symbol on New York
Stock Exchange | HYT |
| --- | --- |
| Initial Offering
Date | May 30, 2003 |
| Yield on Closing
Market Price as of February 28, 2009 ($6.30) 1 | 19.05% |
| Current Monthly
Distribution per Share 2 | $0.10 |
| Current Annualized
Distribution per Share 2 | $1.20 |
| Leverage as of
February 28, 2009 3 | 19% |

| 1 | Yield on closing market price is calculated by dividing
the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| --- | --- |
| 2 | The distribution is not constant and is subject to change. |
| 3 | Represents loan outstanding as a percentage of total managed
assets, which is the total assets of the Trust (including any assets
attributable to any borrowing that may be outstanding) minus the sum of
accrued liabilities (other than debt representing financial leverage). For a
discussion of leveraging techniques utilized by the Trust, please see the
Benefits and Risks of Leveraging on page 12. |

The table below summarizes the changes in the Trusts market price and NAV per share:

	2/28/09	8/31/08	Change		High	Low
Market Price	$ 6.30	$ 10.14	(37.87	)%	$ 10.28	$ 4.50
Net Asset Value	$ 6.89	$ 11.89	(42.05	)%	$ 11.89	$ 6.48

The following charts show the portfolio composition of the Trusts long-term investments and credit quality allocations of the Trusts corporate bond investments:

Portfolio Composition

	2/28/09	8/31/08
Corporate Bonds	82 %	83 %
Floating Rate Loan
Interests	16	14
Non-U.S. Government
Agency Mortgage-Backed
Securities	1
Common Stocks	1	2
Preferred
Securities		1

Credit Quality Allocations 4

Credit Rating	2/28/09	8/31/08
BBB/Baa	5 %	5 %
BB/Ba	31	26
B/B	48	54
CCC/Caa	13	13
CC/Ca	1
Not Rated	2	2

4 Using the higher of S&Ps or Moodys ratings.

6 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Trust Summary as of February 28, 2009 BlackRock High Income Shares

| Investment
Objective |
| --- |
| BlackRock
High Income Shares (HIS) (the Trust) seeks to provide high current
income and to a lesser extent capital appreciation, by investing in a diversified
portfolio of below investment grade securities. |
| Performance |
| For the six months
ended February 28, 2009, the Trust returned (30.47)% based on market price
and (33.50)% based on NAV. For the same period, the closed-end Lipper High
Current Yield Funds (Leveraged) category posted an average return of (34.08)%
on a market price basis and (34.87)% on a NAV basis. All returns reflect
reinvestment of dividends. The Trusts discount to NAV, which narrowed during
the period, accounts for the difference between performance based on price
and performance based on NAV. The period from September 15, 2008 to December
12, 2008 was the worst in high yield market history. In this environment, the
Trust was positioned conservatively, with an emphasis on defensive sectors,
an allocation to bank loans and higher-than-normal cash balances. For most of
the period, the Trust also had lower leverage than the majority of its Lipper
peers. This aided relative performance during the first half of the period,
but was a detractor amid the significant market recovery in the second half. |
| The views expressed reflect the
opinions of BlackRock as of the date of this report and are subject to change
based on changes in market, economic or other conditions. These views are not
intended to be a forecast of future events and are no guarantee of future
results. |
| Trust
Information |

| Symbol on New York
Stock Exchange | HIS |
| --- | --- |
| Initial Offering
Date | August 10, 1988 |
| Yield on Closing
Market Price as of February 28, 2009 ($1.19) 1 | 18.35% |
| Current Monthly
Distribution per Share 2 | $0.0182 |
| Current Annualized
Distribution per Share 2 | $0.2184 |
| Leverage as of
February 28, 2009 3 | 20% |

| 1 | Yield on closing market price is calculated by dividing
the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| --- | --- |
| 2 | The distribution is not constant and is subject to change. |
| 3 | Represents loan outstanding as a percentage of total
managed assets, which is the total assets of the Trust (including any assets
attributable to any borrowing that may be outstanding) minus the sum of
accrued liabilities (other than debt representing financial leverage). For a
discussion of leveraging techniques utilized by the Trust, please see the
Benefits and Risks of Leveraging on page 12. |
| The table below
summarizes the changes in the Trusts market price and NAV per share: | |

	2/28/09	8/31/08	Change		High	Low
Market Price	$ 1.19	$ 1.88	(36.70	)%	$ 1.92	$ 0.83
Net Asset Value	$ 1.35	$ 2.23	(39.46	)%	$ 2.24	$ 1.27
The following
charts show the portfolio composition of the Trusts long-term investments
and credit quality allocations of the Trusts corporate bond investments:

| Portfolio
Composition | 2/28/09 | 8/31/08 |
| --- | --- | --- |
| Corporate Bonds | 86 % | 86 % |
| Floating Rate Loan
Interests | 13 | 11 |
| Preferred
Securities | 1 | 3 |

| Credit Quality
Allocations 4 — Credit Rating | 2/28/09 | 8/31/08 |
| --- | --- | --- |
| BBB/Baa | 5 % | 4 % |
| BB/Ba | 36 | 23 |
| B/B | 40 | 52 |
| CCC/Caa | 14 | 16 |
| CC/Ca | 1 | |
| D | 1 | |
| Not Rated | 3 | 5 |

4 Using the higher of S&Ps or Moodys ratings.

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 7

Trust Summary as of February 28, 2009 BlackRock High Yield Trust

| Investment
Objective |
| --- |
| BlackRock
High Yield Trust (BHY) (the Trust) seeks to provide high current
income and to a lesser extent capital appreciation, by investing in a
diversified portfolio of below investment grade securities. |
| Performance |
| For the six months
ended February 28, 2009, the Trust returned (16.36)% based on market price and
(32.57)% based on NAV. For the same period, the closed-end Lipper High
Current Yield Funds (Leveraged) category posted an average return of (34.08)%
on a market price basis and (34.87)% on a NAV basis. All returns reflect
reinvestment of dividends. The Trust moved from a discount to a premium to
NAV, which accounts for the difference between performance based on price and
performance based on NAV. The period from September 15, 2008 to December 12,
2008 was the worst in high yield market history. In this environment, the
Trust was positioned conservatively, with an emphasis on defensive sectors,
an allocation to bank loans and higher-than-normal cash balances. For most of
the period, the Trust also had lower leverage than the majority of its Lipper
peers. This aided relative performance during the first half of the period,
but was a detractor amid the significant market recovery in the second half. |
| The views expressed reflect the
opinions of BlackRock as of the date of this report and are subject to change
based on changes in market, economic or other conditions. These views are not
intended to be a forecast of future events and are no guarantee of future
results. |
| Trust
Information |

| Symbol on New York
Stock Exchange | BHY |
| --- | --- |
| Initial Offering
Date | December 23, 1998 |
| Yield on Closing
Market Price as of February 28, 2009 ($4.68) 1 | 13.08% |
| Current Monthly
Distribution per Share 2 | $0.051 |
| Current Annualized
Distribution per Share 2 | $0.612 |
| Leverage as of
February 28, 2009 3 | 13% |

| 1 | Yield on closing market price is calculated by dividing
the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| --- | --- |
| 2 | A change in the distribution rate was declared on March 2,
2009. The Monthly Distribution per Share was decreased to $0.0435. The Yield
on Closing Market Price, Current Monthly Distribution per Share and Current
Annualized Distribution per Share do not reflect the new distribution rate.
The new distribution rate is not constant and is subject to further change in
the future. A portion of the distribution may be deemed a tax return of
capital or net realized gain. |
| 3 | Represents loan outstanding as a percentage of total
managed assets, which is the total assets of the Trust (including any assets
attributable to any borrowing that may be outstanding) minus the sum of
accrued liabilities (other than debt representing financial leverage). For a
discussion of leveraging techniques utilized by the Trust, please see the
Benefits and Risks of Leveraging on page 12. |
| The table below
summarizes the changes in the Trusts market price and NAV per share: | |

	2/28/09	8/31/08	Change		High	Low
Market Price	$ 4.68	$ 5.96	(21.48	)%	$ 6.00	$ 3.11
Net Asset Value	$ 4.33	$ 6.84	(36.70	)%	$ 6.86	$ 4.06
The following
charts show the portfolio composition of the Trusts long-term investments
and credit quality allocations of the Trusts corporate bond investments:

| Portfolio
Composition | 2/28/09 | 8/31/08 |
| --- | --- | --- |
| Corporate Bonds | 86 % | 88 % |
| Floating Rate Loan
Interests | 12 | 11 |
| Non-U.S.
Government Agency Mortgage-Backed
Securities | 1 | |
| Preferred
Securities | 1 | 1 |

| Credit Quality
Allocations 4 — Credit Rating | 2/28/09 | 8/31/08 |
| --- | --- | --- |
| BBB/Baa | 4 % | 6 % |
| BB/Ba | 35 | 24 |
| B | 43 | 52 |
| CCC/Caa | 14 | 15 |
| CC/Ca | 1 | |
| Not Rated | 3 | 3 |

4 Using the higher of S&Ps or Moodys ratings.

8 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Trust Summary as of February 28, 2009 BlackRock Income Opportunity Trust, Inc.

Investment Objective

BlackRock Income Opportunity Trust, Inc. (BNA) (the Trust) seeks to provide current income and capital appreciation in a portfolio of primarily U.S. dollar-denominated securities.

Performance

For the six months ended February 28, 2009, the Trust returned (7.56)% based on market price and (12.79)% based on NAV. For the same period, the closed-end Lipper Corporate Debt Funds BBB-Rated category posted an average return of (7.99)% on a market price basis and (13.71)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust moved from a discount to a premium to NAV, which accounts for the difference between performance based on price and performance based on NAV. The Trusts 39% allocation to mortgage-backed securities (MBS) as of February 28, 2009 helped performance, as MBS outperformed corporate bonds during the period. In addition, at 12% leverage as of February 28, 2009, the Trust used less leverage than many of its Lipper peers, which aided results in a difficult market. Meanwhile, the Trusts allocations to commercial mortgage-backed securities, high yield and preferred securities underperformed.

Trust Information

Symbol on New York Stock Exchange	BNA
Initial Offering Date	December 20, 1991
Yield on Closing Market Price as of
February 28, 2009 ($8.75) 1	6.99%
Current Monthly Distribution per
Share 2	$0.051
Current Annualized Distribution per
Share 2	$0.612
Leverage as of February 28, 2009 3	12%

| 1 | Yield on closing market price is calculated by dividing
the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| --- | --- |
| 2 | The distribution rate is not constant and is subject to
change. A portion of the distribution may be deemed a tax return of capital
or net realized gain. |
| 3 | Represents reverse repurchase agreements as a percentage
of total managed assets, which is the total assets of the Trust (including
any assets attributable to any borrowing that may be outstanding) minus the
sum of accrued liabilities (other than debt representing financial leverage).
For a discussion of leveraging techniques utilized by the Trust, please see
the Benefits and Risks of Leveraging on page 12. |

The table below summarizes the changes in the Trusts market price and NAV per share:

	2/28/09	8/31/08	Change		High	Low
Market Price	$ 8.75	$ 9.82	(10.90	)%	$ 10.00	$ 5.00
Net Asset Value	$ 8.70	$ 10.35	(15.94	)%	$ 10.57	$ 8.55

The following charts show the portfolio composition of the Trusts long-term investments and credit quality allocations of the Trusts corporate bond investments:

Portfolio Composition

	2/28/09	8/31/08
Corporate Bonds	42 %	42 %
Non-U.S. Government Agency Mortgage-Backed
Securities	20	14
U.S. Government Agency Mortgage-Backed
Securities	16	15
U.S. Government Obligations	11	11
Asset-Backed Securities	6	10
U.S. Government and Agency Mortgage-Backed
Securities-Collateralized Mortgage Obligations	3	3
Capital Trusts	2	4
Foreign Government Obligations		1

Credit Quality Allocations 4

Credit Rating	2/28/09	8/31/08
AAA/Aaa	6 %	8 %
AA/Aa	15	18
A/A	37	28
BBB/Baa	27	26
BB/Ba	4	5
B/B	9	12
CCC/Caa	2	3

4 Using the higher of S&Ps or Moodys ratings.

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 9

Trust Summary as of February 28, 2009 BlackRock Income Trust, Inc.

Investment Objective

BlackRock Income Trust, Inc. (BKT) (the Trust) seeks to provide high monthly income while preserving capital by investing in a portfolio of mortgage-backed securities.

Performance

For the six months ended February 28, 2009, the Trust returned 0.00% based on market price and (1.75)% based on NAV. For the same period, the closed-end Lipper US Mortgage Funds category posted an average return of (13.29)% on a market price basis and (12.14)% on a NAV basis. All returns reflect reinvestment of dividends. The Trusts discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. During the six-month period, the Trusts large allocations to US government agency mortgage-backed securities (MBS) helped performance, while small allocations to non-agency MBS and other structured securities detracted from results. The Trust used less leverage than its Lipper peers, which aided relative performance.

Trust Information

| Symbol on New York
Stock Exchange | BKT |
| --- | --- |
| Initial Offering
Date | July 22, 1988 |
| Yield on Closing
Market Price as of February 28, 2009 ($5.92) 1 | 4.86% |
| Current Monthly
Distribution per Share 2 | $0.024 |
| Current Annualized
Distribution per Share 2 | $0.288 |

The table below summarizes the changes in the Trusts market price and NAV per share:

	2/28/09	8/31/08	Change		High	Low
Market Price	$ 5.92	$ 6.07	(2.47	)%	$ 6.28	$ 4.32
Net Asset Value	$ 6.65	$ 6.94	(4.18	)%	$ 6.99	$ 6.38

The following chart shows the portfolio composition of the Trusts long-term investments:

Portfolio Composition

	2/28/09	8/31/08
U.S. Government Agency Mortgage-Backed
Securities	59 %	46 %
U.S. Government Agency Mortgage-Backed
Securities-Collateralized Mortgage Obligations	21	28
Non-U.S. Government Agency Mortgage-Backed
Securities	12	18
U.S. Government and Agency Obligations	6	6
Asset-Backed Securities	2	2

10 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Trust Summary as of February 28, 2009 BlackRock Strategic Bond Trust

Investment Objective

BlackRock Strategic Bond Trust (BHD) (the Trust) seeks total return through high current income and capital appreciation.

Performance

For the six months ended February 28, 2009, the Trust returned (10.42)% based on market price and (18.21)% based on NAV. For the same period, the closed-end Lipper General Bond Funds category posted an average return of (11.70)% on a market price basis and (13.41)% on a NAV basis. All returns reflect reinvestment of dividends. The Trusts discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The Trusts 56% allocation to high yield as of February 28, 2009 hurt relative performance, as the Trust sits in a general bond fund category and high yield underperformed investment-grade bonds. Allocations to preferred issues, convertible securities and bank loans also detracted from performance during the six months.

Trust Information

| Symbol on New York
Stock Exchange | BHD |
| --- | --- |
| Initial Offering
Date | February 26, 2002 |
| Yield on Closing
Market Price as of February 28, 2009 ($9.23) 1 | 10.01% |
| Current Monthly
Distribution per Share 2 | $0.077 |
| Current Annualized
Distribution per Share 2 | $0.924 |

	2/28/09	8/31/08	Change	High	Low
Market Price	$ 9.23	$ 10.85	(14.93)%	$ 10.95	$ 6.25
Net Asset Value	$ 9.91	$ 12.76	(22.34)%	$ 12.81	$ 9.38

The following charts show the portfolio composition of the Trusts long-term investments and credit quality allocations of the Trusts corporate bond investments:

Portfolio Composition

	2/28/09	8/31/08
Corporate Bonds	88 %	88 %
Floating Rate Loan
Interests	8	5
Non U.S.
Government Agency	2
U.S. Government
Obligations		4
Preferred Securities	2	3

Credit Quality Allocations 3

Credit Rating	2/28/09	8/31/08
AA/Aa	22 %	4 %
A		18
BBB/Baa	16	18
BB/Ba	21	14
B	29	36
CCC/Caa	10	8
Not Rated	2	2

3 Using the higher of S&Ps or Moodys ratings.

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 11

T he Benefits and Risks of Leveraging

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

The Trusts may utilize leverage through borrowings and the issuance of short-term securities. In general, the concept of leveraging is based on the premise that the cost of assets to be obtained from leverage will be based on short-term interest rates, which normally will be lower than the income earned by each Trust on its longer-term portfolio investments. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Trusts Common Shareholders will benefit from the incremental yield.

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

To illustrate these concepts, assume a Trusts Common Shares capitalization is $100 million and it issues debt securities for an additional $30 million, creating a total value of $130 million available for investment in long-term securities. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Trust pays interest expense on the $30 million of debt securities based on the lower short-term interest rates. At the same time, the Trusts total portfolio of $130 million earns the income based on long-term interest rates. In this case, the interest expense of the debt securities is significantly lower than the income earned on the Trusts long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental yield.

Conversely, if prevailing short-term interest rates rise above long-term interest rates of 6%, the yield curve has a negative slope. In this case, the Trust pays interest expense on the higher short-term interest rates whereas the Trusts total portfolio earns income based on lower long-term interest rates. If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pickup on the Common Shares will be reduced or eliminated completely.

Furthermore, the value of the Trusts portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the redemption value of the Trusts debt securities do not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trusts NAV positively or negatively in addition to the impact on Trust performance from leverage from debt securities.

The use of leverage may enhance opportunities for increased returns to the Trusts and Common Shareholders, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes to each Trusts NAV, market price and dividend rate than a comparable portfolio without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, each Trusts net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, each Trusts net income will be less than if leverage had not been used, and therefore the amount available for distribution to shareholders will be reduced. A Trust may be required to sell portfolio securities at inopportune times or below fair market values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments which may cause a Trust to incur losses. The use of leverage may limit a Trusts ability to invest in certain types of securities or use certain types of hedging strategies, such as in the case of certain restrictions imposed by ratings agencies that rate preferred shares issued by a Trust. A Trust will incur expenses in connection with the use of leverage, all of which are borne by the holders of the Common Shares and may reduce returns on the Common Shares.

Under the Investment Company Act of 1940, the Trusts are permitted to borrow through a credit facility and the issuance of short-term debt securities up to 33 1/ 3 % of total managed assets. As of February 28, 2009, the Trusts had outstanding leverage from reverse repurchase agreements and credit facility borrowings as a percentage of their total managed assets as follows:

| | Percent
of Leverage |
| --- | --- |
| BlackRock Core Bond Trust | 16 % |
| BlackRock Corporate High Yield Fund V, Inc. | 18 % |
| BlackRock Corporate High Yield Fund VI, Inc. | 19 % |
| BlackRock High Income Shares | 20 % |
| BlackRock High Yield Trust | 13 % |
| BlackRock Income Opportunity Trust | 12 % |

D erivative Instruments

The Trusts may invest in various derivative instruments, including swap agreements, futures and forward currency contracts, and other instruments specified in the Notes to Financials Statements, which constitute forms of economic leverage. Such instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Such derivative instruments involve risks, including the imperfect correlation between the value of a derivative instrument and the underlying asset, possible default of the other party to the transaction and illiquidity of the derivative instrument. A Trusts ability to successfully use a derivative instrument depends on the investment advisors ability to accurately predict pertinent market movements, which cannot be assured. The use of derivative instruments may result in losses greater than if they had not been used, may require the Trusts to sell or purchase portfolio securities at inopportune times or for prices other than current market values, may limit the amount of appreciation the Trusts can realize on an investment or may cause the Trusts to hold a security that they might otherwise sell. The Trusts investments in these instruments are discussed in detail in the Notes to Financial Statements.

12 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

| S chedule of
Investments February
28, 2009 (Unaudited) |
| --- |
| (Percentages shown are based on Net Assets) |

Asset-Backed Securities		Par (000)	Value
Chase
Issuance Trust:
Series
2007-A17 Class A, 5.12%, 10/15/14	USD	2,300	$ 2,331,740
Series
2008-A9 Class A9, 4.26%, 5/15/13		1,845	1,851,727
Citibank
Omni Master Trust Series 2007-A9A Class A9, 1.573%, 12/23/13 (a)		2,720	2,433,780
Countrywide
Asset Backed Certificates Series 2006-13 Class 3AV2, 0.624%, 1/25/37 (a)		1,684	1,083,106
Daimler
Chrysler Auto Trust Series 2006-A Class A3, 5%, 5/08/10		214	213,521
Harley-Davidson
Motorcycle Trust Series 2005-2 Class A2, 4.07%, 2/15/12		1,109	1,078,133
Home Equity
Asset Trust Series 2007-2 Class 2A1, 0.584%, 7/25/37 (a)		597	503,126
JPMorgan
Mortgage Acquisition Corp. Series 2007-CH5 Class A3, 0.584%, 5/25/37 (a)		3,635	2,280,800
SLM Student
Loan Trust (a):
Series
2005-5 Class A1, 1.159%, 1/25/18		117	116,928
Series
2008-5 Class A2, 2.259%, 10/25/16		3,200	3,010,627
Series
2008-5 Class A3, 2.459%, 1/25/18		810	728,564
Series
2008-5 Class A4, 2.859%, 7/25/23		2,180	1,974,776
Small Business
Administration Class 1:
Series
2003-P10B, 5.136%, 8/10/13		755	775,689
Series
2004-P10B, 4.754%, 8/10/14		456	465,327
Sterling
Bank Trust Series 2004-2 Class Note, 2.081%, 3/30/30 (b)		6,507	396,487
Sterling
Coofs Trust Series 1, 2.362%, 4/15/29		9,156	852,677
USAA Auto
Owner Trust Series 2006-1 Class A4, 5.04%, 12/15/11		2,725	2,734,947
Total Asset-Backed Securities8.0%			22,831,955
Corporate Bonds
Aerospace &
Defense1.4%
Honeywell
International, Inc., 5.70%, 3/15/37		975	931,710
Northrop-Grumman
Corp., 7.875%, 3/01/26		960	1,074,415
United
Technologies Corp.:
4.875%,
5/01/15 (c)		1,125	1,152,365
6.125%,
7/15/38		700	728,426
			3,886,916
Air Freight & Logistics0.6%
Park-Ohio
Industries, Inc., 8.375%, 11/15/14		120	49,200
United
Parcel Service, Inc., 6.20%, 1/15/38		1,650	1,676,634
			1,725,834
Airlines0.0%
American
Airlines, Inc. Series 99-1, 7.324%, 4/15/11		115	108,100
Auto Components0.0%
Lear Corp.,
8.75%, 12/01/16		120	20,400
Automobiles0.1%
Ford
Capital BV, 9.50%, 6/01/10		600	192,000
Beverages0.5%
Anheuser-Busch
InBev Worldwide, Inc., 8.20%, 1/15/39 (d)		1,475	1,430,096
Building Products0.0%
CPG
International I, Inc., 10.50%, 7/01/13		200	106,000
Momentive
Performance Materials, Inc., 11.50%, 12/01/16		215	45,150
			151,150
Corporate Bonds		Par (000)	Value
Capital Markets0.4%
Lehman Brothers
Holdings, Inc. (e):
4.519%,
9/15/22	USD	525	$ 64,313
Series MTN,
7%, 9/27/27		1,250	162,500
Morgan
Stanley:
1.648%,
1/09/12 (a)		190	148,251
6.25%,
8/28/17		875	791,008
Series F,
5.55%, 4/27/17		140	121,076
			1,287,148
Chemicals0.5%
American
Pacific Corp., 9%, 2/01/15		250	210,000
Ames True
Temper, Inc., 5.094%, 1/15/12 (a)		650	422,500
Innophos,
Inc., 8.875%, 8/15/14		885	703,575
			1,336,075
Commercial Banks1.8%
DEPFA ACS
Bank, 5.125%, 3/16/37 (d)		3,775	2,068,047
HSBC Bank
USA NA, 5.875%, 11/01/34		775	654,982
HSBC
Finance Corp., 6.50%, 5/02/36		300	265,375
Wachovia
Bank NA, 6.60%, 1/15/38		1,925	1,695,309
Wells Fargo
& Co., 4.875%, 1/12/11		435	437,623
			5,121,336
Commercial Services &
Supplies0.6%
DI Finance
Series B, 9.50%, 2/15/13		598	544,180
Waste
Services, Inc., 9.50%, 4/15/14		590	466,100
West Corp.,
11%, 10/15/16		1,100	704,000
			1,714,280
Computers &
Peripherals1.6%
International
Business Machines Corp.:
5.70%,
9/14/17 (c)		3,125	3,205,503
8%,
10/15/38		1,100	1,307,277
			4,512,780
Consumer Finance0.5%
SLM Corp.
(a):
1.299%,
7/27/09		1,150	1,070,620
Series A,
1.459%, 1/27/14		550	283,645
			1,354,265
Containers &
Packaging0.9%
Crown
Americas LLC, 7.75%, 11/15/15		150	151,125
Graphic
Packaging International Corp., 9.50%, 8/15/13		735	547,575
Impress
Holdings BV, 4.219%, 9/15/13 (a)(d)		300	222,000
Owens-Brockway
Glass Container, Inc., 8.25%, 5/15/13		1,500	1,515,000
Pregis
Corp., 12.375%, 10/15/13		545	242,525
			2,678,225
Diversified Consumer
Services0.2%
Princeton
University, 5.70%, 3/01/39		575	562,074
Diversified Financial
Services2.8%
Bank of
America Corp., 6%, 9/01/17 (c)		1,590	1,338,421
Bank of
America NA, 6.10%, 6/15/17 (c)		1,975	1,499,890
FCE Bank
Plc, 7.125%, 1/16/12	EUR	250	193,332
Ford Motor
Credit Co. LLC:
4.01%,
1/13/12 (a)	USD	125	61,250
7.80%,
6/01/12		340	184,287

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	13

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown
are based on Net Assets) |

Corporate Bonds	Par (000)		Value
Diversified
Financial Services (concluded)
General Electric Capital Corp.:
6.15%,
8/07/37	USD	4,620	$ 3,458,301
5.875%,
1/14/38		177	125,830
6.875%,
1/10/39		135	109,248
JPMorgan Chase & Co., 6%, 1/15/18		125	120,827
Structured Asset Repackaged Trust, 1.633%, 1/21/10		1,028	873,537
			7,964,923
Diversified
Telecommunication Services6.4%
AT&T, Inc.:
6.45%,
6/15/34		780	716,033
6.30%,
1/15/38		600	538,999
6.55%,
2/15/39		3,375	3,132,003
BellSouth Telecommunications, Inc., 7.446%, 12/15/95 (f)		1,700	663,895
Cincinnati Bell, Inc., 7.25%, 7/15/13		210	200,550
Comcast Cable Holdings LLC, 7.875%, 8/01/13		10	10,344
Qwest Communications International, Inc.:
7.50%,
2/15/14		120	101,700
Series B,
7.50%, 2/15/14		60	50,850
Qwest Corp., 5.246%, 6/15/13 (a)		470	398,325
Telecom Italia Capital SA:
4.95%,
9/30/14		1,075	926,071
6%, 9/30/34		1,550	1,107,024
Telefonica Emisiones SAU, 7.045%, 6/20/36		1,975	2,013,378
Telefonica Europe BV, 7.75%, 9/15/10		725	761,785
Verizon Communications, Inc.:
6.40%,
2/15/38 (c)		2,125	1,993,775
8.95%,
3/01/39		900	1,061,608
Verizon Global Funding Corp., 7.75%, 12/01/30		70	71,964
Verizon Maryland, Inc. Series B, 5.125%, 6/15/33		125	90,554
Verizon New Jersey, Inc.:
5.875%,
1/17/12		335	336,189
7.85%,
11/15/29		230	219,042
Verizon Virginia, Inc. Series A, 4.625%, 3/15/13 (c)		3,150	3,025,581
Wind Acquisition Finance SA, 10.75%, 12/01/15 (d)		350	350,875
Windstream Corp.:
8.125%,
8/01/13		500	485,000
8.625%,
8/01/16		230	220,800
			18,476,345
Electric
Utilities5.5%
Alabama Power Co., 6%, 3/01/39		1,275	1,265,347
Duke Energy Carolinas LLC:
6.10%,
6/01/37		315	305,285
6%, 1/15/38		825	846,159
E.ON International Finance BV, 6.65%, 4/30/38 (d)		1,525	1,527,756
EDP Finance BV, 6%, 2/02/18 (d)		1,125	1,044,710
Edison Mission Energy, 7.50%, 6/15/13		115	105,513
Electricite de France SA, 6.95%, 1/26/39 (d)		1,400	1,407,788
Elwood Energy LLC, 8.159%, 7/05/26		110	88,414
Florida Power Corp.:
6.35%,
9/15/37		1,325	1,383,296
6.40%,
6/15/38		875	919,782
Florida Power & Light Co., 4.95%, 6/01/35		950	848,191
Midwest Generation LLC Series B, 8.56%, 1/02/16		75	74,193
PacifiCorp., 6.25%, 10/15/37		575	587,739
Public Service Co. of Colorado, 6.25%, 9/01/37		1,200	1,251,648
Southern California Edison Co.:
5.625%, 2/01/36		625	612,238
Series
05-E, 5.35%, 7/15/35		125	117,842
Series
08-A, 5.95%, 2/01/38		1,075	1,101,226
The Toledo Edison Co., 6.15%, 5/15/37		350	267,371
Virginia Electric and Power Co. Series A, 6%, 5/15/37		2,000	1,924,926
			15,679,424

Corporate Bonds	Par (000)		Value
Electronic
Equipment & Instruments0.1%
Sanmina-SCI Corp., 8.125%, 3/01/16	USD	600	$ 210,000
Energy
Equipment & Services0.4%
Compagnie Generale de Geophysique-Veritas:
7.50%,
5/15/15		55	43,038
7.75%,
5/15/17		90	69,750
North American Energy Partners, Inc., 8.75%, 12/01/11		45	35,438
Transocean, Inc., 6.80%, 3/15/38		1,100	1,005,194
			1,153,420
Food
& Staples Retailing1.6%
CVS Caremark Corp., 6.25%, 6/01/27		775	736,150
The Pantry, Inc., 7.75%, 2/15/14		1,000	755,000
Rite Aid Corp., 7.50%, 3/01/17		505	272,700
Wal-Mart Stores, Inc.:
6.50%,
8/15/37		1,900	2,034,222
6.20%,
4/15/38		850	881,573
			4,679,645
Food
Products0.5%
Kraft Foods, Inc., 7%, 8/11/37		1,455	1,465,675
Gas
Utilities0.2%
El Paso Natural Gas Co., 8.625%, 1/15/22		265	254,690
Targa Resources, Inc., 8.50%, 11/01/13		320	201,600
			456,290
Health
Care Equipment & Supplies0.4%
DJO Finance LLC, 10.875%, 11/15/14		1,380	1,048,800
Health
Care Providers & Services0.6%
Tenet Healthcare Corp., 6.50%, 6/01/12		1,020	907,800
UnitedHealth Group, Inc., 5.80%, 3/15/36		870	697,197
WellPoint, Inc., 5.95%, 12/15/34		85	68,988
			1,673,985
Hotels,
Restaurants & Leisure1.7%
American Real Estate Partners LP:
8.125%,
6/01/12		3,165	2,785,200
7.125%,
2/15/13		320	263,200
Circus and Eldorado Joint Venture, 10.125%, 3/01/12		1,000	620,000
Gaylord Entertainment Co., 6.75%, 11/15/14		150	95,250
Greektown Holdings, LLC, 10.75%, 12/01/13 (d)(e)		315	28,350
Harrahs Operating Co., Inc.:
10.75%,
2/01/18		650	39,935
10%,
12/15/18 (d)		151	42,280
McDonalds Corp., 5.70%, 2/01/39		825	821,384
Seneca Gaming Corp. Series B, 7.25%, 5/01/12		260	192,400
			4,887,999
Household
Durables0.6%
Belvoir Land LLC Series A-1, 5.27%, 12/15/47		350	215,383
Irwin Land LLC:
Series A-1,
5.03%, 12/15/25		525	384,206
Series A-2,
5.40%, 12/15/47		1,500	931,095
Ohana Military Communities LLC Series 04I,
6.193%,
4/01/49		350	272,213
			1,802,897
Household
Products0.3%
Kimberly-Clark, Corp., 6.625%, 8/01/37		850	907,422
IT
Services0.1%
iPayment, Inc., 9.75%, 5/15/14		240	141,600
iPayment Investors LP, 12.75%, 7/15/14 (d)(g)		962	240,386
			381,986
Independent
Power Producers & Energy Traders0.0%
NRG Energy, Inc.:
7.25%,
2/01/14		50	47,125
7.375%,
2/01/16		15	13,838
			60,963

See Notes to Financial Statements. — 14	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown
are based on Net Assets) |

Corporate Bonds	Par (000)		Value
Industrial
Conglomerates0.1%
Sequa Corp. (d):
11.75%,
12/01/15	USD	690	$ 110,400
13.50%,
12/01/15 (g)		1,699	201,998
			312,398
Insurance2.4%
Chubb Corp., 6%, 5/11/37		1,100	962,897
Hartford Life Global Funding Trusts (a):
1.49%,
9/15/09		925	887,218
1.50%,
6/16/14		425	302,017
MetLife, Inc., 5.70%, 6/15/35		1,525	1,210,379
Metropolitan Life Global Funding I, 4.25%, 7/30/09 (d)		1,150	1,146,870
Monument Global Funding Ltd., 0.641%, 6/16/10 (a)		1,810	1,673,323
Prudential Financial, Inc.:
5.70%,
12/14/36		675	412,289
Series D,
5.90%, 3/17/36		500	318,250
			6,913,243
Machinery0.3%
AGY Holding Corp., 11%, 11/15/14		360	216,000
Accuride Corp., 8.50%, 2/01/15		265	79,500
Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (d)		950	522,500
			818,000
Marine0.3%
Nakilat, Inc. Series A, 6.067%, 12/31/33 (d)		1,050	685,503
Navios Maritime Holdings, Inc., 9.50%, 12/15/14		141	84,600
			770,103
Media4.8%
Affinion Group, Inc., 10.125%, 10/15/13		695	538,624
CMP Susquehanna Corp., 9.875%, 5/15/14		645	19,350
COX Communications, Inc., 8.375%, 3/01/39 (d)		850	817,129
Cablevision Systems Corp. Series B, 8.334%, 4/01/09 (a)		180	180,000
Charter Communications Holdings II, LLC (e):
10.25%,
9/15/10		590	474,950
Series B,
10.25%, 9/15/10		120	96,000
Comcast Cable Holdings LLC 7.125%, 2/15/28		200	175,502
Comcast Corp.:
6.50%,
1/15/17		1,750	1,700,346
6.50%,
11/15/35		625	541,407
6.45%,
3/15/37		790	678,351
6.95%,
8/15/37		25	22,887
DirecTV Holdings LLC, 8.375%, 3/15/13		125	126,250
EchoStar DBS Corp.:
7%,
10/01/13		43	40,098
7.125%,
2/01/16		75	67,688
Local Insight Regatta Hldgs, Inc., 11%, 12/01/17		823	197,520
Network Communications, Inc., 10.75%, 12/01/13		155	24,025
News America Holdings, Inc.:
7.70%,
10/30/25		825	737,968
8.45%,
8/01/34		625	585,754
News America, Inc., 7.625%, 11/30/28		985	854,935
Nielsen Finance LLC, 10%, 8/01/14		935	771,375
Rainbow National Services LLC (d):
8.75%,
9/01/12		200	200,250
10.375%,
9/01/14		943	965,396
TCI Communications, Inc., 7.875%, 2/15/26		610	581,282
TL Acquisitions, Inc., 10.50%, 1/15/15 (d)		1,200	564,000
Time Warner Cable, Inc., 7.30%, 7/01/38		2,525	2,303,416
Time Warner Cos., Inc.:
6.95%,
1/15/28		70	62,367
6.625%,
5/15/29		90	77,410
Time Warner, Inc.:
7.625%,
4/15/31		205	192,336
7.70%,
5/01/32		85	80,316
			13,676,932

Corporate Bonds	Par (000)		Value
Metals & Mining0.9%
AK Steel Corp., 7.75%, 6/15/12	USD	515	$ 442,900
Falconbridge Ltd.:
6%,
10/15/15		825	602,824
6.20%,
6/15/35		1,250	751,955
Freeport-McMoRan Copper & Gold, Inc., 7.084%, 4/01/15 (a)		490	366,275
Steel Dynamics, Inc., 7.375%, 11/01/12		80	69,200
Teck Cominco Ltd., 6.125%, 10/01/35		610	292,800
			2,525,954
Multi-Utilities0.4%
Energy East Corp., 6.75%, 7/15/36		1,500	1,101,498
Oil, Gas & Consumable Fuels6.1%
Anadarko Petroleum Corp., 6.45%, 9/15/36		2,350	1,794,551
Berry Petroleum Co., 8.25%, 11/01/16		140	71,400
Burlington Resources Finance Co., 7.40%, 12/01/31		875	921,601
Canadian Natural Resources Ltd.:
6.50%,
2/15/37		410	317,799
6.25%,
3/15/38		375	279,999
6.75%,
2/01/39		1,025	817,182
Chesapeake Energy Corp., 6.375%, 6/15/15		150	122,625
Compton Petroleum Finance Corp., 7.625%, 12/01/13		115	38,525
Conoco Funding Co., 7.25%, 10/15/31		125	130,990
ConocoPhillips Canada Funding Co., 5.95%, 10/15/36		535	496,780
ConocoPhillips Holding Co., 6.95%, 4/15/29		650	660,536
Devon Energy Corp., 7.95%, 4/15/32		625	656,998
EXCO Resources, Inc., 7.25%, 1/15/11		130	103,838
EnCana Corp.:
6.50%,
8/15/34		670	537,963
6.625%,
8/15/37		700	583,470
6.50%,
2/01/38		325	271,128
Encore Acquisition Co., 6%, 7/15/15		40	31,000
Marathon Oil Corp., 7.50%, 2/15/19		1,050	1,019,975
MidAmerican Energy Co., 5.80%, 10/15/36		700	642,884
MidAmerican Energy Holdings Co.:
5.95%,
5/15/37		800	716,454
6.50%,
9/15/37		1,900	1,832,026
Nexen, Inc., 6.40%, 5/15/37		550	388,145
OPTI Canada, Inc., 8.25%, 12/15/14		450	153,000
Sabine Pass LNG LP, 7.50%, 11/30/16		330	221,925
Shell International Finance B.V., 6.375%, 12/15/38		1,425	1,483,362
Valero Energy Corp., 6.625%, 6/15/37		495	377,943
Whiting Petroleum Corp.:
7.25%,
5/01/12		20	16,800
7.25%,
5/01/13		335	273,025
XTO Energy, Inc.:
6.75%,
8/01/37		1,925	1,717,096
6.375%,
6/15/38		900	761,038
			17,440,058
Paper & Forest Products0.2%
Bowater, Inc., 4.32%, 3/15/10 (a)		80	14,400
NewPage Corp., 10%, 5/01/12		1,625	491,563
			505,963
Pharmaceuticals2.7%
Abbott Laboratories, 5.125%, 4/01/19		690	687,011
Eli Lilly & Co., 5.55%, 3/15/37		2,275	2,160,340
Roche Holdings, Inc., 7%, 3/01/39 (d)		850	890,690
Schering-Plough Corp., 6.55%, 9/15/37		1,125	1,112,792
Teva Pharmaceutical Finance LLC, 6.15%, 2/01/36		1,445	1,317,224
Wyeth:
6%, 2/15/36		675	691,400
5.95%,
4/01/37		925	940,196
			7,799,653

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	15

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown
are based on Net Assets) |

Corporate Bonds	Par (000)		Value
Professional
Services0.0%
FTI Consulting, Inc., 7.75%, 10/01/16	USD	100	$ 98,750
Road
& Rail0.1%
Canadian National Railway Co., 6.25%, 8/01/34		350	344,072
Software0.8%
BMS Holdings, Inc., 9.224%, 2/15/12 (a)(d)(g)		113	27,076
Oracle Corp., 5.75%, 4/15/18 (c)		2,225	2,249,998
			2,277,074
Specialty
Retail0.5%
General Nutrition Centers, Inc.:
6.404%,
3/15/14 (a)(g)		500	295,000
10.75%,
3/15/15		360	252,000
Lazy Days R.V. Center, Inc., 11.75%, 5/15/12 (e)		310	24,800
Michaels Stores, Inc.:
10%,
11/01/14		380	129,675
11.375%,
11/01/16		110	25,988
Sonic Automotive, Inc. Series B, 8.625%, 8/15/13		2,100	651,000
			1,378,463
Textiles,
Apparel & Luxury Goods0.0%
Quiksilver, Inc., 6.875%, 4/15/15		175	87,500
Wireless
Telecommunication Services1.1%
Cricket Communications, Inc., 9.375%, 11/01/14		100	91,250
Digicel Group Ltd. (d):
8.875%,
1/15/15		240	178,800
9.125%,
1/15/15 (g)		560	392,000
MetroPCS Wireless, Inc., 9.25%, 11/01/14		80	75,600
Nordic Telephone Co. Holdings ApS, 8.875%, 5/01/16 (d)		770	700,700
Rogers Communications, Inc., 7.50%, 8/15/38		1,150	1,158,808
Sprint Capital Corp., 6.875%, 11/15/28		915	505,538
			3,102,696
Total Corporate Bonds51.0%			146,082,810
Foreign Government Obligations
Israel Government AID Bond:
5.50%,
4/26/24		825	894,671
5.50%,
9/18/33		845	983,207
Italy Government International Bond, 5.375%, 6/15/33		455	445,300
Total Foreign Government Obligations0.8%			2,323,178
U.S. Government Agency Mortgage-Backed
Securities
Fannie Mae Guaranteed Pass Through Certificates:
4.50%,
3/15/39 (i)		7,300	7,313,688
5.00%,
3/01/213/15/39 (c)(h)(i)		14,085	14,344,825
5.50%,
3/15/244/01/36 (h)(j)		39,297	40,347,909
6.00%,
8/01/293/15/39		4,965	5,128,587
6.50%,
3/15/39		200	209,125
7.00%,
1/01/317/01/32		190	203,609
Freddie Mac Mortgage Participation Certificates:
5.00%,
8/01/33		67	68,148
5.50%,
11/01/343/15/39 (h)		3,940	4,042,260
6.00%,
2/01/133/15/39 (h)		2,514	2,626,107
7.00%,
9/01/31		18	19,251
Ginnie Mae MBS Certificates, 5.50%, 8/15/33		188	194,253
Total U.S. Government Agency
Mortgage-Backed Securities26.0%			74,497,762

U.S. Government Agency Mortgage-Backed SecuritiesCollateralized Mortgage Obligations	Par (000)		Value
Fannie Mae
Trust:
Series 378
Class 5, 5%, 7/01/36 (b)	USD	3,785	$ 442,327
Series
2004-90 Class JH, 6.226%, 11/25/34 (a)(b)		19,231	1,554,979
Series
2005-5 Class PK, 5%, 12/25/34		2,063	2,132,206
Freddie Mac
Multiclass Certificates:
Series 2579
Class HI, 5%, 8/15/17 (b)		1,553	130,553
Series 2611
Class QI, 5.50%, 9/15/32 (b)		4,818	443,820
Series 2825
Class VP, 5.50%, 6/15/15		1,116	1,170,524
Total U.S. Government Agency
Mortgage-Backed Securities Collateralized Mortgage Obligations2.0%			5,874,409
Non-U.S. Government Agency Mortgage-Backed
Securities
Collateralized Mortgage
Obligations7.7%
Banc of
America Funding Corp. Series 2007-2 Class 1A2, 6%, 3/25/37		1,100	312,300
Bear
Stearns Adjustable Rate Mortgage Series 2004-8 Class 14A1, 5.476%, 11/25/34 (a)		745	651,739
CS First
Boston Mortgage Securities Corp., Series 2005-12 Class 6A1, 6%, 1/25/36		1,187	632,608
Citicorp
Mortgage Securities, Inc. Series 2006-5 Class 1A3, 6%, 10/25/36		1,100	717,417
Citigroup
Mortgage Loan Trust, Inc. Series 2005-4 Class A, 5.344%, 8/25/35 (a)		698	520,087
Citigroup
Mortgage Securities, Inc. Series 2006-5 Class 1A2, 6%, 10/25/36		1,281	1,187,811
Countrywide
Alternative Loan Trust:
Series
2005-64CB Class 1A15, 5.50%, 12/25/35		1,600	518,279
Series
2006-0A19 Class A1, 0.65%, 2/20/47 (a)		518	209,265
Series
2006-0A21 Class A1, 0.66%, 3/20/47 (a)		958	387,704
Series
2007-HY4 Class 4A1, 5.924%, 6/25/47 (a)		1,177	500,506
Countrywide
Home Loan Mortgage Pass-Through Trust:
Series
2006-0A5 Class 2A1, 0.674%, 4/25/46 (a)		423	173,570
Series
2007-10 Class A22, 6%, 7/25/37		1,204	541,983
Credit
Suisse Mortgage Capital Certificates Series 2007-1 Class 5A14, 6%, 2/25/37		895	610,412
Deutsche
Alt-A Securities, Inc. Alternate Loan Trust:
Series
2003-3 Class 2A1, 5.50%, 10/25/33		1,294	1,106,159
Series
2006-0A1 Class A1, 0.674%, 2/25/47 (a)		338	137,969
GSR
Mortgage Loan Trust:
Series
2005-AR4 Class 6A1, 5.25%, 7/25/35 (a)		699	480,517
Series
2006-0A1 Class 2A1, 0.664%, 8/25/46 (a)		990	547,873
Series
2006-4F Class 1A1, 5%, 5/25/36		1,088	616,983
Series
2006-AR1 Class 2A1, 5.18%, 1/25/36 (a)		1,017	641,514
Series
2007-4F Class 3A1, 6%, 7/25/37		1,297	927,465
Homebanc
Mortgage Trust Series 2006-2 Class A1, 0.654%, 12/25/36 (a)		1,025	459,097
Indymac
IMJA Mortgage Loan Trust Series 2007-A1 Class A4, 6%, 8/25/37		1,100	506,000
JPMorgan
Mortgage Trust:
Series
2006-S3 Class 1A12, 6.50%, 8/25/36		1,311	965,131
Series
2007-S1 Class 2A22, 5.75%, 3/25/37		1,045	686,379
Series
2007-S2 Class 1A15, 6.75%, 6/25/37		1,191	753,638
Maryland
Insurance Backed Securities Trust Series 2006-1A Class, 5.55%, 12/10/65		2,500	1,125,000
Merrill
Lynch Mortgage Investors, Inc. Series 2006-A3 Class 3A1, 5.823%, 5/25/36 (a)(k)		998	497,465
Residential
Funding Mortgage Securities I Series 2007-S6 Class 1A16, 6%, 6/25/37		857	711,873
Structured
Asset Securities Corp. Series 2002-AL1 Class A2, 3.45%, 2/25/32		2,008	1,277,675
WaMu
Mortgage Pass-Through Certificates (a):
Series
2005-AR10 Class 1A3, 4.831%, 9/25/35		1,800	867,633
Series
2007-0A4 Class 1A, 2.593%, 5/25/47		487	190,877
Series
2007-0A5 Class 1A, 3.005%, 6/25/47		423	175,897

See Notes to Financial Statements. — 16	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

| Non-U.S. Government Agency
Mortgage-Backed Securities | | | Value |
| --- | --- | --- | --- |
| Collateralized Mortgage Obligations
(concluded) | | | |
| Wells Fargo
Mortgage Backed Securities Trust: | | | |
| Series
2006- Class 1A29, 6%, 8/25/36 | USD | 858 | $ 708,278 |
| Series
2006-3 Class A9, 5.50%, 3/25/36 | | 810 | 657,741 |
| Series
2007-8 Class 2A9, 6%, 7/25/37 | | 861 | 694,049 |
| Series
2007-10 Class 1A21, 6%, 7/25/37 | | 1,046 | 538,806 |
| | | | 22,237,700 |
| Commercial Mortgage-Backed
Securities17.3% | | | |
| Bank of
America Commercial Mortgage, Inc. Series 2005-1 Class 4A, 4.988%, 11/10/42 (a) | | 2,180 | 1,810,323 |
| Bear
Stearns Commercial Mortgage Securities Series 2005-PWR9 Class A2, 4.735%, 9/11/42 | | 4,895 | 4,478,399 |
| CS First
Boston Mortgage Securities Corp., Series 2002-CP5 Class A2, 4.94%, 12/15/35 | | 2,720 | 2,473,870 |
| Citigroup
Commercial Mortgage Trust Series 2008-C7 Class A4, 6.096%, 12/10/49 (a) | | 1,370 | 882,833 |
| Citigroup/Deutsche
Bank Commercial Mortgage Trust Series 2007-CD5 Class A4, 5.886%, 11/15/44 (a) | | 2,500 | 1,617,263 |
| Commercial
Mortgage Pass-Through Certificates Series 2004-LB3A Class A3, 5.09%, 7/10/37 (a) | | 960 | 860,203 |
| Crown
Castle Towers LLC Series 2005-1A: | | | |
| Class AFL,
0.841%, 6/15/35 (a) | | 3,075 | 2,798,250 |
| Class AFX,
4.643%, 6/15/35 | | 855 | 816,525 |
| First Union
National Bank Commercial Mortgage: | | | |
| Series
2001-C3 Class A3, 6.423%, 8/15/33 | | 2,845 | 2,779,705 |
| Series
2001-C4 Class A2, 6.223%, 12/12/33 | | 2,265 | 2,193,089 |
| GMAC
Commercial Mortgage Securities, Inc., Class A2: | | | |
| Series
1999-C3, 7.179%, 8/15/36 (a) | | 1,134 | 1,131,369 |
| Series
2002-C3, 4.93%, 7/10/39 | | 2,350 | 2,137,490 |
| Global
Signal Trust Series 2006-1 Class A2, 5.45%, 2/15/36 | | 480 | 448,800 |
| Heller
Financial Commercial Mortgage Asset Series 1999-PH1 Class A2, 6.847%, 5/15/31 (a) | | 18 | 17,832 |
| JPMorgan
Chase Commercial Mortgage Securities Corp.: | | | |
| Series 2001-C1
Class A3, 5.857%, 10/12/35 | | 2,140 | 2,054,601 |
| Series
2004-CB8 Class A1A, 4.158%, 1/12/39 | | 858 | 674,718 |
| Series
2004-CBX Class A4, 4.529%, 1/12/37 | | 2,180 | 1,792,885 |
| JPMorgan
Commercial Mortgage Finance Corp. Series 2000-C10 Class A2, 7.371%, 8/15/32 (a) | | 1,556 | 1,554,750 |
| LB-UBS
Commercial Mortgage Trust: | | | |
| Series
2005-C5 Class A4, 4.954%, 9/15/30 | | 4,375 | 3,289,397 |
| Series
2007-C6 Class A4, 5.858%, 7/15/40 (a) | | 931 | 549,241 |
| Series
2007-C7 Class A3, 5.866%, 9/15/45 (a) | | 5,000 | 2,929,958 |
| Merrill
Lynch Mortgage Trust (a)(k): | | | |
| Series
2004BPC1 Class A3, 4.467%, 10/12/41 | | 4,200 | 3,433,476 |
| Series
2007-C1 Class AM, 5.829%, 6/12/50 | | 925 | 350,078 |
| Morgan
Stanley Capital I: | | | |
| Series
2005-HQ6 Class A4A, 4.989%, 8/13/42 | | 1,475 | 1,111,257 |
| Series
2005-T17 Class A4, 4.52%, 12/13/41 | | 2,555 | 2,271,908 |
| Salomon
Brothers Mortgage Securities VII, Inc. Series | | | |
| 2000-C1
Class A2, 7.52%, 12/18/09 (a) | | 2,959 | 2,955,895 |
| Wachovia
Bank Commercial Mortgage Trust (a): | | | |
| Series
2005-C21 Class A3, 5.209%, 10/15/44 | | 910 | 832,090 |
| Series
2006-C25 Class A4, 5.74%, 5/15/43 | | 1,190 | 817,450 |
| Series
2007-C33 Class A4, 5.902%, 2/15/51 | | 995 | 502,804 |
| | | | 49,566,459 |
| Total Non-U.S. Government Agency Mortgage-Backed
Securities25.0% | | | 71,804,159 |

U.S. Government Obligations
Fannie Mae:
6.348%,
10/09/19 (l)	5,875	3,093,117
7.125%,
1/15/30 (j)	2,775	3,777,691
5.625%,
7/15/37 (i)	775	872,979

U.S. Government Obligations			Value
Federal
Home Loan Banks:
5.375%,
9/30/22 (j)	USD	5,400	$ 5,804,282
5.25%,
12/09/22 (i)		675	731,713
5.365%,
9/09/24 (j)		1,075	1,184,981
Federal
Housing Administration, Hebre Home Hospital, 6.25%, 9/01/28		995	985,291
Federal
National Mortgage Association, 1.75%, 3/23/11 (k)		4,375	4,381,380
Freddie
Mac, 5.50%, 8/23/17 (j)		2,425	2,748,577
Resolution
Funding Corp. (l):
6.288%,
7/15/18		525	352,587
6.296%,
10/15/18		525	349,289
U.S.
Treasury Bonds, 6.125%, 11/15/27 (j)		1,440	1,842,075
U.S.
Treasury Inflation Indexed Bonds:
2.375%,
1/15/25		324	310,323
2.375%,
1/15/27 (j)		1,601	1,538,821
U.S.
Treasury Notes:
3.75%,
11/15/18		655	694,045
4.50%,
5/15/38		660	749,306
3.50%,
2/15/39		500	480,080
Total U.S. Government
Obligations10.4%			29,896,537

Preferred Securities
Capital Trusts
Capital Markets0.1%
Credit
Suisse Guernsey Ltd., 5.86% (a)(m)	494	161,326
Commercial Banks0.7%
BAC Capital
Trust XI, 6.625%, 5/23/36 (i)	545	260,777
Barclays
Bank Plc, 7.434% (a)(d)(m)	1,500	565,407
RBS Capital
Trust IV, 2.259% (a)(m)	475	67,837
Royal Bank
of Scotland Group Plc Series MTN, 7.64% (a)(m)	2,200	286,000
Wells Fargo
& Co. Series K, 7.98% (a)(m)	1,570	785,000
		1,965,021
Electric Utilities0.2%
PECO Energy
Capital Trust IV, 5.75%, 6/15/33	790	575,413
Insurance0.8%
The
Allstate Corp., 6.50%, 5/15/57 (a)	1,950	1,111,500
American
International Group, Inc., 8.175%, 5/15/58 (a)(d)	325	51,927
Lincoln
National Corp., 6.05%, 4/20/67 (a)	675	256,500
Progressive
Corp., 6.70%, 6/15/37 (a)	605	328,739
The
Travelers Cos., Inc., 6.25%, 3/15/67 (a)	675	407,491
ZFS Finance
(USA) Trust V, 6.50%, 5/09/67 (a)(d)	675	266,625
		2,422,782
Total Capital Trusts1.8%		5,124,542

Other Interests (n)
Health Care Providers &
Services0.0%
Critical
Care Systems International, Inc.	USD	1,895	381
Total Other Interests0.0%			381
Total Long-Term Investments (Cost$415,003,470)125.0%			358,435,733

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	17

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

Options Purchased		Value
Over-the-Counter Call Swaptions Purchased
Receive a
fixed rate of 5.47% and pay a floating rate based on 3-month LIBOR, expiring May 2012, Broker Bank of America, NA	11	$ 1,563,318
Receive a
fixed rate of 4.88% and pay a floating rate based on 3-month LIBOR, expiring September 2013, Broker Goldman Sachs Bank USA	25	1,474,408
Pay a fixed
rate of 4.705% and receive a floating rate based on the 3-month LIBOR, expiring November 2013, Broker JPMorgan Chase Bank, NA	12	653,042
		3,690,768
Over-the-Counter Put Swaptions Purchased
Pay a fixed
rate of 5.50% and receive a floating rate based 3-month LIBOR, expiring December 2009, Broker Bank of America, NA	3	58,191
Pay a fixed
rate of 5.47% and receive a floating rate based 3-month LIBOR, expiring May 2012, Broker Bank of America, NA	11	342,306
Pay a fixed
rate of 4.88% and receive a floating rate based on 3-month LIBOR, expiring September 2013, Broker Goldman Sachs Bank USA	25	709,032
Pay a fixed
rate of 4.705% and receive a floating rate based on the 3-month LIBOR, expiring November 2013, Broker JPMorgan Chase Bank, NA	12	379,237
		1,488,766
Total Options Purchased (Cost$3,645,960)1.8%		5,179,534
Total Investments Before TBA Sale
Commitments and Options Written (Cost$418,649,430*)126.8%		363,615,267

TBA Sale Commitments (h)
Fannie Mae
Guaranteed Pass Through Certificates:
5%, 3/15/39	USD	(8,137	)	(8,276,866	)
5.50%,
3/01/213/15/39		(19,800	)	(20,282,625	)
Freddie Mac
Mortgage Participation Certificates,
5.50%,
8/01/33		(3,900	)	(3,993,842	)
Ginnie Mae
MBS Certificates, 5.50%, 8/15/33		(100	)	(102,531	)
Total TBA Sale Commitments (Proceeds$32,650,277)(11.4)%				(32,655,864	)

Options Written		Value
Over-the-Counter Call Swaptions Written
Pay a fixed
rated of 5.485% and receive a floating rate based on 3-month LIBOR, expiring October 2009, Broker JPMorgan Chase Bank, NA	5	$ (758,669	)
Pay a fixed
rated of 2.45% and receive a floating rate based on 3-month LIBOR, expiring December 2009, Broker Barclays Bank, PLC	11	(119,837	)
Pay a fixed
rated of 1.99% and receive a floating rate based on 3-month LIBOR, expiring December 2009, Broker Citibank, NA	8	(101,590	)
Pay a fixed
rated of 5.67% and receive a floating rate based on 3-month LIBOR, expiring January 2010, Broker Citibank, NA	11	(2,060,305	)
Pay a fixed
rate of 4.915% and receive a floating rate based on 3-month LIBOR, expiring November 2010, Broker Barclays Bank, PLC	15	(1,740,885	)
Pay a fixed
rate of 5.05% and receive a floating rate based on 3-month LIBOR, expiring May 2011, Broker Citibank, NA	10	(1,201,720	)
Pay a fixed
rate of 5.08% and receive a floating rate based on 3-month LIBOR, expiring May 2011, Broker Goldman Sachs Bank USA	6	(744,645	)
Pay a fixed
rate of 5.325% and receive a floating rate based on 3-month LIBOR, expiring July 2013, Broker JPMorgan Chase Bank, NA	9	(629,951	)
		(7,357,602	)
Over-the-Counter Put Swaptions Written
Receive a
fixed rate of 5.485% and pay a floating rate based on 3-month LIBOR, expiring October 2009, Broker JPMorgan Chase Bank, NA	5	(26,185	)
Receive a
fixed rated of 2.45% and pay a floating rate based on 3-month LIBOR, expiring December 2009, Broker Barclays Bank, PLC	11	(1,129,884	)
Receive a
fixed rate of 5.67% and pay a floating rate based on 3-month LIBOR, expiring January 2010, Broker Citibank, NA	11	(76,590	)
Receive a
fixed rate of 4.915% and pay a floating rate based on 3-month LIBOR, expiring November 2010, Broker Barclays Bank, PLC	15	(417,345	)
Receive a
fixed rate of 5.05% and pay a floating rate based on 3-month LIBOR, expiring May 2011, Broker Citibank, NA	10	(310,900	)
Receive a
fixed rate of 5.08% and pay a floating rate based on 3-month LIBOR, expiring May 2011, Broker Goldman Sachs Bank USA	6	(184,037	)
		(2,144,941	)
Total Options Written (Premiums Received$6,422,598)(3.3)%		(9,502,543	)
Total Investments, Net of TBA Sale
Commitments and Options Written112.1%		321,456,860
Liabilities in Excess of Other
Assets(12.1)%		(34,762,941	)
Net Assets100.0%		$ 286,693,919

See Notes to Financial Statements. — 18	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (continued) BlackRock Core Bond Trust (BHK)

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$
Gross unrealized appreciation	$ 6,965,523
Gross unrealized depreciation	(62,129,716	)
Net unrealized depreciation	$ (55,164,193	)

(a)	Variable rate security. Rate shown is as of report date.
(b)	Represents the interest only portion of mortgage-backed
security and has either a nominal or notional amount of principal.
(c)	All or a portion of the security has been pledged as
collateral for swaps.
(d)	Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt
from registration to qualified institutional investors.
(e)	Issuer filed for bankruptcy and/or is in default of
interest payments.
(f)	Represents a step-up bond. Rate shown is as of report
date.
(g)	Represents a payment-in-kind security which may pay
interest/dividends in additional par/shares.
(h)	Represents or includes a to-be-announced transaction. The
Trust has committed to purchasing (selling) securities for which all specific
information is not available at this time.

| Counterparty — Barclays Capital Plc | Market
Value — $ 4,600,000 | | Unrealized Appreciation (Depreciation) — $ 3,811 | |
| --- | --- | --- | --- | --- |
| Citigroup NA | $ (5,426,844 | ) | $ (19,097 | ) |
| Credit Suisse International | $ 302,406 | | $ 2,031 | |
| Deutsche Bank AG | $ (4,696,499 | ) | $ 8,232 | |
| JPMorgan Chase Bank | $ (12,603,740 | ) | $ 23,654 | |
| Morgan Stanley Capital Services, Inc. | $ 7,300,000 | | $ (49,902 | ) |

| (i) | All or a portion of the security has been pledged as
collateral in connection with open financial futures contracts. |
| --- | --- |
| (j) | All or a portion of the security has been pledged as
collateral for reverse repurchase agreements. |
| (k) | Investments in companies considered to be an affiliate of
the Trust during the period September 1, 2008 to December 31, 2008 for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows: |

Affiliate	Purchase Cost	Sale Cost	Realized Gain	Income
BlackRock
Liquidity Funds, Temp Fund	$ 32,540,000	$ 32,540,000		$ 6,482
Merrill
Lynch Mortgage Investors, Inc. Series 2006-A3 Class 3A1, 5.823%, 5/25/36		$ 25,089	$ 11,657	$ 19,752
Merrill
Lynch Mortgage Trust Series 2004BPC1 Class A3, 4.467%, 10/12/41	$ 3,067,116			$ 18,745
Merrill
Lynch Mortgage Trust Series 2007-C1 Class AM, 5.829%, 6/12/50				$ 18,266

| (l) | Represents a zero-coupon bond. Rate shown reflects the
current yield as of the report date. |
| --- | --- |
| (m) | Security is perpetual in nature and has no stated maturity
date. |
| (n) | Other interests represent beneficial interest in
liquidation trusts and other reorganization entities and are non-income
producing. |
| (o) | One contract represents a notional amount of $1,000,000. |
| | For Trust compliance purposes, the Trusts industry
classifications refer to any one or more of the industry sub-classifications
used by one or more widely recognized market indexes or ratings group
indexes, and/or as defined by Trust management. This definition may not apply
for purposes of this report, which may combine industry sub-classifications
for reporting ease. |
| | Reverse repurchase agreements outstanding as of February
28, 2009 were as follows: |

Counterparty	Interest Rate	Trade Date	Maturity Date
Credit
Suisse Securities (USA), Inc.	0.65%	2/12/09	3/12/09	$ 36,190,287	$ 36,172,000
Barclays
Capital, Inc.	0.20%	12/11/08	Open	5,954,323	5,951,678
Barclays
Capital, Inc.	0.12%	1/06/09	Open	1,994,766	1,994,400
Barclays
Capital, Inc.	0.28%	1/23/09	Open	1,472,082	1,471,681
Barclays
Capital, Inc.	0.30%	1/23/09	Open	3,793,109	3,792,003
Barclays
Capital, Inc.	0.35%	2/27/09	3/02/09	1,940,057	1,940,000
JPMorgan
Securities, Inc.	0.38%	2/02/09	Open	1,176,036	1,175,701
JPMorgan
Securities, Inc.	0.31%	2/09/09	Open	2,714,375	2,713,908
Total				$ 55,235,035	$ 55,211,371

Foreign currency exchange contracts as of February 28, 2009 were as follows:

Currency Purchased — USD	256,960	Currency Sold — EUR	196,000	Deutsche Bank AG	3/18/09	Unrealized Appreciation — $ 8,521
USD	833,974	GBP	570,000	UBS AG	3/18/09	18,034
Total						$ 26,555

Financial futures contracts purchased as of February 28, 2009 were as follows:

Contracts	Issue	Exchange	Expiration Date	Face Value	Unrealized Appreciation (Depreciation)
102	10-Year U.S. Treasury Bond	Chicago	June 2009	$ 12,234,445	$ 8,743
1,060	30-Year U.S. Treasury Bond	Chicago	June 2009	$ 134,323,147	(3,578,772	)
39	Long Gilt	London	June 2009	$ 6,774,094	(118,322	)
Total					$ (3,688,351	)

Financial futures contracts sold as of February 28, 2009 were as follows:

Contracts	Issue	Exchange	Expiration Date	Face Value	Unrealized Appreciation (Depreciation)
679	2-Year U.S. Treasury Bond	Chicago	June 2009	$ 147,248,397	$ 170,631
1,436	2-Year U.S. Treasury Bond	Chicago	June 2009	$ 166,876,178	(541,229	)
Total					$ (370,598	)

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	19

Schedule of Investments (continued) BlackRock Core Bond Trust (BHK)

Interest rate swaps outstanding as of February 28, 2009 were as follows:

	Notional Amount (000)		Unrealized Appreciation (Depreciation)
Receive a fixed rate of 4.62377% and pay a floating rate based 3-month LIBOR
Broker, Credit Suisse International Expires September 2009	USD	50,000	$ 906,099
Receive a fixed rate of 2.895% and pay a floating rate based 3-month LIBOR
Broker, Barclays Bank, PLC Expires September 2010	USD	30,600	628,175
Pay a fixed rate of 2.898% and receive a floating based 3-month LIBOR
Broker, Deutsche Bank AG Expires September 2010	USD	19,600	(403,250	)
Receive a fixed rate of 2.7425% and pay a floating rate based 3-month LIBOR
Broker, Deutsche Bank AG Expires October 2010	USD	50,700	982,486
Receive a fixed rate of 2.745% and pay a floating rate based 3-month LIBOR
Broker, Credit Suisse International Expires October 2010	USD	40,500	786,468
Receive a fixed rate of 5% and pay a floating rate based 3-month LIBOR
Broker, Deutsche Bank AG Expires November 2010	USD	4,600	262,490
Receive a fixed rate of 2.14% and pay a floating rate based 3-month LIBOR
Broker, Citibank, NA Expires December 2010	USD	40,000	375,232
Receive a fixed rate of 2.8225% and pay a floating rate based 3-month LIBOR
Broker, Citibank, NA Expires December 2010	GBP	31,491	262,566
Receive a fixed rate of 1.595% and pay a floating rate based 3-month LIBOR
Broker, Deutsche Bank AG Expires February 2011	USD	8,700	(9,636	)
Receive a fixed rate of 5.496% and pay a floating rate based 3-month LIBOR
Broker, Bank of America, NA Expires July 2011	USD	25,100	2,173,521
Receive a fixed rate of 4.856% and pay a floating rate based 3-month LIBOR
Broker, Deutsche Bank AG Expires October 2012	USD	9,400	841,868
Receive a fixed rate of 4.32% and pay a floating rate based 3-month LIBOR
Broker, Citibank, NA Expires October 2012	USD	10,500	751,957
Receive a fixed rate of 3.66375% and pay a floating rate based 3-month LIBOR
Broker, Citibank, NA Expires April 2013	USD	7,300	351,911
Receive a fixed rate of 4.2825% and pay a floating rate based 3-month LIBOR
Broker, Credit Suisse International Expires July 2013	USD	82,500	6,042,728
Interest rate swaps (continued)
		Notional Amount (000)	Unrealized Appreciation (Depreciation)
Receive a fixed rate of 3.78% and pay a floating rate based 3-month LIBOR
Broker, Morgan Stanley Capital Services Inc. Expires November 2013	USD	17,600	$ 917,748
Pay a fixed rate of 2.4625% and receive a floating based 3-month LIBOR
Broker, Citibank, NA Expires February 2014	USD	17,000	169,065
Pay a fixed rate of 4.50% and receive a floating based 3-month LIBOR
Broker, JPMorgan Chase Bank, NA Expires May 2015	USD	2,800	(252,551	)
Receive a fixed rate of 2.215% and pay a floating rate based 3-month LIBOR
Broker, Citibank, NA Expires January 2016	USD	12,500	(642,508	)
Pay a fixed rate of 5.04015% and receive a floating based 3-month LIBOR
Broker, Deutsche Bank AG Expires September 2017	USD	12,500	(1,703,116	)
Receive a fixed rate of 4.564% and pay a floating rate based 3-month LIBOR
Broker, Deutsche Bank AG Expires October 2018	USD	10,000	1,037,287
Receive a fixed rate of 4.0975% and pay a floating rate based 3-month LIBOR
Broker, Deutsche Bank AG Expires October 2018	USD	8,000	515,256
Pay a fixed rate of 5.01% and receive a floating based 3-month LIBOR
Broker, UBS AG Expires November 2018	USD	4,112	(453,289	)
Pay a fixed rate of 4.94% and receive a floating based 3-month LIBOR
Broker, Deutsche Bank AG Expires December 2018	USD	14,371	(1,533,283	)
Pay a fixed rate of 3.272% and receive a floating based 3-month LIBOR
Broker, JPMorgan Chase Bank NA Expires February 2019	USD	2,500	16,247
Receive a fixed rate of 5.411% and pay a floating rate based 3-month LIBOR
Broker, JPMorgan Chase Bank NA Expires August 2022	USD	8,545	1,779,263
Pay a fixed rate of 5.365% and receive a floating based 3-month LIBOR
Broker, Deutsche Bank AG Expires September 2027	USD	8,000	(2,026,510	)
Pay a fixed rate of 5.0605% and receive a floating based 3-month LIBOR
Broker, Goldman Sachs Bank USA Expires November 2037	USD	6,200	(1,792,148	)
Pay a fixed rate of 5.06276% and receive a floating based 3-month LIBOR
Broker, Citibank, NA Expires December 2037	USD	1,300	(375,839	)

| See Notes to Financial Statements. — 20 | SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

Schedule of Investments (concluded) BlackRock Core Bond Trust (BHK)

Interest rate swaps (concluded)	Notional Amount (000)		Unrealized Appreciation (Depreciation)
Pay a fixed rate of 4.8375% and receive a floating based 3-month LIBOR
Broker, Morgan Stanley Capital Services Inc. Expires January 2038	USD	6,000	$ (1,496,103	)
Receive a fixed rate of 5.29750% and pay a floating rate based 3-month LIBOR
Broker, Citibank, NA Expires February 2038	USD	700	233,867
Receive a fixed rate of 5.1575% and pay a floating rate based 3-month LIBOR
Broker, Citibank, NA Expires June 2038	USD	1,000	309,433
Pay a fixed rate of 4.57% and receive a floating based 3-month LIBOR
Broker, Deutsche Bank AG Expires September 2038	USD	5,600	(1,133,622	)
Total			$ 7,521,812


EUR	Euro
GBP	British Pound
USD	US Dollar


	Level 1 price quotations in active markets/exchanges for
identical securities
	Level 2 other observable inputs (including, but not
limited to: quoted prices for similar assets or liabilities in markets that
are not active, inputs other than quoted prices that are observable for the
assets or liabilities (such as interest rates, yield curves, volatilities,
prepayment speeds, loss severities, credit risks, and default rates) or other
market-corroborated inputs)
	Level 3 unobservable inputs based on the best
information available in the circumstance, to the extent observable inputs
are not available (including the Trusts own assumption used in determining the
fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trusts policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the inputs used as of February 28, 2009 in determining the fair valuation of the Trusts investments:

| Valuation Inputs | Investments
in Securities — Assets | Liabilities | | Other
Financial Instruments* — Assets | Liabilities | |
| --- | --- | --- | --- | --- | --- | --- |
| Level 1 | | | | $ 179,374 | $ (4,238,323 | ) |
| Level 2 | $ 351,987,103 | $ (87,867,235 | ) | 24,549,756 | (21,324,398 | ) |
| Level 3 | 6,448,630 | | | | | |
| Total | $ 358,435,733 | $ (87,867,235 | ) | $ 24,729,130 | $ (25,562,721 | ) |

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

The following is a reconciliation of investments for unobservable inputs (Level 3) were used in determining fair value:

| | Investments
in Securities | |
| --- | --- | --- |
| | Assets | |
| Balance as of August 31, 2008 | $ 637 | |
| Accrued discounts/premiums | 332 | |
| Realized gain | 37 | |
| Change in unrealized appreciation/depreciation 1 | (4,796,976 | ) |
| Net sales | (209,962 | ) |
| Net transfers in Level 3 | 11,454,562 | |
| Balance as of February 28, 2009 | $ 6,448,630 | |

1 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

| See Notes to Financial Statements. — SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 | 21 |
| --- | --- | --- |

| Schedule
of Investments February
28, 2009 (Unaudited) |
| --- |
| (Percentages shown are based on Net Assets) |

Corporate Bonds		Par (000)
Aerospace
& Defense0.0%
Hawker Beechcraft
Acquisition Co. LLC, 8.875%, 4/01/15 (a)	USD	255	$ 20,400
Airlines0.3%
Continental
Airlines, Inc.:
Series
1997-4-B, 6.90%, 7/02/18		125	90,555
Series
2001-1-C, 7.033%, 12/15/12		456	328,006
UAL Corp.,
4.50%, 6/30/21 (b)		535	244,121
			662,682
Auto Components1.4%
Allison
Transmission, Inc. (c):
11%,
11/01/15		1,160	562,600
11.25%,
11/01/15 (a)		1,725	664,125
The
Goodyear Tire & Rubber Co.:
7.857%,
8/15/11		2,150	1,720,000
8.625%,
12/01/11		197	157,600
Lear Corp.,
8.75%, 12/01/16		645	109,650
			3,213,975
Automobiles0.2%
Ford
Capital BV, 9.50%, 6/01/10		1,095	350,400
Ford Motor
Co., 8.90%, 1/15/32		1,100	187,000
			537,400
Building
Products0.8%
Momentive
Performance Materials, Inc., 11.50%, 12/01/16		2,430	510,300
Ply Gem
Industries, Inc., 11.75%, 6/15/13		2,905	1,336,300
			1,846,600
Capital Markets0.5%
E*Trade
Financial Corp., 12.50%, 11/30/17 (c)		2,380	1,094,800
Chemicals2.2%
American
Pacific Corp., 9%, 2/01/15		1,300	1,092,000
Innophos,
Inc., 8.875%, 8/15/14		1,185	942,075
MacDermid,
Inc., 9.50%, 4/15/17 (c)		2,500	987,500
Terra
Capital, Inc. Series B, 7%, 2/01/17		320	291,200
Wellman
Holdings, Inc. (b):
Second Lien
Subordinate Note, 10%, 1/29/19 (c)		1,385	1,385,000
Third Lien
Subordinate Note, 5%, 1/29/19		421	294,700
			4,992,475
Commercial Services &
Supplies3.5%
Sally
Holdings LLC, 9.25%, 11/15/14		315	300,038
US
Investigations Services, Inc., 10.50%, 11/01/15 (c)		1,000	795,000
Waste
Services, Inc., 9.50%, 4/15/14		4,425	3,495,750
West Corp.:
9.50%,
10/15/14		1,000	700,000
11%,
10/15/16		4,220	2,700,800
			7,991,588
Construction &
Engineering0.8%
Dycom
Industries, Inc., 8.125%, 10/15/15		2,625	1,876,875
Construction
Materials1.0%
Nortek,
Inc., 10%, 12/01/13		3,520	1,408,000
Texas
Industries, Inc., 7.25%, 7/15/13		1,160	823,600
			2,231,600

Corporate Bonds		Par (000)
Containers &
Packaging6.0%
Berry
Plastics Holding Corp., 5.871%, 9/15/14 (d)	USD	2,530	$ 1,176,450
Crown
European Holdings SA, 6.25%, 9/01/11	EUR	1,890	2,324,163
Graphic
Packaging International Corp.:
8.50%,
8/15/11	USD	1,825	1,606,000
9.50%,
8/15/13		1,525	1,136,125
Impress
Holdings BV, 4.219%, 9/15/13 (c)(d)		620	458,800
Owens-Brockway
Glass Container, Inc.:
8.25%,
5/15/13		1,500	1,515,000
6.75%,
12/01/14	EUR	610	688,261
Packaging
Dynamics Finance Corp., 10%, 5/01/16 (c)	USD	2,020	868,600
Pregis
Corp., 12.375%, 10/15/13		1,765	785,425
Rock-Tenn
Co., 8.20%, 8/15/11		2,950	2,950,000
Smurfit-Stone
Container Enterprises, Inc., 8%, 3/15/17 (e)		2,080	182,000
			13,690,824
Diversified Consumer
Services1.8%
Service
Corp. International, 7%, 6/15/17		4,425	4,026,750
Diversified Financial
Services3.1%
Axcan
Intermediate Holdings, Inc., 12.75%, 3/01/16		770	702,625
FCE Bank
Plc:
7.125%,
1/16/12	EUR	3,900	3,015,974
Series JD,
3.991%, 9/30/09 (d)		400	425,963
Ford Motor
Credit Co. LLC:
4.01%, 1/13/12
(d)	USD	310	151,900
7.80%,
6/01/12		300	162,607
GMAC LLC
(c):
7.25%,
3/02/11		569	393,025
3.461%,
12/01/14 (d)		1,322	581,680
Leucadia
National Corp., 8.125%, 9/15/15		2,000	1,660,000
			7,093,774
Diversified Telecommunication
Services5.9%
Broadview
Networks Holdings, Inc., 11.375%, 9/01/12		1,530	795,600
Cincinnati
Bell, Inc., 7.25%, 7/15/13		385	367,675
Qwest
Communications International, Inc.:
7.50%, 2/15/14		2,990	2,534,025
3.50%,
11/15/25 (b)		480	429,000
Series B,
7.50%, 2/15/14		2,715	2,300,962
Qwest
Corp.:
5.246%,
6/15/13 (d)		2,150	1,822,125
7.625%,
6/15/15		850	758,625
Windstream
Corp., 8.125%, 8/01/13		4,400	4,268,000
			13,276,012
Electric
Utilities2.6%
Edison
Mission Energy, 7.50%, 6/15/13		2,750	2,523,125
NSG
Holdings LLC, 7.75%, 12/15/25 (c)		1,530	1,224,000
Tenaska
Alabama Partners LP, 7%, 6/30/21 (c)		2,842	2,147,241
			5,894,366
Electrical
Equipment0.0%
UCAR
Finance, Inc., 10.25%, 2/15/12		92	82,800
Electronic Equipment &
Instruments0.1%
Sanmina-SCI
Corp., 8.125%, 3/01/16		835	292,250
Energy Equipment &
Services0.6%
Compagnie
Generale de Geophysique-Veritas:
7.50%,
5/15/15		305	238,663
7.75%,
5/15/17		470	364,250
North
American Energy Partners, Inc., 8.75%,
12/01/11		550	433,125
Transocean,
Inc. Series A, 1.625%, 12/15/37 (b)		490	436,713
			1,472,751
Food & Staples
Retailing0.7%
AmeriQual
Group LLC, 9.50%, 4/01/12 (c)		1,225	735,000
Rite Aid
Corp., 7.50%, 3/01/17		1,450	783,000
			1,518,000

See Notes to Financial Statements. — 22	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

| Schedule
of Investments (continued) |
| --- |
| (Percentages shown are based on Net Assets) |

Corporate Bonds		Par (000)
Food Products0.5%
Tyson
Foods, Inc., 10.50%, 3/01/14 (c)	USD	1,250	$ 1,178,125
Health Care Equipment &
Supplies3.1%
Catalent
Pharma Solutions, Inc., 9.50%, 4/15/15 (a)		1,500	510,000
DJO Finance
LLC:
10.875%,
11/15/14		7,500	5,700,000
11.75%,
11/15/14		130	85,150
Hologic,
Inc., 2%, 12/15/37 (b)(g)		1,285	835,250
			7,130,400
Health Care Providers &
Services1.7%
Community
Health Systems, Inc., 8.875%, 7/15/15		355	335,919
Tenet
Healthcare Corp.:
6.375%,
12/01/11		515	458,350
6.50%,
6/01/12		3,410	3,034,900
			3,829,169
Hotels, Restaurants &
Leisure5.8%
American
Real Estate Partners LP, 7.125%, 2/15/13		4,430	3,643,675
Galaxy
Entertainment Finance Co. Ltd. (c):
7.323%,
12/15/10 (d)		425	318,750
9.875%,
12/15/12		850	459,000
Gaylord Entertainment
Co., 8%, 11/15/13		945	626,062
Great
Canadian Gaming Corp., 7.25%, 2/15/15 (c)		2,970	2,079,000
Greektown
Holdings, LLC, 10.75%, 12/01/13 (c)(e)(f)		832	74,880
Harrahs
Operating Co., Inc.:
10.75%,
2/01/18 (a)		3,553	218,008
10%,
12/15/18 (c)		830	232,400
Inn of the
Mountain Gods Resort & Casino, 12%, 11/15/10		2,450	294,000
Little
Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (c)		1,855	853,300
Penn
National Gaming, Inc., 6.875%, 12/01/11		2,950	2,832,000
San Pasqual
Casino, 8%, 9/15/13 (c)		1,525	1,136,125
Shingle
Springs Tribal Gaming Authority, 9.375%, 6/15/15 (c)		490	286,650
Travelport
LLC, 5.886%, 9/01/14 (d)		210	67,200
Tropicana
Entertainment LLC Series WI, 9.625%, 12/15/14 (e)(f)		475	4,750
Virgin
River Casino Corp., 9%, 1/15/12 (e)		1,435	143,500
			13,269,300
Household
Durables0.8%
American
Greetings Corp., 7.375%, 6/01/16		1,525	785,375
Jarden
Corp., 7.50%, 5/01/17		1,180	920,400
			1,705,775
IT Services1.2%
Alliance
Data Systems Corp., 1.75%,
8/01/13
(b)(c)		1,800	1,201,500
First Data
Corp., 9.875%, 9/24/15		1,320	726,000
SunGard
Data Systems, Inc., 10.625%, 5/15/15 (c)		850	718,250
			2,645,750
Independent Power Producers &
Energy Traders3.6%
The AES
Corp., 8.75%, 5/15/13 (c)		1,210	1,173,700
Energy
Future Holdings Corp., 11.25%, 11/01/17 (a)		5,200	2,288,000
NRG Energy,
Inc.:
7.25%,
2/01/14		2,325	2,191,312
7.375%,
2/01/16		1,970	1,817,325
Texas
Competitive Electric Holdings Co. LLC, 10.50%, 11/01/16 (a)		1,500	720,000
			8,190,337

Corporate Bonds		Par (000)	Value
Industrial
Conglomerates0.5%
Sequa Corp.
(c):
11.75%,
12/01/15	USD	3,750	$ 600,000
13.50%,
12/01/15 (a)		5,247	624,013
			1,224,013
Insurance0.9%
Alliant
Holdings I, Inc., 11%, 5/01/15 (c)		2,500	1,612,500
USI
Holdings Corp., 5.113%, 11/15/14 (c)(d)		1,000	475,000
			2,087,500
Machinery0.9%
AGY Holding
Corp., 11%, 11/15/14		1,890	1,134,000
Accuride
Corp., 8.50%, 2/01/15		820	246,000
RBS Global,
Inc., 8.875%, 9/01/16		725	545,562
			1,925,562
Marine0.8%
Horizon
Lines, Inc., 4.25%, 8/15/12 (b)		900	434,250
Navios
Maritime Holdings, Inc., 9.50%, 12/15/14		691	414,600
Teekay
Shipping Corp., 8.875%, 7/15/11		1,000	950,000
			1,798,850
Media11.4%
Affinion
Group, Inc., 10.125%, 10/15/13		2,065	1,600,375
Allbritton
Communications Co., 7.75%, 12/15/12		1,150	517,500
CCO
Holdings LLC, 8.75%, 11/15/13		300	234,000
CMP
Susquehanna Corp., 9.875%, 5/15/14		2,950	88,500
CSC
Holdings, Inc.:
8.50%,
4/15/14 (c)		580	556,800
Series B,
7.625%, 4/01/11		340	336,600
Cablevision
Systems Corp. Series B:
8.334%,
4/01/09 (d)		100	100,000
8%, 4/15/12		700	677,250
Catalina
Marketing Corp., 10.50%, 10/01/15 (a)(c)(g)		4,000	2,680,000
Charter
Communications Holdings II, LLC, 10.25%, 9/15/10 (e)		735	591,675
DirecTV
Holdings LLC, 8.375%, 3/15/13		400	404,000
EchoStar
DBS Corp.:
6.375%,
10/01/11		400	382,000
7%,
10/01/13		140	130,550
Harland
Clarke Holdings Corp.:
5.984%,
5/15/15 (d)		510	177,225
9.50%,
5/15/15		620	279,000
Intelsat
Corp., 9.25%, 6/15/16 (c)		1,640	1,496,500
Intelsat
Subsidiary Holding Co. Ltd., 8.875%, 1/15/15 (c)		390	368,550
Liberty
Media Corp., 3.125%, 3/30/23 (b)		1,616	1,141,300
Local
Insight Regatta Hldgs, Inc., 11%, 12/01/17		1,052	252,480
Mediacom
LLC, 9.50%, 1/15/13		3,675	3,197,250
Network
Communications, Inc., 10.75%, 12/01/13		35	5,425
Nielsen
Finance LLC:
11.625%,
2/01/14 (c)		140	121,100
10%,
8/01/14		2,685	2,215,125
Rainbow
National Services LLC, 10.375%, 9/01/14 (c)		2,432	2,489,760
Salem
Communications Corp., 7.75%, 12/15/10		3,825	1,893,375
TL
Acquisitions, Inc., 10.50%, 1/15/15 (c)		6,400	3,008,000
Virgin
Media, Inc., 6.50%, 11/15/16 (b)(c)		1,770	924,825
			25,869,165

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	23

| Schedule
of Investments (continued) |
| --- |
| (Percentages shown are based on Net Assets) |

Corporate Bonds		Par (000)
Metals
& Mining4.3%
Aleris International, Inc. (e):
9%,
12/15/14 (a)	USD	1,495	$ 149
10%,
12/15/16		1,300	1,625
FMG Finance Property Ltd. (c):
10%,
9/01/13		790	671,500
10.625%,
9/01/16		1,910	1,623,500
Foundation PA Coal Co., 7.25%, 8/01/14		2,925	2,639,812
Freeport-McMoRan
Copper & Gold, Inc., 7.084%, 4/01/15 (d)		1,740	1,300,650
Newmont
Mining Corp., 1.625%, 7/15/17 (b)		875	943,906
Novelis,
Inc., 7.25%, 2/15/15		2,975	929,687
Ryerson,
Inc. (c):
8.545%,
11/01/14 (d)		600	306,000
12%,
11/01/15		400	236,000
Steel
Dynamics, Inc., 7.375%, 11/01/12		680	588,200
Vedanta
Resources Plc, 9.50%, 7/18/18 (c)		950	541,500
			9,782,529
Oil, Gas & Consumable
Fuels9.9%
Atlas
Energy Resources LLC, 10.75%, 2/01/18 (c)		1,880	1,522,800
Berry
Petroleum Co., 8.25%, 11/01/16		750	382,500
Chesapeake
Energy Corp.:
9.50%,
2/15/15		2,455	2,283,150
7.25%,
12/15/18		2,370	1,925,625
2.25%,
12/15/38 (b)		1,200	637,500
Compton
Petroleum Finance Corp., 7.625%, 12/01/13		2,390	800,650
Connacher
Oil and Gas Ltd., 10.25%, 12/15/15 (c)		1,965	746,700
EXCO
Resources, Inc., 7.25%, 1/15/11		4,150	3,314,812
Encore
Acquisition Co., 6.25%, 4/15/14		3,000	2,370,000
Forest Oil
Corp., 7.25%, 6/15/19 (c)		3,370	2,696,000
Massey
Energy Co., 3.25%, 8/01/15 (b)		1,875	1,190,625
OPTI
Canada, Inc., 8.25%, 12/15/14		2,530	860,200
PetroHawk
Energy Corp. (c):
10.50%,
8/01/14		835	822,475
7.875%,
6/01/15		695	597,700
Sabine Pass
LNG LP, 7.50%, 11/30/16		555	373,237
SandRidge
Energy, Inc.:
8.625%,
4/01/15 (a)		1,100	759,000
8%, 6/01/18
(c)		1,475	1,150,500
			22,433,474
Paper & Forest
Products2.1%
Abitibi-Consolidated,
Inc., 5.496%, 6/15/11 (d)		1,205	108,450
Ainsworth
Lumber Co. Ltd., 11%, 7/29/15 (c)		1,566	706,503
Bowater,
Inc., 4.996%, 3/15/10 (d)		4,075	733,500
Georgia-Pacific
Corp., 8.125%, 5/15/11		225	218,250
NewPage
Corp., 10%, 5/01/12		4,120	1,246,300
Norske Skog
Canada Ltd. Series D, 8.625%, 6/15/11		1,315	604,900
Verso Paper
Holdings LLC Series B:
4.92%,
8/01/14 (d)		420	109,200
9.125%,
8/01/14		2,710	1,016,250
			4,743,353
Personal
Products0.5%
Chattem,
Inc., 7%, 3/01/14		1,285	1,182,200
Pharmaceuticals0.6%
Angiotech
Pharmaceuticals, Inc., 5.011%, 12/01/13 (d)		2,105	1,289,312
Elan
Finance Plc, 8.875%, 12/01/13		140	112,000
			1,401,312
Real Estate Investment Trusts
(REITs)0.0%
FelCor
Lodging LP, 8.50%, 6/01/11		190	102,600

Corporate Bonds		Par (000)
Real Estate Management &
Development1.3%
Forest City
Enterprises, Inc., 7.625%, 6/01/15	USD	4,400	$ 1,936,000
Realogy
Corp.:
10.50%,
4/15/14		2,825	593,250
12.375%,
4/15/15		3,254	390,480
			2,919,730
Semiconductors & Semiconductor
Equipment0.2%
Spansion,
Inc., 4.386%, 6/01/13 (c)		1,800	420,750
Software0.1%
BMS
Holdings, Inc., 9.224%, 2/15/12 (a)(c)(d)		612	147,376
Specialty
Retail2.3%
Asbury
Automotive Group, Inc., 7.625%, 3/15/17		520	234,000
Buffets,
Inc., 12.50%, 11/01/14 (e)(f)		970	97
General
Nutrition Centers Inc.:
7.584%,
3/15/14 (d)		2,610	1,539,900
10.75%,
3/15/15		1,900	1,330,000
Group 1
Automotive, Inc., 2.25%, 6/15/36 (b)(g)		1,570	702,575
Michaels
Stores, Inc.:
10%,
11/01/14		790	269,587
11.375%,
11/01/16		1,235	291,769
United Auto
Group, Inc., 7.75%, 12/15/16		1,675	804,000
			5,171,928
Textiles, Apparel & Luxury
Goods1.6%
Levi
Strauss & Co., 8.875%, 4/01/16		2,925	2,237,625
Quiksilver,
Inc., 6.875%, 4/15/15		2,600	1,300,000
			3,537,625
Thrifts & Mortgage
Finance0.4%
Residential
Capital LLC, 8.50%, 5/15/10 (c)		1,195	824,550
Wireless Telecommunication
Services8.5%
Centennial
Communications Corp., 7.185%, 1/01/13 (d)		2,030	2,019,850
Cricket
Communications, Inc.:
9.375%,
11/01/14		1,850	1,688,125
10%,
7/15/15 (c)		1,320	1,217,700
Crown
Castle International Corp., 9%, 1/15/15		725	706,875
Digicel
Group Ltd. (c):
8.875%, 1/15/15		2,020	1,504,900
9.125%,
1/15/15 (a)		2,987	2,090,900
FiberTower
Corp., 9%, 11/15/12 (b)		1,000	285,000
iPCS, Inc.,
3.295%, 5/01/13 (d)		1,200	864,000
Leap
Wireless International, Inc., 4.50%, 7/15/14
(b)(c)		350	236,250
MetroPCS
Wireless, Inc., 9.25%, 11/01/14		3,285	3,104,325
Nordic
Telephone Co. Holdings ApS, 8.875%, 5/01/16 (c)		2,120	1,929,200
Orascom
Telecom Finance SCA, 7.875%, 2/08/14 (c)		365	219,000
Sprint
Capital Corp., 7.625%, 1/30/11		3,875	3,361,563
			19,227,688
Total Corporate
Bonds94.5%			214,564,983
Non-U.S. Government Agency
Mortgage-Backed Securities
Commercial Mortgage-Backed
Securities1.4%
Crown
Castle Towers LLC Series 2005-1A:
Class AFL,
0.841%, 6/15/35 (d)		2,435	2,215,850
Class AFX,
4.643%, 6/15/35 (c)		675	644,625
Global
Signal Trust Series 2006-1 Class A2, 5.45%, 2/15/36		390	364,650
Total Non-U.S. Government Agency
Mortgage-Backed Securities1.4%			3,225,125

See Notes to Financial Statements. — 24	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

Floating Rate Loan Interests			Value
Auto
Components1.1%
Allison Transmission, Inc. Term Loan, 3.20%, 8/07/14	USD	2,136	$ 1,415,256
Dana Holding Corp. Term Advance, 7.25%, 1/31/15		2,904	883,585
Delphi Corp.:
Initial
Tranche Term Loan C, 7.50%10.50%, 6/30/09		1,654	258,700
Subsequent
Tranche Term Loan C, 7.50%10.50%, 6/30/09		176	27,565
			2,585,106
Automobiles0.4%
Ford Motor Co. Term Loan, 5%, 12/15/13		1,491	476,579
General Motors Corp. Secured Term Loan, 2.784%, 11/29/13		1,191	426,592
			903,171
Building
Products2.1%
Building Materials Corp. of America Term Loan Advance, 3.625%3.875%, 2/22/14		744	507,425
CPG International, I Inc. Term Loan B, 6.26%, 2/28/11		4,577	3,203,819
Stile Acquisition Corp. (aka Masonite):
Canadian Term Loan, 4.63%5.046%,
4/06/13		1,424	581,616
US Term Loan, 4.63%6.25%,
4/06/13		1,443	589,693
			4,882,553
Capital
Markets0.2%
Marsico Parent Co., LLC Term Loan, 4.50%6.25%, 12/15/14		949	450,785
Chemicals1.3%
PQ Corp. (aka Niagara Acquisition, Inc.):
Loan (Second Lien), 7.68%,
7/30/15		5,500	1,925,000
Term Loan (First Lien), 4.43%4.71%,
7/31/14		995	594,513
Solutia Inc. Loan, 8.50%, 2/28/14		638	409,594
			2,929,107
Containers
& Packaging0.1%
Berry Plastics Group, Inc. Loan, 8.421%, 6/05/14
(a)		1,462	292,369
Diversified
Telecommunication Services2.1%
Wind Finance SL S.A. Euro Facility (Second Lien), 11.473%, 12/17/14	EUR	4,420	4,852,822
Health
Care Providers & Services1.9%
CHS/Community Health Systems, Inc.:
Delayed
Draw Term Loan, 2.72%3.404%, 7/25/2014	USD	122	102,991
Funded Term Loan, 4.439%4.446%, 7/25/2014		2,378	2,013,772
HCA Inc. Tranche A-1 Term Loan, 3.459%, 11/17/12		863	750,591
Rotech Healthcare, Inc. Term Loan B, 6.479%, 9/26/11 (a)		2,563	1,409,409
			4,276,763
Hotels,
Restaurants & Leisure0.4%
Travelport LLC (fka Travelport Inc.) Loan, 7.979%, 3/27/12 (a)		4,394	900,683
Independent
Power Producers & Energy Traders2.4%
Calpine Generating Co., LLC Second Priority Term Loan, 4.335%, 3/29/14		997	723,535
Texas Competitive Electric Holdings Co., LLC
(TXU) Initial Tranche:
B-1 Term Loan, 3.909%4.451%,
10/10/14		328	204,163
B-2 Term Loan, 3.909%4.451%,
10/10/14		1,885	1,175,879
B-3 Term Loan, 3.909%4.451%,
10/10/14		5,431	3,387,742
			5,491,319
Floating Rate Loan Interests	Par (000)		Value
Machinery1.0%
Navistar International Corp.:
Revolving
Credit-Linked Deposit, 3.649%3.659%, 1/19/12	USD	795	$ 569,087
Term Advance, 3.659%, 1/19/12		2,185	1,564,095
Rexnord Holdings, Inc. Loan, 9.181%, 3/01/13 (a)		634	158,441
			2,291,623
Media3.3%
Affinion Group Holdings, Inc. Loan, 8.523%,
3/01/12		650	292,500
Cengage Learning Acquisitions, Inc. (Thomson
Learning)
Tranche
1 Incremental Term Loan, 7.50%, 7/03/14		2,487	1,741,250
HMH Publishing Co. Ltd. (aka Education Media):
Mezzanine, 10.756%, 11/14/14		9,060	2,718,109
Tranche A Term Loan, 5.256%,
6/12/14		3,726	2,095,600
NV Broadcasting, LLC Second Lien, 8.72%,
11/03/14		1,750	350,000
Newsday, LLC Fixed Rate Term Loan, 9.75%,
8/01/13		275	248,188
			7,445,647
Multiline
Retail0.4%
Dollar
General Corp. Tranche B-1 Term Loan, 3.159%3.924%, 7/07/14		950	820,239
Oil,
Gas & Consumable Fuels1.2%
Turbo Beta Ltd. Dollar Facility, 14.50%, 3/15/18		3,332	2,665,916
Paper
& Forest Products0.5%
Georgia-Pacific LLC Term B Loan, 2.409%3.689%, 12/20/12		464	400,528
NewPage Corp. Term Loan, 5.313%, 12/22/14		495	301,500
Verso Paper Finance Holdings LLC Loan, 7.685% 8.435%, 2/01/13		1,749	349,841
			1,051,869
Real
Estate Management & Development0.2%
Realogy Corp.:
Initial Term B Loan, 3.438%,
10/10/13		598	338,475
Synthetic Letter of Credit, 3.449%,
10/10/13		189	107,184
			445,659
Total Floating Rate Loan
Interests18.6%			42,285,631
Common Stocks		Shares
Capital
Markets0.1%
E*Trade Financial Corp. (f)		108,426	86,741
Chemicals0.0%
Wellman Holdings, Inc.		2,499	625
Communications
Equipment0.7%
Loral Space & Communications Ltd. (f)		123,724	1,473,553
Electrical
Equipment0.0%
Medis Technologies Ltd. (f)		109,685	62,520
SunPower Corp. Class B (f)		573	14,187
			76,707
Oil,
Gas & Consumable Fuels0.2%
EXCO Resources, Inc.		50,649	461,412
Paper
& Forest Products0.1%
Ainsworth Lumber Co. Ltd.		186,000	105,266
Ainsworth Lumber Co. Ltd. (c)		208,741	118,449
Western Forest Products, Inc. (f)		74,889	8,830
Western Forest Products, Inc. Restricted Shares
(f)		74,936	8,835
			241,380
Total
Common Stocks1.1%			2,340,418

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	25

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

| Capital
Trusts | | | Value | |
| --- | --- | --- | --- | --- |
| Diversified Financial Services0.4% | | | | |
| Citigroup, Inc.
Series E, 8.40% (d)(h) | USD | 2,585 | $ 905,009 | |
| Total
Capital Trusts0.4% | | | 905,009 | |
| Warrants
(i) | Shares | | | |
| Health Care Providers & Services0.0% | | | | |
| HealthSouth Corp.
(expires 1/16/14) | | 52,465 | 1 | |
| Paper & Forest Products0.0% | | | | |
| MDP Acquisitions
Plc (expires 10/01/13) | | 1,100 | 9,789 | |
| Total Warrants0.0% | | | 9,790 | |
| Other
Interests (j) | Beneficial Interest (000 ) | | | |
| Media0.0% | | | | |
| Adelphia Escrow | USD | 1,250 | 125 | |
| Adelphia Recovery
Trust | | 1,568 | 6,271 | |
| Total
Other Interests0.0% | | | 6,396 | |
| Total
Long-Term Investments (Cost$431,707,590)116.0% | | | 263,337,352 | |
| Short-Term
Securities | | | | |
| BlackRock Liquidity Series, LLC Cash Sweep Series, 0.73% (k)(l) | | 11,058 | 11,058,272 | |
| Total
Short-Term Securities (Cost$11,058,272)4.9% | | | 11,058,272 | |
| Total
Investments (Cost$442,765,862*)120.9% | | | 274,395,624 | |
| Liabilities
in Excess of Other Assets(20.9)% | | | (47,346,122 | ) |
| Net
Assets100.0% | | | $ 227,049,502 | |

* — Aggregate cost	$ 443,613,284
Gross unrealized
appreciation	$ 1,034,718
Gross unrealized
depreciation	(170,252,378	)
Net unrealized
depreciation	$ (169,217,660	)

| (a) | Represents a
payment-in-kind security which may pay interest/dividends in additional
par/shares. |
| --- | --- |
| (b) | Convertible
security. |
| (c) | Security exempt
from registration under Rule 144A of the Securities Act of 1933. These
securities may be resold in transactions exempt from registration to
qualified institutional investors. |
| (d) | Variable rate
security. Rate is as of report date. |
| (e) | Issuer filed for
bankruptcy and/or is in default of interest payments. |
| (f) | Non-income
producing security. |
| (g) | Represents a
step-up bond that pays an initial coupon rate for the first period and then a
higher coupon rate for the following periods. Rate shown reflects the current
yield as of report date. |
| (h) | Security is
perpetual in nature and has no stated maturity date. |
| (i) | Warrants entitle
the Trust to purchase a predetermined number of shares of common stock and
are non-income producing. The purchase price and number of shares are subject
to adjustment under certain conditions until the expiration date. |
| (j) | Other interests
represent beneficial interest in liquidation trusts and other reorganization
entities and are non-income producing. |
| (k) | Represents the
current yield as of report date. |
| (l) | Investments in
companies considered to be an affiliate of the Trust, for purposes of Section
2(a)(3) of the Investment Company Act of 1940, were as follows: |

| Affiliate — BlackRock Liquidity
Series, LLC Cash Sweep Series | USD | Net Activity — 4,710,831 | $ 23,928 |
| --- | --- | --- | --- |

| | For Trust
compliance purposes, the Trusts industry classifications refer to any one or
more of the industry sub-classifications used by one or more widely
recognized market indexes or ratings group indexes, and/or as defined by
Trust management. This definition may not apply for purposes of this report,
which may combine industry sub-classification for reporting ease. |
| --- | --- |
| | Credit default
swaps on single name issuesbuy protection outstanding as of February 28, 2009
were as follows: |

Issuer	Pay Fixed Rate	Counterparty	Expiration	Notional Amount (000)	Unrealized Appreciation
Masco
Corp.	5.85%	Goldman Sachs Bank USA	March 2014	USD 1,200	$ 9,854
Mohawk
Industries, Inc.	4.70%	Goldman Sachs Bank USA	March 2014	USD 1,200	1,416
Total					$ 11,270

Credit default swaps on single name issuessold protection outstanding as of February 28, 2009 were as follows:

Issuer 1	Receive Fixed Rate	Counterparty	Expiration	Notional Amount (000) 2	Unrealized Depreciation
Ford
Motor Co.	3.80%	UBS AG	March 2010	USD 1,480	$ (1,037,148	)
Ford
Motor Co.	5.00%	Goldman Sachs Bank USA	June 2010	USD 5,920	(4,191,141	)
Total					$ (5,228,289	)

| | 1 Credit rating is C using Standard and Poors
ratings. |
| --- | --- |
| | 2 The maximum potential amount the Trust may pay should a
negative credit event take place as defined under the terms of the agreement. |
| | Foreign currency
exchange contracts as of February 28, 2009 were as follows: |

Currency Purchased — USD	333,523	Currency Sold — CAD	410,000	Counterparty — UBS AG	Settlement Date — 3/18/09	$ 11,266
USD	11,791,969	EUR	8,994,500	Deutsche Bank AG	3/18/09	391,034
USD	450,818	EUR	350,000	UBS AG	3/18/09	7,177
USD	272,002	EUR	210,000	Citibank, NA	3/18/09	5,818
Total						$ 415,295


CAD	Canadian Dollar
EUR	Euro
USD	US Dollar

See Notes to Financial Statements. — 26	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (concluded) BlackRock Corporate High Yield Fund V, Inc. (HYV)

Effective September 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

| | Level 1 - price
quotations in active markets/exchanges for identical securities |
| --- | --- |
| | Level 2 - other
observable inputs (including, but not limited to: quoted prices for similar
assets or liabilities in markets that are not active, inputs other than
quoted prices that are observable for the assets or liabilities (such as
interest rates, yield curves, volatilities, prepayment speeds, loss
severities, credit risks and default rates) or other market-corroborated
inputs) |
| | Level 3 -
unobservable inputs based on the best information available in the
circumstance, to the extent observable inputs are not available (including
the Trusts own assumption used in determining the fair value of investments) |

The following table summarizes the inputs used as of February 28, 2009 in determining the fair valuation of the Trusts investments:

Valuation Inputs	Investments in Securities — Assets	Other Financial Instruments* — Assets	Liabilities
Level 1	$ 2,221,346
Level 2	246,764,700	$ 426,565	$ (5,228,289	)
Level 3	25,409,578
Total	$ 274,395,624	$ 426,565	$ (5,228,289	)

Other financial instruments are swaps and foreign currency exchange contracts. Swaps and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:

	Investments in Securities
	Assets
Balance as of
August 31, 2008	$ 6,058,493
Accrued
discounts/premiums	283,875
Realized gain	580
Change in unrealized
appreciation/depreciation 1	(31,824,940	)
Net sales	167,322
Net transfers in
Level 3	50,724,248
Balance
as of February 28, 2009	$ 25,409,578

1 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	27

Schedule of Investments February 28, 2009 (Unaudited) BlackRock Corporate High Yield Fund VI, Inc. (HYT) (Percentages shown are based on Net Assets)

Corporate Bonds			Value
Airlines0.8%
Continental Airlines, Inc.:
Series
1997-4-B, 6.90%, 7/02/18	USD	1,999	$ 1,448,879
Series
2001-1-C, 7.033%, 12/15/12		482	346,643
UAL Corp., 4.50%, 6/30/21 (a)		580	264,654
			2,060,176
Auto
Components1.4%
Allison Transmission, Inc. (b):
11%,
11/01/15		1,235	598,975
11.25%,
11/01/15 (c)		1,845	710,325
The Goodyear Tire & Rubber Co.:
7.857%,
8/15/11		2,295	1,836,000
8.625%,
12/01/11		235	188,000
Lear Corp., 8.75%, 12/01/16		700	119,000
			3,452,300
Automobiles0.2%
Ford Capital BV, 9.50%, 6/01/10		1,192	381,440
Ford Motor Co., 8.90%, 1/15/32		1,100	187,000
			568,440
Building
Products0.8%
Momentive Performance Materials, Inc., 11.50%, 12/01/16		2,595	544,950
Ply Gem Industries, Inc., 11.75%, 6/15/13		3,110	1,430,600
			1,975,550
Capital
Markets0.5%
E*Trade Financial Corp., 12.50%, 11/30/17 (b)		2,550	1,173,000
Chemicals2.1%
American Pacific Corp., 9%, 2/01/15		1,400	1,176,000
Innophos, Inc., 8.875%, 8/15/14		1,250	993,750
MacDermid, Inc., 9.50%, 4/15/17 (b)		2,680	1,058,600
Terra Capital, Inc. Series B, 7%, 2/01/17		265	241,150
Wellman Holdings, Inc. (a):
Second Lien
Subordinate Note, 10%, 1/29/19 (b)		1,450	1,450,000
Third Lien
Subordinate Note, 5%, 1/29/2019		441	308,700
			5,228,200
Commercial
Services & Supplies3.6%
Sally Holdings LLC, 9.25%, 11/15/14		350	333,375
US Investigations Services, Inc., 10.50%, 11/01/15 (b)		1,100	874,500
Waste Services, Inc., 9.50%, 4/15/14		4,775	3,772,250
West Corp.:
9.50%,
10/15/14		1,200	840,000
11%,
10/15/16		4,470	2,860,800
			8,680,925
Construction
& Engineering0.8%
Dycom Industries, Inc., 8.125%, 10/15/15		2,825	2,019,875
Construction
Materials1.0%
Nortek, Inc., 10%, 12/01/13		3,705	1,482,000
Texas Industries, Inc., 7.25%, 7/15/13		1,285	912,350
			2,394,350
Containers
& Packaging6.0%
Berry Plastics Holding Corp., 5.871%, 9/15/14 (d)		2,740	1,274,100
Crown European Holdings SA, 6.25%, 9/01/11	EUR	2,025	2,490,175
Graphic Packaging International Corp.:
8.50%,
8/15/11	USD	1,975	1,738,000
9.50%,
8/15/13		1,620	1,206,900
Impress Holdings BV, 4.219%, 9/15/13 (b)(d)		670	495,800
Owens Brockway Glass Container, Inc.:
8.25%,
5/15/13		1,575	1,590,750
6.75%,
12/01/14	EUR	665	750,317
Packaging Dynamics Finance Corp., 10%, 5/01/16 (b)		2,165	930,950
Pregis Corp., 12.375%, 10/15/13		1,920	854,400
Rock-Tenn Co., 8.20%, 8/15/11		3,175	3,175,000
Smurfit-Stone Container Enterprises, Inc., 8%, 3/15/17 (e)		2,140	187,250
			14,693,642

Corporate Bonds		Par (000)
Diversified
Consumer Services1.8%
Service Corp. International, 7%, 6/15/17	USD	4,775	$ 4,345,250
Diversified
Financial Services3.1%
Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16		820	748,250
FCE Bank Plc:
7.125%,
1/16/12	EUR	4,200	3,247,972
Series JD,
3.991%, 9/30/09 (d)		425	452,586
Ford Motor Credit Co. LLC:
4.01%, 1/13/12
(d)	USD	340	166,600
7.80%,
6/01/12		300	162,607
GMAC LLC (b):
7.25%,
3/02/11		601	415,129
3.461%,
12/01/14 (d)		1,415	622,600
Leucadia National Corp., 8.125%, 9/15/15		2,100	1,743,000
			7,558,744
Diversified
Telecommunication Services5.8%
Broadview Networks Holdings, Inc., 11.375%, 9/01/12		1,680	873,600
Cincinnati Bell, Inc., 7.25%, 7/15/13		415	396,325
Qwest Communications International, Inc.:
7.50%,
2/15/14		3,190	2,703,525
3.50%,
11/15/25 (a)		510	455,813
Series B,
7.50%, 2/15/14		2,820	2,389,950
Qwest Corp.:
5.246%,
6/15/13 (d)		2,300	1,949,250
7.625%,
6/15/15		875	780,937
Windstream Corp., 8.125%, 8/01/13		4,800	4,656,000
			14,205,400
Electric
Utilities3.6%
Edison Mission Energy, 7.50%, 6/15/13		2,975	2,729,562
NSG Holdings LLC, 7.75%, 12/15/25 (b)		1,630	1,304,000
Nevada Power Co. Series A, 8.25%, 6/01/11		2,400	2,524,790
Tenaska Alabama Partners LP, 7%, 6/30/21 (b)		3,019	2,281,444
			8,839,796
Electrical
Equipment0.0%
UCAR Finance, Inc., 10.25%, 2/15/12		32	28,800
Electronic
Equipment & Instruments0.1%
Sanmina-SCI Corp., 8.125%, 3/01/16		875	306,250
Energy
Equipment & Services0.7%
Compagnie Generale de Geophysique-Veritas:
7.50%,
5/15/15		335	262,137
7.75%,
5/15/17		510	395,250
North American Energy Partners, Inc., 8.75%, 12/01/11		595	468,562
Transocean, Inc. Series A, 1.625%, 12/15/37 (a)		520	463,450
			1,589,399
Food
& Staples Retailing0.7%
AmeriQual Group LLC, 9.50%, 4/01/12 (b)		1,300	780,000
Rite Aid Corp., 7.50%, 3/01/17		1,590	858,600
			1,638,600
Food
Products0.4%
Tyson Foods, Inc., 10.50%, 3/01/14 (b)		1,090	1,027,325
Health
Care Equipment & Supplies3.2%
Catalent Pharma Solutions, Inc., 9.50%, 4/15/15 (c)		1,500	510,000
DJO Finance LLC:
10.875%,
11/15/14		8,140	6,186,400
11.75%,
11/15/14		135	88,425
Hologic, Inc., 2%, 12/15/37 (a)(f)		1,365	887,250
			7,672,075

| See Notes to Financial
Statements. — 28 | SEMI-ANNUAL REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

Schedule of Investments (continued) BlackRock Corporate High Yield Fund VI, Inc. (HYT) (Percentages shown are based on Net Assets)

Corporate Bonds			Value
Health
Care Providers & Services2.5%
Community Health Systems, Inc., 8.875%, 7/15/15	USD	465	$ 440,006
Tenet Healthcare Corp.:
6.375%,
12/01/11		550	489,500
6.50%,
6/01/12		5,710	5,081,900
			6,011,406
Hotels,
Restaurants & Leisure5.8%
American Real Estate Partners LP, 7.125%, 2/15/13		4,780	3,931,550
Galaxy Entertainment Finance Co. Ltd. (b):
7.323%,
12/15/10 (d)		450	337,500
9.875%,
12/15/12		875	472,500
Gaylord Entertainment Co., 8%, 11/15/13		1,000	662,500
Great Canadian Gaming Corp., 7.25%, 2/15/15 (b)		3,180	2,226,000
Greektown Holdings, LLC, 10.75%, 12/01/13 (b)(e)(g)		893	80,370
Harrahs Operating Co., Inc:
10.75%,
2/01/18 (c)		3,796	234,218
10%,
12/15/18 (b)		887	248,360
Inn of the Mountain Gods Resort & Casino, 12%,
11/15/10		2,575	309,000
Little Traverse Bay Bands of Odawa Indians,
10.25%,
2/15/14 (b)		1,895	871,700
Penn National Gaming, Inc., 6.875%, 12/01/11		3,150	3,024,000
San Pasqual Casino, 8%, 9/15/13 (b)		1,575	1,173,375
Shingle Springs Tribal Gaming Authority, 9.375%, 6/15/15
(b)		560	327,600
Travelport LLC, 5.886%, 9/01/14 (d)		195	62,400
Tropicana Entertainment LLC, 9.625%, 12/15/14 (e)(g)		515	5,150
Virgin River Casino Corp., 9%, 1/15/12 (e)(g)		1,500	150,000
			14,116,223
Household
Durables0.8%
American Greetings Corp., 7.375%, 6/01/16		1,770	911,550
Jarden Corp., 7.50%, 5/01/17		1,265	986,700
			1,898,250
IT
Services1.1%
Alliance Data Systems Corp., 1.75%, 8/01/13 (a)(b)		1,870	1,248,225
First Data Corp., 9.875%, 9/24/15		1,425	783,750
SunGard Data Systems, Inc., 10.625%, 5/15/15 (b)		900	760,500
			2,792,475
Independent
Power Producers & Energy Traders3.1%
The AES Corp., 8.75%, 5/15/13 (b)		51	49,470
Energy Future Holdings Corp., 11.25%, 11/01/17 (c)		5,575	2,453,000
NRG Energy, Inc.:
7.25%,
2/01/14		2,550	2,403,375
7.375%,
2/01/16		2,000	1,845,000
Texas Competitive Electric Holdings Co. LLC, 10.50%,
11/01/16
(c)		1,575	756,000
			7,506,845
Industrial
Conglomerates0.5%
Sequa Corp. (b):
11.75%,
12/01/15		4,010	641,600
13.50%,
12/01/15 (c)		5,645	675,358
			1,316,958
Insurance0.9%
Alliant Holdings I, Inc., 11%, 5/01/15 (b)		2,600	1,677,000
USI Holdings Corp., 5.113%, 11/15/14 (b)(d)		1,070	508,250
			2,185,250
Machinery0.9%
AGY Holding Corp., 11%, 11/15/14		2,050	1,230,000
Accuride Corp., 8.50%, 2/01/15		865	259,500
RBS Global, Inc., 8.875%, 9/01/16		785	590,713
			2,080,213
Marine0.6%
Horizon Lines, Inc., 4.25%, 8/15/12 (a)		960	463,200
Navios Maritime Holdings, Inc., 9.50%, 12/15/14		743	445,800
Teekay Shipping Corp., 8.875%, 7/15/11		635	603,250
			1,512,250

Corporate Bonds			Value
Media11.5%
Affinion Group, Inc., 10.125%, 10/15/13	USD	2,189	$ 1,696,475
Allbritton Communications Co., 7.75%, 12/15/12		1,240	558,000
CCO Holdings LLC, 8.75%, 11/15/13		300	234,000
CMP Susquehanna Corp., 9.875%, 5/15/14		3,175	95,250
CSC Holdings, Inc.:
8.50%,
4/15/14 (b)		550	528,000
Series B,
7.625%, 4/01/11		660	653,400
Cablevision Systems Corp. Series B, 8%, 4/15/12		775	749,812
Catalina Marketing Corp., 10.50%, 10/01/15 (b)(c)(f)		4,250	2,847,500
Charter Communications Holdings II, LLC, 10.25%,
9/15/10 (e)		1,195	961,975
DirecTV Holdings LLC, 8.375%, 3/15/13		420	424,200
EchoStar DBS Corp.:
6.375%,
10/01/11		400	382,000
7%,
10/01/13		150	139,875
Harland Clarke Holdings Corp.:
5.984%,
5/15/15 (d)		550	191,125
9.50%,
5/15/15		660	297,000
Intelsat Corp., 9.25%, 6/15/16 (b)		1,410	1,286,625
Intelsat Subsidiary Holding Co. Ltd., 8.875%, 1/15/15 (b)		420	396,900
Liberty Media Corp., 3.125%, 3/30/23 (a)		1,748	1,234,525
Local Insight Regatta Hldgs, Inc., 11%, 12/01/17		1,117	268,080
Mediacom LLC, 9.50%, 1/15/13		3,900	3,393,000
Network Communications, Inc., 10.75%, 12/01/13		40	6,200
Nielsen Finance LLC:
11.625%,
2/01/14 (b)		225	194,625
10%,
8/01/14		3,025	2,495,625
Rainbow National Services LLC, 10.375%, 9/01/14 (b)		2,570	2,631,038
Salem Communications Corp., 7.75%, 12/15/10		4,075	2,017,125
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)		6,785	3,188,950
Virgin Media, Inc., 6.50%, 11/15/16 (a)(b)		1,915	1,000,588
			27,871,893
Metals
& Mining4.3%
Aleris International, Inc. (e):
9%,
12/15/14 (c)		1,625	162
10%,
12/15/16		1,300	1,625
FMG Finance Property Ltd. (b):
10%,
9/01/13		850	722,500
10.625%,
9/01/16		2,060	1,751,000
Foundation PA Coal Co., 7.25%, 8/01/14		3,250	2,933,125
Freeport-McMoRan Copper & Gold, Inc., 7.084%, 4/01/15
(d)		1,835	1,371,662
Newmont Mining Corp., 1.625%, 7/15/17 (a)		930	1,003,238
Novelis, Inc., 7.25%, 2/15/15		3,175	992,187
Ryerson, Inc. (b):
8.545%,
11/01/14 (d)		640	326,400
12%,
11/01/15		450	265,500
Steel Dynamics, Inc., 7.375%, 11/01/12		730	631,450
Vedanta Resources Plc, 9.50%, 7/18/18 (b)		1,015	578,550
			10,577,399
Oil,
Gas & Consumable Fuels10.1%
Atlas Energy Resources LLC, 10.75%, 2/01/18 (b)		2,005	1,624,050
Berry Petroleum Co., 8.25%, 11/01/16		800	408,000
Chesapeake Energy Corp.:
9.50%,
2/15/15		2,625	2,441,250
7.25%,
12/15/18		2,575	2,092,187
2.25%,
12/15/38 (a)		1,250	664,063
Compton Petroleum Finance Corp., 7.625%, 12/01/13		2,555	855,925
Connacher Oil and Gas Ltd., 10.25%, 12/15/15 (b)		2,035	773,300
EXCO Resources, Inc., 7.25%, 1/15/11		4,450	3,554,437
Encore Acquisition Co., 6.25%, 4/15/14		3,150	2,488,500
Forest Oil Corp., 7.25%, 6/15/19 (b)		3,595	2,876,000
Massey Energy Co., 3.25%, 8/01/15 (a)		2,010	1,276,350
OPTI Canada, Inc., 8.25%, 12/15/14		2,710	921,400
PetroHawk Energy Corp. (b):
10.50%,
8/01/14		895	881,575
7.875%,
6/01/15		680	584,800
Sabine Pass LNG LP, 7.50%, 11/30/16		610	410,225

| See Notes to Financial
Statements. — SEMI-ANNUAL REPORT | FEBRUARY 28, 2009 | 29 |
| --- | --- | --- |

Schedule of Investments (continued) BlackRock Corporate High Yield Fund VI, Inc. (HYT) (Percentages shown are based on Net Assets)

Corporate Bonds			Value
Oil,
Gas & Consumable Fuels (concluded)
SandRidge Energy, Inc.:
5.06%,
4/01/14 (d)	USD	1,000	$ 657,172
8.625%,
4/01/15 (c)		1,100	759,000
8%, 6/01/18
(b)		1,570	1,224,600
			24,492,834
Paper
& Forest Products2.1%
Abitibi-Consolidated, Inc., 4.82%, 6/15/11 (d)		1,400	126,000
Ainsworth Lumber Co. Ltd., 11%, 7/29/15 (b)(c)		1,662	749,997
Bowater, Inc., 4.32%, 3/15/10 (d)		4,475	805,500
Georgia-Pacific Corp., 8.125%, 5/15/11		240	232,800
NewPage Corp., 10%, 5/01/12		4,385	1,326,462
Norske Skog Canada Ltd. Series D, 8.625%, 6/15/11		1,415	650,900
Verso Paper Holdings LLC Series B:
4.92%,
8/01/14 (d)		450	117,000
9.125%,
8/01/14		2,900	1,087,500
			5,096,159
Personal
Products0.5%
Chattem, Inc., 7%, 3/01/14		1,405	1,292,600
Pharmaceuticals0.6%
Angiotech Pharmaceuticals, Inc., 5.011%, 12/01/13 (d)		2,225	1,362,812
Elan Finance Plc, 8.875%, 12/01/13		150	120,000
			1,482,812
Real
Estate Investment Trusts (REITs)0.1%
FelCor Lodging LP, 8.50%, 6/01/11		480	259,200
Real
Estate Management & Development1.3%
Forest City Enterprises, Inc., 7.625%, 6/01/15		4,750	2,090,000
Realogy Corp.:
10.50%,
4/15/14		3,090	648,900
12.375%,
4/15/15		3,492	419,040
			3,157,940
Semiconductors
& Semiconductor Equipment0.2%
Spansion, Inc., 4.386%, 6/01/13 (b)		1,920	448,800
Software0.1%
BMS Holdings, Inc., 9.224%, 2/15/12 (b)(c)(d)		654	162,657
Specialty
Retail2.3%
Asbury Automotive Group, Inc., 7.625%, 3/15/17		560	252,000
Buffets, Inc., 12.50%, 11/01/14 (e)(g)		950	95
General Nutrition Centers, Inc:
6.404%,
3/15/14 (c)(d)		2,800	1,652,000
10.75%,
3/15/15		2,040	1,428,000
Group 1 Automotive, Inc., 2.25%, 6/15/36 (a)(f)		1,685	754,038
Michaels Stores, Inc.:
10%,
11/01/14		860	293,475
11.375%,
11/01/16		1,360	321,300
United Auto Group, Inc., 7.75%, 12/15/16		1,805	866,400
			5,567,308
Textiles,
Apparel & Luxury Goods1.6%
Levi Strauss & Co., 8.875%, 4/01/16		3,200	2,448,000
Quiksilver, Inc., 6.875%, 4/15/15		2,725	1,362,500
			3,810,500
Thrifts
& Mortgage Finance0.4%
Residential Capital LLC, 8.50%, 5/15/10 (b)		1,275	879,750
Wireless
Telecommunication Services8.8%
Centennial Communications Corp., 7.185%, 1/01/13 (d)		2,170	2,159,150
Cricket Communications, Inc.:
9.375%,
11/01/14		1,850	1,688,125
10%, 7/15/15
(b)		1,420	1,309,950
Crown Castle International Corp., 9%, 1/15/15		760	741,000

Corporate Bonds			Value
Wireless
Telecommunication Services (concluded)
Digicel Group Ltd. (b):
8.875%,
1/15/15	USD	2,160	$ 1,609,200
9.125%,
1/15/15 (c)		3,064	2,144,800
FiberTower Corp., 9%, 11/15/12 (a)		1,000	285,000
iPCS, Inc., 3.295%, 5/01/13 (d)		1,295	932,400
Leap Wireless International, Inc., 4.50%, 7/15/14 (a)(b)		370	249,750
MetroPCS Wireless, Inc., 9.25%, 11/01/14		4,575	4,323,375
Nordic Telephone Co. Holdings ApS, 8.875%, 5/01/16 (b)		2,270	2,065,700
Orascom Telecom Finance SCA, 7.875%, 2/08/14 (b)		385	231,000
Sprint Capital Corp., 7.625%, 1/30/11		4,115	3,569,763
			21,309,213
Total Corporate Bonds96.7%			235,287,032
Non-US Government Agency Mortgage-Backed
Securities
Commercial
Mortgage-Backed Securities1.4%
Crown Castle Towers LLC Series 2005-1A:
Class AFL,
0.936%, 6/15/35 (d)		2,600	2,366,000
Class AFX,
4.643%, 6/15/35 (b)		725	692,375
Global Signal Trust Series 2006-1 Class A2, 5.45%, 2/15/36		415	388,025
Total Non-US Government Agency Mortgage-Backed Securities1.4%			3,446,400
Floating Rate Loan Interests
Auto
Components1.1%
Allison Transmission, Inc. Term Loan, 3.20%, 8/07/14		2,280	1,510,708
Dana Holding Corp. Term Advance, 7.25%, 1/31/15		2,999	912,437
Delphi Corp.:
Initial
Tranche Term Loan C, 10.50%, 6/30/09		1,739	271,996
Subsequent
Tranche Term Loan C, 10.50%, 6/30/09		186	29,129
			2,724,270
Automobiles0.4%
Ford Motor Co. Term Loan, 5%, 12/15/13		1,566	500,406
General Motors Corp. Secured Term Loan, 4.148%, 11/29/13		1,290	462,141
			962,547
Building
Products2.2%
Building Materials Corp. of America Term Loan Advance,
3.625% -
3.875%, 2/22/14		744	507,425
CPG International, I Inc. Term Loan B, 6.26%, 2/28/11		4,987	3,491,118
Stile Acquisition Corp. (aka Masonite):
Canadian
Term Loan, 6.25%, 4/06/13		1,568	640,546
US Term
Loan, 6.75%, 4/06/13		1,546	631,679
			5,270,768
Capital
Markets0.2%
Marsico Parent Co., LLC Term Loan, 4.50% - 7.25%, 12/15/14		949	450,785
Chemicals
- 1.2%
PQ Corp. (fka Niagara Acquisition, Inc.):
Loan
(Second Lien), 7.68%, 7/30/15		5,500	1,925,000
Term Loan
(First Lien), 4.43% - 4.71%, 7/31/14		995	594,513
Solutia Inc. Loan, 8.50%, 2/28/14		713	457,781
			2,977,294
Containers
& Packaging - 0.1%
Berry Plastics Group, Inc. Loan, 8.421%, 6/05/14 (c)		1,566	313,252
Diversified
Telecommunication Services2.2%
Wind Finance SL S.A. Euro Facility (Second Lien),
11.473%,
12/17/14	EUR	4,770	5,237,095

| See Notes to Financial
Statements. — 30 | SEMI-ANNUAL REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

Schedule of Investments (continued) BlackRock Corporate High Yield Fund VI, Inc. (HYT) (Percentages shown are based on Net Assets)

Floating Rate Loan Interests	Par (000)		Value
Health Care Providers
& Services1.9%
CHS/ Community Health Systems, Inc.:
Delayed Draw Term
Loan, 2.729%, 7/25/2014	USD	129	$ 109,170
Funded Term Loan,
2.729%3.506%, 7/25/2014		2,521	2,134,598
HCA Inc. Tranche A-1 Term Loan, 2.959%, 11/17/12		863	750,591
Rotech Healthcare, Inc. Term Loan B, 6.479%, 9/26/11
(c)		2,781	1,529,643
			4,524,002
Hotels, Restaurants
& Leisure0.4%
Travelport LLC (fka Travelport Inc.) Loan, 7.979%,
3/27/12 (c)		4,720	967,622
Independent Power
Producers & Energy Traders2.4%
Calpine Generating Co., LLC Second Priority Term
Loan, 4.335%, 3/29/14		1,045	757,798
Texas Competitive Electric Holdings Co., LLC (TXU)
Initial Tranche:
B-1 Term Loan,
3.948% - 4.451%, 10/10/14		347	216,537
B-2 Term Loan,
3.948% - 4.451%, 10/10/14		1,885	1,175,879
B-3 Term Loan,
3.948% - 4.451%, 10/10/14		5,925	3,695,719
			5,845,933
Machinery1.0%
Navistar International Corp.:
Revolving
Credit-Linked Deposit, 3.718% - 3.729%, 1/19/12		850	608,458
Term Advance,
3.729%, 1/19/12		2,335	1,671,470
Rexnord Holdings, Inc. Loan, 8.261%, 3/01/13 (c)		683	170,629
			2,450,557
Media3.3%
Affinion Group Holdings, Inc. Loan, 9.273%, 3/01/12		650	292,500
Cengage Learning Acquisitions, Inc. (Thomson
Learning) Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		2,736	1,915,375
HMH Publishing Co. Ltd. (aka Education Media):
Mezzanine,
10.756%, 11/14/14		10,126	3,037,887
Tranche A Term
Loan, 5.256%, 6/12/14		3,945	2,218,871
NV Broadcasting, LLC Second Lien, 5.25%, 11/03/14		1,750	350,000
Newsday, LLC Fixed Rate Term Loan, 9.75%, 8/01/13		300	270,750
			8,085,383
Multiline Retail0.4%
Dollar General Corp. Tranche B-1 Term Loan, 3.198% -
3.924%, 7/07/14		1,015	876,360
Oil, Gas &
Consumable Fuels1.2%
Turbo Beta Ltd. Dollar Facility, 14.50%, 3/15/18		3,635	2,908,272
Paper & Forest
Products0.4%
Georgia-Pacific LLC Term B Loan, 2.956% - 4.189%,
12/20/12		492	424,560
NewPage Corp. Term Loan, 5.313%, 12/22/14		495	301,500
Verso Paper Finance Holdings LLC Loan, 7.685% -
8.435%, 2/01/13		1,809	361,793
			1,087,853
Real Estate Management
& Development0.2%
Realogy Corp.:
Initial Term B
Loan, 3.438%, 10/10/13		638	361,040
Synthetic Letter
of Credit, 0.347%, 10/10/13		205	115,645
			476,685
Total Floating Rate Loan
Interests18.6%			45,158,678

Common Stocks
Capital Markets0.0%
E*Trade Financial Corp. (g)	116,170	92,936
Chemicals0.0%
Wellman Holdings, Inc.	2,616	654
Communications
Equipment0.7%
Loral Space & Communications Ltd. (g)	134,482	1,601,681
Electrical
Equipment0.0%
Medis Technologies Ltd. (g)	116,910	66,639
SunPower Corp. Class B (g)	1,235	30,579
		97,218

Common Stocks		Value
Oil, Gas &
Consumable Fuels 0.2%
EXCO Resources, Inc.	54,280	$ 494,491
Paper & Forest
Products0.1%
Ainsworth Lumber Co. Ltd.	197,451	111,747
Ainsworth Lumber Co. Ltd. (b)	221,591	125,740
Western Forest Products, Inc. (g)	78,039	9,201
		246,688
Total Common Stocks1.0%		2,533,668

Capital Trusts	Par (000)
Diversified Financial
Services0.4%
Citigroup, Inc. Series E, 8.40% (d)(h)	USD	2,720	952,272
Total Capital Trusts0.4%			952,272

Warrants (i)	Shares
Health Care Providers
& Services0.0%
HealthSouth Corp. (expires 1/16/14)	54,577	1
Total Warrants0.0%		1

		Beneficial
		Interest
Other Interests (j)		(000)
Media0.0%
Adelphia Escrow	USD	1,300	130
Adelphia Recovery Trust		1,630	6,522
Total Other Interests0.0%			6,652
Total Long-Term Investments (Cost -
$467,110,477)118.1%			287,384,703
Short-Term Securities
BlackRock Liquidity Series, LLC Cash Sweep Series,
0.73% (k)(l)		11,405	11,405,172
Total Short-Term Securities
(Cost$11,405,172)4.7%			11,405,172
Total Investments
(Cost$478,515,649*)122.8%			298,789,875
Liabilities in Excess of Other
Assets(22.8)%			(55,569,212	)
Net Assets100.0%		$	243,220,663

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$
Gross unrealized appreciation	$ 973,704
Gross unrealized depreciation	(181,629,710	)
Net unrealized depreciation	$ (180,656,006	)

(a)	Convertible security.
(b)	Security exempt from
registration under Rule 144A of the Securities Act of 1933. These securities
may be resold in transactions exempt from registration to qualified
institutional investors.
(c)	Represents a
payment-in-kind security which may pay interest/dividends in additional
par/shares.
(d)	Variable rate security.
Rate shown is as of report date.

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	31

Schedule of Investments (concluded) BlackRock Corporate High Yield Fund VI, Inc. (HYT)

| (e) | Issuer filed for bankruptcy
and/or is in default of interest payments. |
| --- | --- |
| (f) | Represents a step-up bond
that pays an initial coupon rate for the first period and then a higher
coupon rate for the following periods. Rate shown reflects the current yield
as of report date. |
| (g) | Non-income producing
security. |
| (h) | Security is perpetual in
nature and has no stated maturity date. |
| (i) | Warrants entitle the Fund
to purchase a predetermined number of shares of common stock and are
non-income producing. The purchase price and number of shares are subject to
adjustment under certain conditions until the expiration date. |
| (j) | Other interests represent
beneficial interest in liquidation trusts and other reorganization entities
and are non-income producing. |
| (k) | Represents the current
yield as of report date. |
| (l) | Investments in companies
considered to be an affiliate of the Trust, for purposes of Section 2(a)(3)
of the Investment Company Act of 1940, were as follows: |

Affiliate — BlackRock Liquidity Series, LLC Cash Sweep Series	USD (2,872,011	)	$26,103

| | For Trust compliance
purposes, the Trusts industry classifications refer to any one or more of
the industry sub-classifications used by one or more widely recognized market
indexes or ratings group indexes, and/or as defined by Trust management. This
definition may not apply for purposes of this report, which may combine
industry sub-classification for reporting ease. |
| --- | --- |
| | Credit default swaps on
single name issues - buy protection outstanding as of February 28, 2009 were
as follows: |

Issuer	Pay Fixed Rate	Counterparty	Expiration	Notional Amount (000)	Unrealized Appreciation
Masco Corp.	5.85%	Goldman Sachs	March 2014	USD 1,300	$ 10,676
		Bank USA
Mohawk	4.70%	Goldman Sachs	March 2014	USD 1,300	1,534
Industries, Inc.		Bank USA
Total					$ 12,210

Credit default swaps on single name issues - sold protection outstanding as of February 28, 2009 were as follows:

Issuer 1	Receive Fixed Rate	Counterparty	Expiration	Notional Amount (000) 2	Unrealized Depreciation
Ford Motor Co.	3.80%	UBS AG	March 2010	USD 1,590	$ (1,114,234)
Ford Motor Co.	5.00%	Goldman Sachs
		Bank USA	June 2010	USD 6,330	(4,481,406)
Total					$ (5,595,640)

| 1 | Credit rating is C, using Standard and Poors
ratings. |
| --- | --- |
| 2 | The maximum potential amount the Trust may pay should
a negative credit event take place as defined under the terms of the
agreement. |

Foreign currency exchange contracts as of February 28, 2009 were as follows:

Currency Purchased — USD	280,648	Currency Sold — CAD	345,000	Counterparty — UBS AG	Settlement Date — 3/18/09	$ 9,480
USD	12,787,034	EUR	9,753,500	Deutsche Bank AG	3/18/09	424,032
USD	386,415	EUR	300,000	UBS AG	3/18/09	6,151
USD	295,317	EUR	228,000	Citibank, NA	3/18/09	6,316
Total						$ 445,979


CAD	Canadian Dollar
EUR	Euro
USD	US Dollar


	Level 1 - price quotations in active
markets/exchanges for identical securities
	Level 2 - other observable inputs (including, but not
limited to: quoted prices for similar assets or liabilities in markets that
are not active, inputs other than quoted prices that are observable for the
assets or liabilities (such as interest rates, yield curves, volatilities, prepayment
speeds, loss severities, credit risks and default rates) or other
market-corroborated inputs)
	Level 3 - unobservable inputs based on the best
information available in the circumstance, to the extent observable inputs
are not available (including the Trusts own assumption used in determining
the fair value of investments)

The following table summarizes the inputs used as of February 28, 2009 in determining the fair valuation of the Trusts investments:

| Valuation Inputs | Investments
in Securities — Assets | Other
Financial Instruments* — Assets | Liabilities | |
| --- | --- | --- | --- | --- |
| Level 1 | $ 2,407,273 | | | |
| Level 2 | 269,222,856 | $ 458,189 | $ (5,595,640 | ) |
| Level 3 | 27,159,746 | | | |
| Total | $ 298,789,875 | $ 458,189 | $ (5,595,640 | ) |

Other financial instruments are swaps and foreign currency exchange contracts. Swaps and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:

| | Investments
in Securities | |
| --- | --- | --- |
| | Assets | |
| Balance as of August 31, 2008 | $ 2,999,871 | |
| Accrued discounts/premiums | 267,853 | |
| Realized gain | 655 | |
| Change in unrealized appreciation/depreciation 1 | (33,799,877 | ) |
| Net sales | 156,563 | |
| Net transfers in Level 3 | 57,534,681 | |
| Balance as of February 28, 2009 | $ 27,159,746 | |

1 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

See Notes to Financial Statements. — 32	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments February 28, 2009 (Unaudited) BlackRock High Income Shares (HIS) (Percentages shown are based on Net Assets)

| Corporate
Bonds | | | Value |
| --- | --- | --- | --- |
| Aerospace & Defense0.2% | | | |
| Hawker Beechcraft
Acquisition Co. LLC, 8.875%, 4/01/15 (a) | USD | 100 | $ 8,000 |
| L-3 Communications Corp.,
5.875%, 1/15/15 | | 140 | 129,150 |
| | | | 137,150 |
| Airlines0.5% | | | |
| American Airlines, Inc.
Series 99-1, 7.324%, 4/15/11 | | 280 | 263,200 |
| UAL Corp., 4.50%, 6/30/21
(b) | | 175 | 79,853 |
| | | | 343,053 |
| Auto Components1.8% | | | |
| Allison Transmission, Inc.
(c): | | | |
| 11%, 11/01/15 | | 335 | 162,475 |
| 11.25%, 11/01/15 (a) | | 450 | 173,250 |
| The Goodyear Tire &
Rubber Co.: | | | |
| 7.857%, 8/15/11 | | 690 | 552,000 |
| 8.625%, 12/01/11 | | 62 | 49,600 |
| Lear Corp., 8.75%, 12/01/16 | | 180 | 30,600 |
| Stanadyne Corp. Series 1,
10%, 8/15/14 | | 525 | 341,250 |
| | | | 1,309,175 |
| Automobiles0.6% | | | |
| Ford Capital BV, 9.50%,
6/01/10 | | 1,330 | 425,600 |
| Ford Motor Co., 8.90%,
1/15/32 | | 300 | 51,000 |
| | | | 476,600 |
| Building Products1.2% | | | |
| CPG International I, Inc.,
10.50%, 7/01/13 | | 540 | 286,200 |
| Momentive Performance
Materials, Inc., 11.50%, 12/01/16 | | 805 | 169,050 |
| Ply Gem Industries, Inc.,
11.75%, 6/15/13 | | 895 | 411,700 |
| | | | 866,950 |
| Capital Markets0.3% | | | |
| E*Trade Financial Corp.,
12.50%, 11/30/17 | | 451 | 207,460 |
| Chemicals3.4% | | | |
| American Pacific Corp., 9%,
2/01/15 | | 400 | 336,000 |
| Ames True Temper, Inc.,
5.094%, 1/15/12 (d) | | 1,070 | 695,500 |
| Innophos, Inc., 8.875%,
8/15/14 | | 1,170 | 930,150 |
| MacDermid, Inc., 9.50%,
4/15/17 (c) | | 755 | 298,225 |
| Terra Capital, Inc. Series
B, 7%, 2/01/17 | | 235 | 213,850 |
| | | | 2,473,725 |
| Commercial Services & Supplies2.8% | | | |
| Casella Waste Systems,
Inc., 9.75%, 2/01/13 | | 400 | 350,000 |
| Sally Holdings LLC, 9.25%,
11/15/14 | | 90 | 85,725 |
| Waste Services, Inc., 9.50%,
4/15/14 | | 800 | 632,000 |
| West Corp.: | | | |
| 9.50%, 10/15/14 | | 375 | 262,500 |
| 11%, 10/15/16 | | 1,195 | 764,800 |
| | | | 2,095,025 |
| Construction Materials0.6% | | | |
| Nortek, Inc., 10%, 12/01/13 | | 1,040 | 416,000 |
| Containers & Packaging7.2% | | | |
| Berry Plastics Holding
Corp., 5.871%, 9/15/14 (d) | | 300 | 139,500 |
| Crown Americas LLC, 7.75%,
11/15/15 | | 255 | 256,912 |
| Crown European Holdings SA,
6.25%, 9/01/11 | EUR | 595 | 731,681 |
| Graphic Packaging International
Corp., 9.50%, 8/15/13 | USD | 255 | 189,975 |
| Impress Holdings BV,
4.219%, 9/15/13 (c)(d) | | 775 | 573,500 |
| Jefferson Smurfit Corp. US,
7.50%, 6/01/13 (e) | | 1,000 | 80,000 |
| Owens Brockway Glass
Container, Inc.: | | | |
| 8.25%, 5/15/13 | | 2,600 | 2,626,000 |
| 6.75%, 12/01/14 | EUR | 175 | 197,452 |
| Pregis Corp., 12.375%,
10/15/13 | USD | 1,034 | 460,130 |
| Smurfit-Stone Container
Enterprises, Inc., 8%, 3/15/17 (e) | | 665 | 58,188 |
| | | | 5,313,338 |

| Corporate
Bonds | | Par (000) | |
| --- | --- | --- | --- |
| Diversified Financial Services4.2% | | | |
| Axcan Intermediate
Holdings, Inc., 12.75%, 3/01/16 | USD | 240 | $ 219,000 |
| FCE Bank Plc: | | | |
| 7.125%, 1/16/12 | EUR | 1,150 | 889,326 |
| Series JD, 3.991%, 9/30/09 (d) | | 125 | 133,114 |
| Ford Motor Credit Co. LLC: | | | |
| 8.625%, 11/01/10 | USD | 140 | 87,578 |
| 4.01%, 1/13/12 (d) | | 145 | 71,050 |
| 7.80%, 6/01/12 | | 1,500 | 813,033 |
| GMAC LLC (c): | | | |
| 6.875%, 8/28/12 | | 449 | 258,507 |
| 3.461%, 12/01/14 (d) | | 356 | 156,640 |
| Leucadia National Corp.,
8.125%, 9/15/15 | | 600 | 498,000 |
| | | | 3,126,248 |
| Diversified Telecommunication Services9.8% | | | |
| Broadview Networks
Holdings, Inc., 11.375%, 9/01/12 | | 480 | 249,600 |
| Cincinnati Bell, Inc.,
7.25%, 7/15/13 | | 2,085 | 1,991,175 |
| Qwest Capital Funding,
Inc., 7%, 8/03/09 | | 230 | 229,425 |
| Qwest Communications
International, Inc.: | | | |
| 7.50%, 2/15/14 | | 910 | 771,225 |
| 3.50%, 11/15/25 (b) | | 200 | 178,750 |
| Series B, 7.50%, 2/15/14 | | 640 | 542,400 |
| Qwest Corp., 5.246%,
6/15/13 (d) | | 850 | 720,375 |
| Wind Acquisition Finance
SA, 10.75%, 12/01/15 (c) | | 1,100 | 1,102,750 |
| Windstream Corp.: | | | |
| 8.125%, 8/01/13 | | 855 | 829,350 |
| 8.625%, 8/01/16 | | 645 | 619,200 |
| | | | 7,234,250 |
| Electric Utilities2.1% | | | |
| Edison Mission Energy,
7.50%, 6/15/13 | | 35 | 32,112 |
| Elwood Energy LLC, 8.159%,
7/05/26 | | 429 | 345,368 |
| Homer City Funding LLC
Series B, 8.734%, 10/01/26 | | 149 | 128,301 |
| NSG Holdings LLC, 7.75%,
12/15/25 (c) | | 565 | 452,000 |
| Salton Sea Funding Corp.
Series E, 8.30%, 5/30/11 | | 583 | 613,731 |
| | | | 1,571,512 |
| Electronic Equipment & Instruments0.1% | | | |
| Sanmina-SCI Corp., 8.125%,
3/01/16 | | 290 | 101,500 |
| Energy Equipment & Services1.4% | | | |
| Compagnie Generale de
Geophysique-Veritas: | | | |
| 7.50%, 5/15/15 | | 135 | 105,637 |
| 7.75%, 5/15/17 | | 220 | 170,500 |
| North American Energy
Partners, Inc., 8.75%, 12/01/11 | | 810 | 637,875 |
| Transocean, Inc. Series A,
1.625%, 12/15/37 (b) | | 155 | 138,144 |
| | | | 1,052,156 |
| Food & Staples Retailing0.3% | | | |
| Rite Aid Corp., 7.50%,
3/01/17 | | 425 | 229,500 |
| Food Products0.5% | | | |
| Tyson Foods, Inc., 10.50%,
3/01/14 (c) | | 400 | 377,000 |
| Gas Utilities0.3% | | | |
| Targa Resources, Inc.,
8.50%, 11/01/13 | | 305 | 192,150 |
| Health Care Equipment & Supplies3.2% | | | |
| Catalent Pharma Solutions,
Inc., 9.50%, 4/15/15 (a) | | 610 | 207,400 |
| DJO Finance LLC: | | | |
| 10.875%, 11/15/14 | | 2,400 | 1,824,000 |
| 11.75%, 11/15/14 | | 40 | 26,200 |
| Hologic, Inc., 2%, 12/15/37
(b)(f) | | 505 | 328,250 |
| | | | 2,385,850 |
| Health Care Providers & Services2.0% | | | |
| Community Health Systems,
Inc., 8.875%, 7/15/15 | | 125 | 118,281 |
| Tenet Healthcare Corp.: | | | |
| 6.375%, 12/01/11 | | 160 | 142,400 |
| 6.50%, 6/01/12 | | 1,395 | 1,241,550 |
| | | | 1,502,231 |

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	33

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown are based on Net Assets) |

Corporate Bonds	Par (000)		Value
Hotels,
Restaurants & Leisure4.7%
American Real Estate Partners LP, 7.125%, 2/15/13	USD	850	$ 699,125
Gaylord Entertainment Co.:
8%,
11/15/13		1,110	735,375
6.75%,
11/15/14		450	285,750
Great Canadian Gaming Corp., 7.25%, 2/15/15 (c)		1,390	973,000
Greektown Holdings, LLC, 10.75%, 12/01/13 (c)(e)(g)		649	58,410
Harrahs Operating Co., Inc.:
10.75%,
2/01/18 (a)		1,086	66,636
10%,
12/15/18 (c)		253	70,840
Seneca Gaming Corp. Series B, 7.25%, 5/01/12		630	466,200
Travelport LLC, 5.886%, 9/01/14 (d)		75	24,000
Tropicana Entertainment LLC, 9.625%, 12/15/14 (e)(g)		215	2,150
Virgin River Casino Corp., 9%, 1/15/12 (e)(g)		585	58,500
			3,439,986
Household
Durables0.6%
Jarden Corp., 7.50%, 5/01/17		550	429,000
IT
Services2.0%
Alliance Data Systems Corp., 1.75%, 8/01/13 (b)(c)		560	373,800
First Data Corp., 9.875%, 9/24/15		525	288,750
iPayment, Inc., 9.75%, 5/15/14		335	197,650
iPayment Investors LP, 12.75%, 7/15/14 (a)(c)		1,603	400,644
SunGard Data Systems, Inc., 10.625%, 5/15/15 (c)		270	228,150
			1,488,994
Independent
Power Producers & Energy Traders3.4%
AES Red Oak LLC Series B, 9.20%, 11/30/29		1,250	1,112,500
Energy Future Holdings Corp., 11.25%, 11/01/17 (a)		1,600	704,000
NRG Energy, Inc.:
7.25%,
2/01/14		100	94,250
7.375%,
2/01/16		465	428,962
Texas Competitive Electric Holdings Co. LLC, 10.50%,
11/01/16 (a)		430	206,400
			2,546,112
Industrial
Conglomerates0.5%
Sequa Corp. (c):
11.75%,
12/01/15		1,150	184,000
13.50%,
12/01/15 (a)		1,602	191,650
			375,650
Insurance0.9%
Alliant Holdings I, Inc., 11%, 5/01/15 (c)		800	516,000
USI Holdings Corp., 5.113%, 11/15/14 (c)(d)		310	147,250
			663,250
Machinery2.4%
AGY Holding Corp., 11%, 11/15/14		890	534,000
Accuride Corp., 8.50%, 2/01/15		340	102,000
RBS Global, Inc., 8.875%, 9/01/16		295	221,987
Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (c)		1,720	946,000
			1,803,987
Marine0.2%
Navios Maritime Holdings, Inc., 9.50%, 12/15/14		254	152,400
Media11.5%
Affinion Group, Inc., 10.125%, 10/15/13		1,045	809,875
CCO Holdings LLC, 8.75%, 11/15/13		100	78,000
CMP Susquehanna Corp., 9.875%, 5/15/14		865	25,950
CSC Holdings, Inc.:
8.50%,
4/15/14 (c)		180	172,800
Series B,
8.125%, 7/15/09		165	167,887
Cablevision Systems Corp. Series B, 8.334%, 4/01/09 (d)		750	750,000
Charter Communications Holdings II, LLC (e):
10.25%,
9/15/10		170	136,850
Series B,
10.25%, 9/15/10		455	364,000
DirecTV Holdings LLC, 8.375%, 3/15/13		420	424,200
EchoStar DBS Corp., 7%, 10/01/13		192	179,040
Corporate Bonds	Par (000)		Value
Media
(concluded)
Harland Clarke Holdings Corp.:
5.984%,
5/15/15 (d)	USD	160	$ 55,600
9.50%,
5/15/15		190	85,500
Intelsat Corp., 9.25%, 6/15/16 (c)		430	392,375
Intelsat Subsidiary Holding Co. Ltd., 8.875%, 1/15/15 (c)		130	122,850
Local Insight Regatta Hldgs, Inc., 11%, 12/01/17		304	72,960
Network Communications, Inc., 10.75%, 12/01/13		830	128,650
Nielsen Finance LLC:
11.625%,
2/01/14 (c)		110	95,150
10%,
8/01/14		850	701,250
ProtoStar I Ltd., 18%, 10/15/12 (b)(c)		1,427	785,073
Rainbow National Services LLC, 10.375%, 9/01/14 (c)		1,813	1,856,059
TL Acquisitions, Inc., 10.50%, 1/15/15 (c)		1,740	817,800
Virgin Media, Inc., 6.50%, 11/15/16 (b)(c)		550	287,375
			8,509,244
Metals
& Mining2.8%
AK Steel Corp., 7.75%, 6/15/12		120	103,200
Aleris International, Inc. (e):
9%,
12/15/14		200	20
10%,
12/15/16		680	850
FMG Finance Property Ltd. (c):
10%,
9/01/13		240	204,000
10.625%,
9/01/16		735	624,750
Freeport-McMoRan Copper & Gold, Inc., 7.084%, 4/01/15
(d)		260	194,350
Newmont Mining Corp., 1.625%, 7/15/17 (b)		270	291,263
Ryerson, Inc. (c):
8.545%,
11/01/14 (d)		180	91,800
12%,
11/01/15		100	59,000
Steel Dynamics, Inc., 7.375%, 11/01/12		380	328,700
Vedanta Resources Plc, 9.50%, 7/18/18 (c)		295	168,150
			2,066,083
Oil,
Gas & Consumable Fuels10.5%
Atlas Energy Resources LLC, 10.75%, 2/01/18 (c)		575	465,750
Berry Petroleum Co., 8.25%, 11/01/16		275	140,250
Chesapeake Energy Corp.:
9.50%,
2/15/15		805	748,650
6.375%,
6/15/15		350	286,125
6.625%,
1/15/16		235	192,112
7.25%,
12/15/18		405	329,062
2.25%,
12/15/38 (b)		375	199,219
Compton Petroleum Finance Corp., 7.625%, 12/01/13		245	82,075
Connacher Oil and Gas Ltd., 10.25%, 12/15/15 (c)		605	229,900
Corral Finans AB, 2.594%, 4/15/10 (a)(c)		945	525,004
Denbury Resources, Inc., 7.50%, 12/15/15		75	64,125
EXCO Resources, Inc., 7.25%, 1/15/11		1,115	890,606
Encore Acquisition Co., 6%, 7/15/15		130	100,750
Forest Oil Corp., 7.25%, 6/15/19 (c)		1,035	828,000
Massey Energy Co., 3.25%, 8/01/15 (b)		615	390,525
OPTI Canada, Inc., 8.25%, 12/15/14		980	333,200
PetroHawk Energy Corp. (c):
10.50%,
8/01/14		275	270,875
7.875%,
6/01/15		210	180,600
Sabine Pass LNG LP, 7.50%, 11/30/16		210	141,225
SandRidge Energy, Inc., 8%, 6/01/18 (c)		455	354,900
Whiting Petroleum Corp.:
7.25%,
5/01/12		70	58,800
7.25%,
5/01/13		1,155	941,325
			7,753,078
Paper
& Forest Products1.3%
Bowater, Inc.:
9%, 8/01/09		270	68,850
4.996%,
3/15/10 (d)		350	63,000
Domtar Corp., 7.875%, 10/15/11		100	85,250
Georgia-Pacific Corp., 8.125%, 5/15/11		75	72,750

See Notes to Financial Statements. — 34	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown are based on Net Assets) |

Corporate Bonds	Par (000)		Value
Paper
& Forest Products (concluded)
NewPage Corp., 10%, 5/01/12	USD	1,260	$ 381,150
Norske Skog Canada Ltd., 7.375%, 3/01/14		175	61,250
Verso Paper Holdings LLC Series B:
4.92%,
8/01/14 (d)		130	33,800
9.125%,
8/01/14		465	174,375
			940,425
Pharmaceuticals0.6%
Angiotech Pharmaceuticals, Inc., 5.011%, 12/01/13 (d)		630	385,875
Elan Finance Plc, 8.875%, 12/01/13		75	60,000
			445,875
Professional
Services0.4%
FTI Consulting, Inc., 7.75%, 10/01/16		275	271,562
Real
Estate Management & Development0.4%
Realogy Corp.:
10.50%,
4/15/14		1,105	232,050
12.375%,
4/15/15		674	80,880
			312,930
Semiconductors
& Semiconductor Equipment0.2%
Spansion, Inc., 4.386%, 6/01/13 (c)		550	128,563
Software0.1%
BMS Holdings, Inc., 9.224%, 2/15/12 (a)(c)(d)		208	50,238
Specialty
Retail3.4%
Asbury Automotive Group, Inc., 7.625%, 3/15/17		240	108,000
General Nutrition Centers, Inc.:
7.584%,
3/15/14 (a)(d)		800	472,000
10.75%,
3/15/15		895	626,500
Group 1 Automotive, Inc., 2.25%, 6/15/36 (f)		470	210,325
Lazy Days R.V. Center, Inc., 11.75%, 5/15/12 (e)(g)		2,275	182,000
Michaels Stores, Inc.:
10%,
11/01/14		370	126,262
11.375%,
11/01/16		480	113,400
Rent-A-Center, Inc. Series B, 7.50%, 5/01/10		367	351,402
United Auto Group, Inc., 7.75%, 12/15/16		710	340,800
			2,530,689
Textiles,
Apparel & Luxury Goods0.2%
Quiksilver, Inc., 6.875%, 4/15/15		350	175,000
Thrifts
& Mortgage Finance0.4%
Residential Capital Corp.:
8.50%,
5/15/10 (c)		370	255,300
8.375%,
6/30/10		160	64,000
			319,300
Wireless
Telecommunication Services10.0%
American Tower Corp., 7.125%, 10/15/12		1,000	997,500
Centennial Communications Corp., 7.185%, 1/01/13 (d)		650	646,750
Cricket Communications, Inc.:
9.375%,
11/01/14		540	492,750
10%,
7/15/15 (c)		420	387,450
Crown Castle International Corp., 9%, 1/15/15		425	414,375
Digicel Group Ltd. (c):
8.875%,
1/15/15		690	514,050
9.125%,
1/15/15 (a)		1,320	924,000
FiberTower Corp., 9%, 11/15/12 (b)		300	85,500
iPCS, Inc., 3.295%, 5/01/13 (d)		330	237,600
Leap Wireless International, Inc., 4.50%, 7/15/14 (b)(c)		100	67,500
MetroPCS Wireless, Inc., 9.25%, 11/01/14		1,255	1,185,975
Nordic Telephone Co. Holdings ApS, 8.875%, 5/01/16 (c)		580	527,800
Sprint Capital Corp., 7.625%, 1/30/11		1,085	941,238
			7,422,488
Total
Corporate Bonds99.0%			73,235,727
Floating Rate Loan Interests	Par (000)		Value
Auto
Components1.3%
Allison Transmission, Inc. Term Loan, 3.20%, 8/07/14	USD	1,049	$ 694,777
Dana Corp. Term Advance, 7.25%, 1/31/15		804	244,701
Delphi Automotive Systems:
Initial
Tranche C, 10.50%, 3/31/09		271	42,413
Subsequent
Tranche C Term Loan, 10.50%, 3/31/09		29	4,515
			986,406
Automobiles0.4%
Ford Motor Term Loan, 5%, 12/15/13		423	135,033
General Motors Corp. Term Secured Loan, 4.148%, 11/29/13		372	133,310
			268,343
Building
Products2.2%
Building
Material Corp. of America Term Loan Advance, 3.625% - 3.875%, 2/22/14		248	169,142
CPG International, I Inc. Term Loan B, 6.62%, 2/28/11		1,492	1,044,724
Stile Acquisition (Masonite International):
Canadian
Term Loan, 6.75%, 4/06/13		492	201,150
US Term
Loan, 6.25%, 4/06/13		499	203,713
			1,618,729
Chemicals0.9%
PQ Corp. Second Lien Loan, 7.68%, 5/29/15		1,500	525,000
Solutia, Inc. Term Loan, 8.50%, 2/28/14		225	144,563
			669,563
Health
Care Providers & Services1.8%
Community Health Systems, Inc.:
Delay Draw
Term Loan, 2.729%, 6/18/14		36	30,897
Term Loan
B, 2.729% - 3.506%, 7/25/14		714	604,131
HCA, Inc.
Term Loan A, 4.696%, 11/17/12		256	222,849
Rotech
Healthcare, Inc. Term Loan, 6.479%, 9/26/11 (a)		850	467,576
			1,325,453
Hotels,
Restaurants & Leisure0.5%
Travelport Inc. Term Loan, 7.909% - 7.979%, 3/20/12 (a)		1,937	397,135
Independent
Power Producers & Energy Traders2.0%
Calpine Corp. First Priority Term Loan, 4.335%, 3/29/14		299	216,514
Texas Competitive Electric Holdings Co. LLC (TXU):
Initial
Tranche Term Loan B-2, 3.948% - 4.451%, 10/10/14		545	340,233
Initial
Tranche Term Loan B-3, 3.948% - 4.451%, 10/10/14		1,481	923,930
			1,480,677
Machinery1.0%
Navistar International Transportation Corp.:
Revolving
Credit, 3.677% - 3.729%, 1/19/12		245	175,379
Term Loan,
3.729%, 1/19/12		680	486,766
Rexnord Corp. Loan, 9.181%, 3/02/13 (a)		195	48,751
			710,896
Media2.6%
Cengage
(Thomson Learning, Inc.) Tranche 1 Incremental Term Loan 2, 7.50%, 7/05/14		746	522,375
HMH
Publishing (Education Media):
Mezzanine
Term Loan, 10.756%, 11/14/14		2,665	799,444
Tranche A
Term Loan, 5.256%, 11/14/14		1,096	616,353
			1,938,172
Multiline
Retail0.3%
Dollar
General Term Loan B-1, 3.198% - 3.924%, 7/03/14		295	254,706
Oil, Gas & Consumable
Fuels1.1%
Turbo Beta
Limited Dollar Facility, 14.50%, 3/15/18		1,010	807,853
Paper & Forest
Products0.3%
Georgia-Pacific
LLC First Lien Term Loan B, 2.956% - 4.189%, 12/22/12		144	124,164
Verso Paper
Holdings LLC Term Loan, 7.685% - 8.435%, 2/01/13		432	86,426
			210,590
Total Floating Rate Loan
Interests14.4%			10,668,523

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	35

Schedule of Investments (concluded)
(Percentages shown are based on Net Assets)

Common Stocks		Shares	Value
Machinery0.0%
Goss
Holdings Inc. Class B (g)		64,467	$ 1
Total Common Stocks0.0%			1
Preferred Securities
Capital Trusts		Par (000)
Diversified Financial
Services0.4%
Citigroup,
Inc. Series E, 8.40% (d)(h)	USD	835	292,334
Total Capital Trusts0.4%			292,334
Preferred Stocks		Shares
Containers &
Packaging0.0%
Smurfit-Stone
Container Corp., 7% (a)(b)		30,000	9,000
Independent Power Producers &
Energy Traders0.7%
NTG Energy,
Inc., 4%		500	483,125
Media0.0%
Emmis
Communications Corp. Class A, 6.25% (b)		10,300	20,600
Total Preferred Stocks0.7%			512,725
Total Preferred Securities1.1%			805,059
Other Interests (i)		Beneficial Interest (000)
Health Care Providers &
Services0.0%
Critical
Care Systems International, Inc.	USD	5	953
Total Other Interests0.0%			953
Total Long-Term Investments
(Cost$135,257,327)114.5%			84,710,263
Short-Term Securities		Shares
BlackRock
Liquidity Funds, TempFund, 0.86% (j)(k)		5,081,539	5,081,539
Total Short-Term Securities
(Cost$5,081,539)6.9%			5,081,539
Total Investments (Cost$140,338,866*)121.4%			89,791,802
Liabilities in Excess of Other
Assets(21.4)%			(15,817,284	)
Net Assets100.0%			$ 73,974,518

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$
Gross unrealized appreciation	$ 361,553
Gross unrealized depreciation	(51,275,490	)
Net unrealized depreciation	$ (50,913,937	)

| (a) | Represents a payment-in-kind security which may pay
interest/dividends in additional par/shares. |
| --- | --- |
| (b) | Convertible security. |
| (c) | Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt
from registration to qualified institutional investors. |
| (d) | Variable rate security. Rate shown is as of report date. |
| (e) | Issuer filed for bankruptcy and/or is in default of
interest payments. |
| (f) | Represents a step-up bond that pays an initial coupon rate
for the first period and then a higher coupon rate for the following periods.
Rate shown reflects the current yield as of report date. |
| (g) | Non-income producing security. |
| (h) | Security is perpetual in nature and has no stated maturity
date. |
| (i) | Other interests represent beneficial interest in
liquidation trusts and other reorganization entities and are non-income
producing. |
| (j) | Represents the current yield as of report date. |
| (k) | Investments in companies considered to be an affiliate of
the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of
1940, were as follows: |

| Affiliate | | Net
Activity | Income |
| --- | --- | --- | --- |
| BlackRock Liquidity Funds, TempFund | USD | 5,081,539 | $ 1,539 |

| | For Trust compliance purposes, the Trusts industry
classifications refer to any one or more of the industry sub-classifications
used by one or more widely recognized market indexes or ratings group
indexes, and/or as defined by Trust management. This definition may not apply
for purposes of this report, which may combine industry sub-classification
for reporting ease. |
| --- | --- |
| | Foreign currency exchange contracts as of February 28,
2009 were as follows: |

Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation
USD	2,102,221	EUR	1,603,500	Deutsche Bank AG	3/18/09	$ 69,712
USD	154,566	EUR	120,000	UBS AG	3/18/09	2,460
Total						$ 72,172

		Currency Abbreviations: EUR Euro USD US Dollar
	The Trust has adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 157, Fair Value
Measurements (FAS 157). FAS 157 clarifies the definition of fair value,
establishes a framework for measuring fair values and requires additional
disclosures about the use of fair value measurements. Various inputs are used
in determining the fair value of investments, which are as follows:
		Level 1 - price quotations in active markets/exchanges for
identical securities
		Level 2 - other observable inputs (including, but not
limited to: quoted prices for similar assets or liabilities in markets that
are not active, inputs other than quoted prices that are observable for the
assets or liabilities (such as interest rates, yield curves, volatilities,
prepayment speeds, loss severities, credit risks, and default rates) or other
market-corroborated inputs)
		Level 3 - unobservable inputs based on the best
information available in the circumstance, to the extent observable inputs
are not available (including the Trusts own assumption used in determining
the fair value of investments)
	The inputs or methodology used for valuing securities are
not necessarily an indication of the risk associated with investing in those
securities. For information about the Trusts policy regarding valuation of
investments and other significant accounting policies, please refer to Note 1
of the Notes to Financial Statements.
	The following table summarizes the inputs used as of
February 28, 2009 in determining the fair valuation of the Trusts
investments:

| Valuation Inputs | Investments
in Securities | Other
Financial Instruments* |
| --- | --- | --- |
| | Assets | Assets |
| Level 1 | $ 5,090,539 | |
| Level 2 | 76,848,464 | $ 72,172 |
| Level 3 | 7,852,799 | |
| Total | $ 89,791,802 | $ 72,172 |

*
The following is a reconciliation of investments for
unobservable inputs (Level 3) used in determining fair value:

| | Investments
in Securities | |
| --- | --- | --- |
| | Assets | |
| Balance as of August 31, 2008 | $ 606,725 | |
| Accrued discounts/premiums | 5,046 | |
| Realized gain | 1,142 | |
| Change in unrealized appreciation/depreciation 1 | (8,649,120 | ) |
| Net purchases | 84,095 | |
| Net transfers in Level 3 | 15,804,911 | |
| Balance as of February 28, 2009 | $ 7,852,799 | |

1 Included in the related net change in unrealized appreciation/depreciation on the Statement of Operations.

See Notes to Financial Statements. — 36	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

| Schedule of
Investments February 28,
2009 (Unaudited) |
| --- |
| (Percentages shown
are based on Net Assets) |

Corporate Bonds	Par (000)	Value
Aerospace
& Defense0.1%
L-3 Communications Corp., 5.875%, 1/15/15	$ 20	$ 18,450
Air
Freight & Logistics0.1%
Park-Ohio Industries, Inc., 8.375%, 11/15/14	85	34,850
Airlines0.4%
American Airlines, Inc. Series 99-1, 7.324%, 4/15/11	95	89,300
UAL Corp., 4.50%, 6/30/21 (a)	60	27,378
		116,678
Auto
Components2.1%
Allison Transmission, Inc. (b):
11%,
11/01/15	120	58,200
11.25%,
11/01/15 (c)	150	57,750
The Goodyear Tire & Rubber Co.:
7.857%,
8/15/11	235	188,000
8.625%,
12/01/11	46	36,800
Lear Corp., 8.75%, 12/01/16	65	11,050
Stanadyne Corp. Series 1, 10%, 8/15/14	350	227,500
		579,300
Automobiles0.7%
Ford Capital BV, 9.50%, 6/01/10	520	166,400
Ford Motor Co., 8.90%, 1/15/32	125	21,250
		187,650
Building
Products1.0%
CPG International I, Inc., 10.50%, 7/01/13	150	79,500
Momentive Performance Materials, Inc., 11.50%, 12/01/16	235	49,350
Ply Gem Industries, Inc., 11.75%, 6/15/13	315	144,900
		273,750
Capital
Markets0.7%
E*Trade Financial Corp., 12.50%, 11/30/17	164	75,440
Marsico Parent Co., LLC, 10.625%, 1/15/16 (b)	174	71,340
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(c)	69	28,111
Marsico Parent Superholdco, LLC, 14.50%, 1/15/18 (b)(c)	47	19,137
		194,028
Chemicals3.1%
American Pacific Corp., 9%, 2/01/15	140	117,600
Ames True Temper, Inc., 5.094%, 1/15/12 (d)	265	172,250
Innophos, Inc., 8.875%, 8/15/14	545	433,275
MacDermid, Inc., 9.50%, 4/15/17 (b)	265	104,675
Terra Capital, Inc. Series B, 7%, 2/01/17	30	27,300
		855,100
Commercial
Services & Supplies3.0%
DI Finance Series B, 9.50%, 2/15/13	201	182,910
Sally Holdings LLC, 9.25%, 11/15/14	35	33,337
US Investigations Services, Inc., 10.50%, 11/01/15 (b)	100	79,500
Waste Services, Inc., 9.50%, 4/15/14	185	146,150
West Corp.:
9.50%,
10/15/14	125	87,500
11%,
10/15/16	475	304,000
		833,397
Construction
Materials0.6%
Nortek, Inc., 10%, 12/01/13	405	162,000
Containers
& Packaging2.3%
Berry Plastics Holding Corp., 5.871%, 9/15/14 (d)	75	34,875
Cascades, Inc., 7.25%, 2/15/13	175	100,187
Crown Americas LLC, 7.75%, 11/15/15	85	85,637
Graphic Packaging International Corp., 9.50%, 8/15/13	100	74,500
Impress Holdings BV, 4.219%, 9/15/13 (b)(d)	270	199,800
Pregis Corp., 12.375%, 10/15/13	310	137,950
Smurfit-Stone Container Enterprises, Inc., 8%, 3/15/17 (e)	220	19,250
		652,199

Corporate Bonds	Par (000)	Value
Diversified
Financial Services3.6%
CDX North America High Yield Series 6-T1, 8.625%, 6/29/11	$ 470	$ 448,850
Ford Motor Credit Co. LLC:
4.01%,
1/13/12 (d)	110	53,900
7.80%,
6/01/12	500	271,011
GMAC LLC, 3.461%, 12/01/14 (b)(d)	143	62,920
Leucadia National Corp., 8.125%, 9/15/15	200	166,000
		1,002,681
Diversified
Telecommunication Services8.3%
Asia Global Crossing Ltd., 13.375%, 10/15/10 (e)(f)	2,000	60,000
Broadview Networks Holdings, Inc., 11.375%, 9/01/12	195	101,400
Cincinnati Bell, Inc., 7.25%, 7/15/13	405	386,775
Qwest Communications International, Inc.:
7.50%,
2/15/14	685	580,538
3.50%,
11/15/25 (a)	70	62,563
Series B,
7.50%, 2/15/14	285	241,538
Qwest Corp., 5.246%, 6/15/13 (d)	230	194,925
Wind Acquisition Finance SA, 10.75%, 12/01/15 (b)	375	375,937
Windstream Corp.:
8.125%,
8/01/13	200	194,000
8.625%,
8/01/16	120	115,200
		2,312,876
Electric
Utilities2.0%
Elwood Energy LLC, 8.159%, 7/05/26	426	342,605
Homer City Funding LLC Series B, 8.734%, 10/01/26	96	82,775
NSG Holdings LLC, 7.75%, 12/15/25 (b)	170	136,000
		561,380
Electronic
Equipment & Instruments0.1%
Sanmina-SCI Corp., 8.125%, 3/01/16	110	38,500
Energy
Equipment & Services0.9%
Compagnie Generale de Geophysique-Veritas:
7.50%,
5/15/15	50	39,125
7.75%,
5/15/17	80	62,000
Hornbeck Offshore Services, Inc. Series B, 6.125%,
12/01/14	5	3,725
North American Energy Partners, Inc., 8.75%, 12/01/11	175	137,813
		242,663
Food
& Staples Retailing1.0%
The Pantry, Inc., 7.75%, 2/15/14	265	200,075
Rite Aid Corp., 7.50%, 3/01/17	155	83,700
		283,775
Gas
Utilities0.4%
Targa Resources, Inc., 8.50%, 11/01/13	185	116,550
Health
Care Equipment & Supplies3.0%
Biomet, Inc., 10%, 10/15/17	75	75,000
Catalent Pharma Solutions, Inc., 9.50%, 4/15/15 (c)	150	51,000
DJO Finance
LLC:
10.875%,
11/15/14	760	577,600
11.75%,
11/15/14	15	9,825
Hologic, Inc., 2%, 12/15/37 (a)(g)	185	120,250
		833,675
Health
Care Providers & Services2.5%
Community Health Systems, Inc., 8.875%, 7/15/15	25	23,656
Tenet Healthcare Corp.:
6.375%,
12/01/11	55	48,950
6.50%,
6/01/12	625	556,250
Viant Holdings, Inc., 10.125%, 7/15/17 (b)	115	57,500
		686,356
Hotels,
Restaurants & Leisure4.3%
American Real Estate Partners LP:
8.125%,
6/01/12	300	264,000
7.125%,
2/15/13	185	152,162
Gaylord
Entertainment Co.:
8%,
11/15/13	80	53,000
6.75%,
11/15/14	280	177,800
Great Canadian Gaming Corp., 7.25%, 2/15/15 (b)	320	224,000

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	37

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown
are based on Net Assets) |

Corporate Bonds	Par (000)	Value
Hotels,
Restaurants & Leisure (concluded)
Greektown Holdings, LLC, 10.75%, 12/01/13 (b)(e)(f)	$ 174	$ 15,660
Harrahs Operating Co., Inc.:
10%,
12/15/15 (b)	30	8,400
10.75%,
2/01/16	245	34,300
10.75%,
2/01/18 (c)	519	31,857
10%,
12/15/18 (b)	211	59,080
Seneca Gaming Corp. Series B, 7.25%, 5/01/12	140	103,600
Shingle Springs Tribal Gaming Authority, 9.375%, 6/15/15
(b)	40	23,400
Travelport LLC, 5.886%, 9/01/14 (d)	25	8,000
Tropicana Entertainment LLC, 9.625%, 12/15/14 (e)(f)	25	250
Virgin River Casino Corp., 9%, 1/15/12 (e)	445	44,500
		1,200,009
Household
Durables0.3%
Jarden Corp., 7.50%, 5/01/17	120	93,600
IT Services1.9%
Alliance Data Systems Corp., 1.75%, 8/01/13 (a)(b)	210	140,175
First Data Corp., 9.875%, 9/24/15	175	96,250
iPayment, Inc., 9.75%, 5/15/14	120	70,800
iPayment Investors LP, 12.75%, 7/15/14 (b)(c)	532	132,979
SunGard Data Systems, Inc., 10.625%, 5/15/15 (b)	100	84,500
		524,704
Independent
Power Producers & Energy Traders4.8%
AES Red Oak LLC:
Series A,
8.54%, 11/30/19	123	114,422
Series B,
9.20%, 11/30/29	500	445,000
Energy Future Holdings Corp., 11.25%, 11/01/17 (c)	575	253,000
NRG Energy, Inc.:
7.25%,
2/01/14	130	122,525
7.375%,
2/01/16	350	322,875
Texas Competitive Electric Holdings Co. LLC, 10.50%,
11/01/16 (c)	160	76,800
		1,334,622
Industrial
Conglomerates0.4%
Sequa Corp. (b):
11.75%,
12/01/15	380	60,800
13.50%,
12/01/15 (c)	530	63,445
		124,245
Insurance0.9%
Alliant Holdings I, Inc., 11%, 5/01/15 (b)	300	193,500
USI Holdings Corp., 5.113%, 11/15/14 (b)(d)	100	47,500
		241,000
Machinery1.7%
AGY Holding Corp., 11%, 11/15/14	200	120,000
Accuride Corp., 8.50%, 2/01/15	85	25,500
RBS Global, Inc., 8.875%, 9/01/16	70	52,675
Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (b)	510	280,500
		478,675
Marine0.2%
Navios Maritime Holdings, Inc., 9.50%, 12/15/14	106	63,600
Media10.8%
Affinion Group, Inc., 10.125%, 10/15/13	390	302,250
CCO Holdings LLC, 8.75%, 11/15/13	40	31,200
CMP Susquehanna Corp., 9.875%, 5/15/14	290	8,700
CSC Holdings, Inc.:
8.50%,
4/15/14 (b)	80	76,800
Series B,
8.125%, 7/15/09	60	61,050
Series B,
7.625%, 4/01/11	45	44,550
Cablevision Systems Corp. Series B, 8.334%, 4/01/09 (d)	175	175,000
Charter Communications Holdings II, LLC (e):
10.25%,
9/15/10	165	132,825
Series B,
10.25%, 9/15/10	65	52,000
DirecTV Holdings LLC, 8.375%, 3/15/13	175	176,750
EchoStar DBS Corp., 7%, 10/01/13	40	37,300

Corporate Bonds	Par (000)	Value
Media
(concluded)
Harland Clarke Holdings Corp.:
5.984%,
5/15/15 (d)	$ 50	$ 17,375
9.50%,
5/15/15	60	27,000
Intelsat Corp., 6.875%, 1/15/28	210	151,200
Local Insight Regatta Hldgs, Inc., 11%, 12/01/17	150	36,000
Network Communications, Inc., 10.75%, 12/01/13	245	37,975
Nielsen Finance LLC, 10%, 8/01/14	350	288,750
ProtoStar I Ltd., 18%, 10/15/12 (a)(b)	414	227,730
Rainbow National Services LLC (b):
8.75%,
9/01/12	310	310,388
10.375%,
9/01/14	378	386,978
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)	650	305,500
Virgin Media, Inc., 6.50%, 11/15/16 (a)(b)	205	107,113
		2,994,434
Metals
& Mining2.6%
AK Steel Corp., 7.75%, 6/15/12	25	21,500
Aleris International, Inc. (e):
9%,
12/15/14	120	12
10%,
12/15/16	125	156
FMG Finance Property Ltd. (b):
10%,
9/01/13	85	72,250
10.625%,
9/01/16	205	174,250
Freeport-McMoRan Copper & Gold, Inc., 7.084%, 4/01/15
(d)	170	127,075
Newmont Mining Corp., 1.625%, 7/15/17 (a)	100	107,875
Ryerson, Inc. (b):
8.545%,
11/01/14 (d)	60	30,600
12%,
11/01/15	70	41,300
Steel Dynamics, Inc., 7.375%, 11/01/12	115	99,475
Vedanta Resources Plc, 9.50%, 7/18/18 (b)	105	59,850
		734,343
Oil,
Gas & Consumable Fuels11.9%
Atlas Energy Resources LLC, 10.75%, 2/01/18 (b)	210	170,100
Berry Petroleum Co., 8.25%, 11/01/16	80	40,800
Chesapeake Energy Corp.:
9.50%,
2/15/15	300	279,000
6.375%,
6/15/15	90	73,575
6.625%,
1/15/16	250	204,375
7.25%,
12/15/18	75	60,937
2.25%,
12/15/38 (a)	125	66,406
Compton Petroleum Finance Corp., 7.625%, 12/01/13	100	33,500
Connacher Oil and Gas Ltd., 10.25%, 12/15/15 (b)	200	76,000
Corral Finans AB, 2.594%, 4/15/10 (b)(c)	344	190,909
Denbury Resources, Inc., 7.50%, 12/15/15	30	25,650
EXCO Resources, Inc., 7.25%, 1/15/11	370	295,537
Encore Acquisition Co., 6%, 7/15/15	40	31,000
Forest Oil Corp., 7.25%, 6/15/19 (b)	365	292,000
Frontier Oil Corp., 6.625%, 10/01/11	65	62,237
Massey Energy Co., 3.25%, 8/01/15 (a)	235	149,225
Newfield Exploration Co., 6.625%, 9/01/14	30	26,700
OPTI Canada, Inc., 8.25%, 12/15/14	440	149,600
Overseas Shipholding Group, Inc., 7.50%, 2/15/24	350	250,250
PetroHawk Energy Corp. (b):
10.50%,
8/01/14	100	98,500
7.875%,
6/01/15	15	12,900
Range Resources Corp., 7.375%, 7/15/13	185	177,138
Sabine Pass LNG LP, 7.50%, 11/30/16	130	87,425
SandRidge Energy, Inc., 8%, 6/01/18 (b)	165	128,700
Whiting Petroleum Corp.:
7.25%,
5/01/12	15	12,600
7.25%,
5/01/13	370	301,550
		3,296,614

See Notes to Financial Statements. — 38	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown
are based on Net Assets) |

Corporate Bonds	Par (000)	Value
Paper
& Forest Products1.2%
Ainsworth Lumber Co. Ltd., 11%, 7/29/15 (b)(c)	$ 19	$ 8,485
Bowater, Inc.:
9%, 8/01/09	60	15,300
4.996%,
3/15/10 (d)	130	23,400
Georgia-Pacific Corp., 8.125%, 5/15/11	30	29,100
NewPage Corp., 10%, 5/01/12	520	157,300
Norske Skog Canada Ltd., 7.375%, 3/01/14	120	42,000
Verso Paper Holdings LLC Series B:
4.92%,
8/01/14 (d)	40	10,400
9.125%,
8/01/14	165	61,875
		347,860
Pharmaceuticals0.5%
Angiotech Pharmaceuticals, Inc., 5.011%, 12/01/13 (d)	230	140,875
Professional
Services0.4%
FTI Consulting, Inc., 7.75%, 10/01/16	100	98,750
Real
Estate Management & Development0.3%
Realogy Corp.:
10.50%,
4/15/14	305	64,050
12.375%,
4/15/15	197	23,640
		87,690
Semiconductors
& Semiconductor Equipment0.2%
Spansion, Inc., 4.386%, 6/01/13 (b)(d)	190	44,413
Software0.1%
BMS Holdings, Inc., 9.224%, 2/15/12 (b)(c)(d)	76	18,249
Specialty
Retail2.2%
Asbury Automotive Group, Inc., 7.625%, 3/15/17	60	27,000
General Nutrition Centers, Inc.:
7.584%,
3/15/14 (c)(d)	280	165,200
10.75%,
3/15/15	225	157,500
Group 1 Automotive, Inc., 2.25%, 6/15/36 (a)(g)	25	11,188
Lazy Days R.V. Center, Inc., 11.75%, 5/15/12 (e)	468	37,440
Michaels Stores, Inc.:
10%,
11/01/14	85	29,006
11.375%,
11/01/16	140	33,075
Rent-A-Center, Inc. Series B, 7.50%, 5/01/10	75	71,813
United Auto Group, Inc., 7.75%, 12/15/16	180	86,400
		618,622
Textiles,
Apparel & Luxury Goods0.2%
Quiksilver, Inc., 6.875%, 4/15/15	100	50,000
Thrifts
& Mortgage Finance0.3%
Residential Capital LLC, 8.50%, 5/15/10 (b)	132	91,080
Trading
Companies & Distributors0.4%
Russel Metals, Inc., 6.375%, 3/01/14	125	100,000
Wireless
Telecommunication Services7.8%
Centennial Communications Corp., 7.185%, 1/01/13 (d)	220	218,900
Cricket Communications, Inc.:
9.375%,
11/01/14	220	200,750
10%,
7/15/15 (b)	145	133,762
Crown Castle International Corp., 9%, 1/15/15	95	92,625
Digicel Group Ltd. (b):
8.875%,
1/15/15	230	171,350
9.125%,
1/15/15 (c)	294	205,800
iPCS, Inc., 3.295%, 5/01/13 (d)	110	79,200
Leap Wireless International, Inc., 4.50%, 7/15/14 (a)(b)	40	27,000
MetroPCS Wireless, Inc., 9.25%, 11/01/14	495	467,775
Nordic Telephone Co. Holdings ApS, 8.875%, 5/01/16 (b)	270	245,700
Sprint Capital Corp., 7.625%, 1/30/11	370	320,975
		2,163,837
Total
Corporate Bonds89.3%		24,833,080

Non-U.S. Government Agency Mortgage-Backed Securities	Par (000)	Value
Commercial
Mortgage-Backed Securities1.4%
Crown Castle Towers LLC Series 2005-1A:
Class AFL,
0.841%, 6/15/35 (d)	$ 300	$ 273,000
Class AFX,
4.643%, 6/15/35 (b)	85	81,175
Global Signal Trust Series 2006-1 Class A2, 5.45%, 2/15/36	50	46,750
Total Non-U.S. Government Agency
Mortgage-Backed Securities1.4%		400,925
Floating Rate Loan Interests
Auto
Components1.4%
Allison Transmission, Inc. Term Loan, 3.20%, 8/07/14	399	264,576
Dana Corp. Term Advance, 7.25%, 1/31/15	311	94,613
Delphi
Automotive Systems Subsequent Tranche C Term Loan, 10.50%, 3/31/09	10	1,505
Delphi Corp. Initial Tranche C, 10.50%, 3/31/09	95	14,920
		375,614
Automobiles0.3%
Ford Motor Term Loan, 5%, 12/15/13	149	47,654
General Motors Corp. Secured Term Loan, 4.148%, 11/29/13	99	35,549
		83,203
Building
Products0.9%
Building
Material Corp. of America Term Loan Advance, 3.625% - 3.875%, 2/22/14	149	101,485
Stile Acquisition (Masonite International):
Canadian
Term Loan, 6.75%, 4/06/13	197	80,579
US Term
Loan, 6.25%, 4/06/13	199	81,365
		263,429
Chemicals0.9%
PQ Corp. Second Lien Loan, 7.68%, 5/29/15	500	175,000
Solutia, Inc. Term Loan, 8.50%, 2/28/14	112	72,281
		247,281
Health
Care Providers & Services1.5%
Community Health Systems, Inc.:
Delay Draw
Term Loan, 2.729%, 6/18/14	15	12,359
Term Loan
B, 4.439% - 4.446%, 7/25/14	285	241,653
Rotech Healthcare, Inc. Term Loan, 6.479%, 9/26/11 (c)	304	166,992
		421,004
Hotels,
Restaurants & Leisure0.4%
Travelport, Inc. Term Loan, 7.979%, 3/22/12 (c)	471	96,616
Independent
Power Producers & Energy Traders2.1%
Calpine Corp. First Priority Term Loan, 4.335%, 3/29/14	99	72,171
Texas Competitive Electric Holdings Co., LLC (TXU) Term
Loan:
Initial Tranche Term Loan B-2, 3.909% - 4.451%, 10/10/14	346	216,089
Initial Tranche Term Loan B-3, 3.909% - 4.451%, 10/10/14	494	307,977
		596,237
Machinery0.9%
Navistar International Transportation Corp.:
Revolving Credit, 3.671% - 3.729%, 1/19/12	90	64,425
Term Loan, 3.729%, 1/19/12	245	175,379
Rexnord Corp. Loan, 9.181%, 3/02/13 (c)	61	15,235
		255,039
Media3.2%
Affinion Group, Inc. Loan, 8.523%, 3/01/12	325	146,250
Cengage
(Thomson Learning, Inc.) Tranche 1 Incremental Term Loan 2, 7.50%, 7/05/14	249	174,125
HMH Publishing (Education Media):
Mezzanine
Term Loan, 10.756%, 11/14/14	1,066	319,778
Tranche
Term Loan A, 4.409%, 11/14/14	438	246,541
		886,694
Multiline
Retail0.3%
Dollar
General Corp. Tranche Term Loan B-1, 3.159% - 3.924%, 7/03/14	105	90,658

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	39

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown
are based on Net Assets) |

Floating Rate Loan Interests	Par (000)	Value
Other0.4%
HCA, Inc.
Term Loan A, 3.459%, 11/17/12	$ 113	$ 97,903
Paper & Forest
Products0.3%
Georgia-Pacific
LLC First Lien Term Loan B, 2.409% - 4.189%, 12/22/12	51	44,058
Verso Paper
Holdings LLC Term Loan, 7.685% - 8.435%, 2/01/13	184	36,777
		80,835
Total Floating Rate Loan
Interests12.6%		3,494,513

Common Stocks	Shares
Paper & Forest
Products0.0%
Ainsworth
Lumber Co. Ltd.	2,234	1,264
Ainsworth
Lumber Co. Ltd. (b)	2,507	1,423
		2,687
Specialty
Retail0.0%
Mattress
Discounters Corp. (f)	14,992	0
Total Common Stocks0.0%		2,687

Preferred Securities — Capital Trusts	Par (000 )
Diversified Financial
Services0.4%
Citigroup,
Inc. Series E, 8.40% (d)(h)	$ 295	103,280
Total Capital Trusts0.4%		103,280

Preferred Stocks	Shares
Capital Markets0.0%
Marsico
Parent Superholdco, LLC, 16.75% (b)	12	5,220
Total Preferred Stocks0.0%		5,220
Total Preferred Securities0.4%		108,500

Warrants (i)
Communications
Equipment0.0%
PF Net
Communications, Inc. (expires 5/15/10) (b)	600
Diversified Telecommunication
Services0.0%
NEON
Communications, Inc. (expires 12/02/12)	53,622	1
Total Warrants0.0%		1

Other Interests (j)
Health Care Providers &
Services0.0%
Critical
Care Systems International, Inc.	$ 5	953
Total Other Interests0.0%		953

Options Purchased		Value
Exchange-Traded Call
Options
Marsico
Parent Superholdco LLC, expiring December 2009 at $942.86	3	$ 4,845
Total Options Purchased (Cost$2,933)0.0%		4,845
Total Long-Term Investments (Cost$49,005,990)103.7%		28,845,504

| Short-Term Securities — BlackRock
Liquidity Funds, TempFund, 0.86% (k)(l) | $ 2,491,381 | |
| --- | --- | --- |
| Total Short-Term Securities
(Cost$2,491,381)9.0% | 2,491,381 | |
| Total Investments (Cost$51,497,371*)112.7% | 31,336,885 | |
| Liabilities in Excess of Other
Assets(12.7)% | (3,533,061 | ) |
| Net Assets100.0% | $ 27,803,824 | |

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$
Gross unrealized appreciation	$ 52,389
Gross unrealized depreciation	(20,238,978	)
Net unrealized depreciation	$ (20,186,589	)

(a)	Convertible security.
(b)	Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt
from registration to qualified institutional investors.
(c)	Represents a payment-in-kind security which may pay
interest/dividends in additional par/shares.
(d)	Variable rate security. Rate shown is as of report date.
(e)	Issuer filed for bankruptcy and/or is in default of
interest payments.
(f)	Non-income producing security.
(g)	Represents a step-up bond that pays an initial coupon rate
for the first period and then a higher coupon rate for the following periods.
Rate shown reflects the current yield as of report date.
(h)	Security is perpetual in nature and has no stated maturity
date.
(i)	Warrants entitle the Trust to purchase a predetermined
number of shares of common stock and are non-income producing. The purchase
price and number of shares are subject to adjustment under certain conditions
until the expiration date.
(j)	Other interests represent beneficial interest in
liquidation trusts and other reorganization entities and are non-income producing.
(k)	Represents the current yield as of report date.
(l)	Investments in companies considered to be an affiliate of
the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of
1940, were as follows:

Affiliate		Income
BlackRock Liquidity Funds, TempFund	2,491,381	$ 1,381

For Trust compliance purposes, the Trusts industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. This definition may not apply for purposes of this report, which may combine industry sub-classification for reporting ease.

See Notes to Financial Statements. — 40	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (concluded) BlackRock High Yield Trust (BHY)

| | Level 1 - price quotations in active markets/exchanges for
identical securities |
| --- | --- |
| | Level 2 - other observable inputs (including, but not
limited to: quoted prices for similar assets or liabilities in markets that
are not active, inputs other than quoted prices that are observable for the
assets or liabilities (such as interest rates, yield curves, volatilities,
prepayment speeds, loss severities, credit risks, and default rates) or other
market-corroborated inputs) |
| | Level 3 - unobservable inputs based on the best
information available in the circumstance, to the extent observable inputs
are not available (including the Trusts own assumption used in determining
the fair value of investments) |

The following table summarizes the inputs used as of February 28, 2009 in determining the fair valuation of the Trusts investments:

| Valuation Inputs | Investments
in Securities | Other
Financial Instruments* |
| --- | --- | --- |
| | Assets | Assets |
| Level 1 | $ 2,492,646 | |
| Level 2 | 26,121,726 | $ 4,845 |
| Level 3 | 2,717,668 | |
| Total | $ 31,332,040 | $ 4,845 |

Other financial instruments are options, which are shown at market value.

The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:

| | Investments
in Securities | |
| --- | --- | --- |
| | Assets | |
| Balance as of August 31, 2008 | $ 191,332 | |
| Accrued discounts/premiums | 17,156 | |
| Realized gain | 357 | |
| Change in unrealized appreciation/depreciation 1 | (3,060,121 | ) |
| Net purchases | 32,430 | |
| Net transfers in Level 3 | 5,536,514 | |
| Balance as of February 28, 2009 | $ 2,717,668 | |

1 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	41

| Schedule of Investments February
28, 2009 (Unaudited) |
| --- |
| (Percentages shown are based on Net Assets) |

Corporate Bonds			Value
Aerospace &
Defense1.0%
Honeywell
International, Inc., 5.70%, 3/15/37	USD	915	$ 874,374
United
Technologies Corp.:
4.875%,
5/01/15 (a)		1,250	1,280,405
6.125%,
7/15/38		750	780,457
			2,935,236
Air Freight &
Logistics0.6%
Park-Ohio
Industries, Inc., 8.375%, 11/15/14		165	67,650
United
Parcel Service, Inc., 6.20%, 1/15/38		1,710	1,737,603
			1,805,253
Airlines0.0%
American
Airlines, Inc. Series 99-1, 7.324%, 4/15/11		120	112,800
Auto Components0.0%
Lear Corp.,
8.75%, 12/01/16		130	22,100
Beverages0.5%
Anheuser-Busch
InBev Worldwide, Inc., 8.20%, 1/15/39 (b)		1,525	1,478,574
Building Products0.1%
CPG
International I, Inc., 10.50%, 7/01/13		230	121,900
Momentive
Performance Materials, Inc., 11.50%, 12/01/16		245	51,450
			173,350
Capital Markets1.8%
Credit
Suisse (USA) Inc.:
6.125%,
11/15/11 (c)		700	708,848
7.125%,
7/15/32		1,000	944,797
The Goldman
Sachs Group, Inc., 6.60%, 1/15/12		1,000	1,002,941
Lehman
Brothers Holdings, Inc. (d)(e):
5.625%,
1/24/13		1,415	183,950
4.80%,
3/13/14		100	13,000
6.50%,
7/19/17		225	23
4.519%,
9/15/22 (f)		575	70,438
Series MTN,
7%, 9/27/27		550	71,500
Morgan
Stanley, 6.25%, 8/28/17		900	813,608
UBS AG
Series DPNT, 5.875%, 12/20/17		1,925	1,705,448
			5,514,553
Chemicals0.5%
American
Pacific Corp., 9%, 2/01/15		280	235,200
Ames True
Temper, Inc., 5.094%, 1/15/12 (f)		720	468,000
Innophos,
Inc., 8.875%, 8/15/14		975	775,125
			1,478,325
Commercial Banks2.1%
DEPFA ACS
Bank, 5.125%, 3/16/37 (b)		4,150	2,273,482
HSBC
Finance Corp., 6.50%, 5/02/36		1,275	1,127,845
Wells Fargo
& Co., 4.625%, 8/09/10 (a)		1,000	995,540
Wells Fargo
Bank NA, 7.55%, 6/21/10 (a)		2,000	2,043,812
			6,440,679
Commercial Services &
Supplies1.3%
Casella
Waste Systems, Inc., 9.75%, 2/01/13		2,250	1,968,750
DI Finance
Series B, 9.50%, 2/15/13		679	617,890
Waste
Services, Inc., 9.50%, 4/15/14		600	474,000
West Corp.,
11%, 10/15/16		1,210	774,400
			3,835,040
Computers &
Peripherals1.2%
International
Business Machines Corp., 8%, 10/15/38		3,100	3,684,145
Consumer Finance0.5%
SLM Corp.
(f):
1.299%,
7/27/09		1,175	1,093,894
Series A,
1.459%, 1/27/14		600	309,431
			1,403,325
Containers &
Packaging0.2%
Crown
Americas LLC, 7.75%, 11/15/15		150	151,125
Impress Holdings
BV, 4.219%, 9/15/13 (b)(f)		330	244,200
Pregis
Corp., 12.375%, 10/15/13		535	238,075
			633,400

Corporate Bonds			Value
Diversified Consumer
Services0.2%
Princeton
University, 5.70%, 3/01/39	USD	575	$ 562,074
Diversified Financial
Services2.7%
Bank of
America Corp.:
7.80%,
2/15/10 (a)		2,450	2,326,951
6%, 9/01/17		1,795	1,510,984
Bank of
America NA, 6.10%, 6/15/17 (a)		1,975	1,499,890
Ford Motor
Credit Co. LLC:
4.01%,
1/13/12 (f)		120	58,800
7.80%,
6/01/12		380	205,968
General
Electric Capital Corp., 6.75%, 3/15/32 (a)		3,000	2,457,570
			8,060,163
Diversified Telecommunication
Services5.9%
AT&T,
Inc., 6.55%, 2/15/39		4,075	3,781,604
BellSouth
Telecommunications, Inc., 7.446%, 12/15/95 (g)		1,700	663,896
Cincinnati
Bell, Inc., 7.25%, 7/15/13		470	448,850
Deutsche
Telekom International Finance BV, 5.75%, 3/23/16		325	319,036
Qwest
Communications International, Inc.:
7.50%,
2/15/14		35	29,662
Series B,
7.50%, 2/15/14		20	16,950
Qwest
Corp., 5.246%, 6/15/13 (f)		375	317,812
Telecom
Italia Capital SA, 4.95%, 9/30/14		4,375	3,768,892
Telefonica
Emisiones SAU, 7.045%, 6/20/36		1,000	1,019,432
Verizon
Communications, Inc.:
6.40%,
2/15/38		2,100	1,970,319
8.95%,
3/01/39		1,125	1,327,010
Verizon
Global Funding Corp., 7.75%, 6/15/32		575	588,373
Verizon
Maryland, Inc.:
Series A,
6.125%, 3/01/12 (a)		1,355	1,367,444
Series B,
5.125%, 6/15/33		540	391,195
Verizon
Virginia, Inc. Series A, 4.625%, 3/15/13		750	720,377
Wind
Acquisition Finance SA, 10.75%, 12/01/15 (b)		360	360,900
Windstream
Corp.:
8.125%,
8/01/13		410	397,700
8.625%,
8/01/16		250	240,000
			17,729,452
Electric Utilities5.1%
Alabama
Power Co., 6%, 3/01/39		550	545,837
Duke Energy
Carolinas LLC:
6.10%,
6/01/37		325	314,977
6%, 1/15/38		850	871,800
E.ON
International Finance BV, 6.65%, 4/30/38 (b)		1,575	1,577,846
EDP Finance
BV, 6%, 2/02/18 (b)		1,250	1,160,789
Edison
Mission Energy, 7.50%, 6/15/13		130	119,275
Electricite
de France SA, 6.95%, 1/26/39 (b)		1,400	1,407,788
Elwood
Energy LLC, 8.159%, 7/05/26		161	129,858
Florida
Power & Light Co., 4.95%, 6/01/35		575	513,379
Florida
Power Corp.:
6.35%,
9/15/37		1,450	1,513,796
6.40%,
6/15/38		800	840,943
Midwest
Generation LLC Series B, 8.56%, 1/02/16		83	82,437
PacifiCorp.,
6.25%, 10/15/37		650	664,400
Public
Service Co. of Colorado, 6.25%, 9/01/37		1,350	1,408,104
Southern
California Edison Co.:
5.625%,
2/01/36		675	661,217
Series
05-E, 5.35%, 7/15/35		150	141,411
Series
08-A, 5.95%, 2/01/38		1,100	1,126,836
The Toledo
Edison Co., 6.15%, 5/15/37		350	267,371
Virginia
Electric and Power Co., 8.875%, 11/15/38		1,550	1,926,061
			15,274,125
Electronic Equipment &
Instruments0.1%
Sanmina-SCI
Corp., 8.125%, 3/01/16		730	255,500
Energy Equipment &
Services0.4%
Compagnie
Generale de Geophysique-Veritas:
7.50%,
5/15/15		60	46,950
7.75%,
5/15/17		100	77,500

See Notes to Financial Statements. — 42	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

Corporate Bonds			Value
Energy
Equipment & Services (concluded)
North American Energy Partners, Inc., 8.75%, 12/01/11	USD	85	$ 66,938
Transocean, Inc., 6.80%, 3/15/38		1,175	1,073,730
			1,265,118
Food
& Staples Retailing1.4%
CVS Caremark Corp., 6.25%, 6/01/27		850	807,390
Rite Aid Corp., 7.50%, 3/01/17		560	302,400
Wal-Mart Stores, Inc.:
6.50%, 8/15/37		1,975	2,114,520
6.20%,
4/15/38		850	881,573
			4,105,883
Food
Products0.6%
Kraft Foods, Inc., 7%, 8/11/37		1,670	1,682,253
Gas
Utilities0.1%
Targa Resources, Inc., 8.50%, 11/01/13		360	226,800
Health
Care Equipment & Supplies0.4%
DJO Finance LLC, 10.875%, 11/15/14		1,530	1,162,800
Health
Care Providers & Services0.5%
Tenet Healthcare Corp., 6.50%, 6/01/12		1,640	1,459,600
Hotels,
Restaurants & Leisure0.5%
American Real Estate Partners LP, 7.125%, 2/15/13		350	287,875
Gaylord Entertainment Co., 6.75%, 11/15/14		250	158,750
Greektown Holdings, LLC, 10.75%, 12/01/13 (b)(d)(e)		305	27,450
McDonalds Corp., 5.70%, 2/01/39		850	846,274
Seneca Gaming Corp. Series B, 7.25%, 5/01/12		290	214,600
			1,534,949
Household
Durables0.3%
Irwin Land LLC:
Series A-1,
5.03%, 12/15/25		575	420,797
Series A-2,
5.30%, 12/15/35		780	540,907
			961,704
Household
Products0.3%
Kimberly-Clark, Corp., 6.625%, 8/01/37		975	1,040,866
IT
Services0.1%
iPayment, Inc., 9.75%, 5/15/14		270	159,300
iPayment Investors LP, 12.75%, 7/15/14 (b)(h)		1,057	264,255
			423,555
Independent
Power Producers & Energy Traders0.0%
NRG Energy, Inc., 7.25%, 2/01/14		50	47,125
Industrial
Conglomerates0.1%
Sequa Corp. (b):
11.75%,
12/01/15		760	121,600
13.50%,
12/01/15 (h)		840	100,441
			222,041
Insurance1.9%
Chubb Corp., 6%, 5/11/37		1,415	1,238,636
Hartford Life Global Funding Trusts, 2.166%, 9/15/09 (f)		1,020	978,338
MetLife, Inc., 5.70%, 6/15/35		1,200	952,429
Monument Global Funding Ltd., 0.641%, 6/16/10 (a)(f)		1,990	1,839,731
Prudential Financial, Inc., 5.70%, 12/14/36		950	580,258
			5,589,392
Machinery0.3%
AGY Holding Corp., 11%, 11/15/14		400	240,000
Accuride Corp., 8.50%, 2/01/15		305	91,500
Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (b)		1,050	577,500
			909,000
Marine0.3%
Nakilat, Inc. Series A, 6.067%, 12/31/33 (b)		1,100	718,146
Navios Maritime Holdings, Inc., 9.50%, 12/15/14		188	112,800
			830,946

Corporate Bonds			Value
Media5.3%
Affinion Group, Inc., 10.125%, 10/15/13	USD	740	$ 573,500
CMP Susquehanna Corp., 9.875%, 5/15/14		690	20,700
COX Communications, Inc., 8.375%, 3/01/39 (b)		925	889,228
Cablevision Systems Corp. Series B, 8.334%, 4/01/09 (f)		161	161,000
Charter Communications Holdings II, LLC (d)(e):
10.25%,
9/15/10		515	414,575
Series B,
10.25%, 9/15/10		160	128,000
Comcast Cable Communications Holdings, Inc.,
8.375%,
3/15/13		1,415	1,509,458
Comcast Cable Communications LLC, 6.75%, 1/30/11		1,000	1,036,191
DirecTV Holdings LLC, 8.375%, 3/15/13		140	141,400
EchoStar DBS Corp.:
7%,
10/01/13		48	44,760
7.125%,
2/01/16		75	67,688
Local Insight Regatta Hldgs, Inc., 11%, 12/01/17		977	234,480
Network Communications, Inc., 10.75%, 12/01/13		195	30,225
News America Holdings, Inc.:
8.45%,
8/01/34		2,475	2,319,585
8.15%,
10/17/36		145	137,062
Nielsen Finance LLC, 10%, 8/01/14		1,060	874,500
Rainbow National Services LLC (b):
8.75%,
9/01/12		225	225,281
10.375%,
9/01/14		1,070	1,095,412
TCI Communications, Inc., 8.75%, 8/01/15		1,495	1,566,860
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)		1,310	615,700
Time Warner Cable, Inc.:
6.55%,
5/01/37		800	672,750
7.30%,
7/01/38		1,925	1,756,070
Time Warner Cos., Inc., 7.57%, 2/01/24		1,635	1,509,574
			16,023,999
Metals
& Mining0.9%
AK Steel Corp., 7.75%, 6/15/12		630	541,800
Falconbridge Ltd.:
6%,
10/15/15		600	438,418
6.20%,
6/15/35		1,550	932,424
Freeport-McMoRan Copper & Gold, Inc., 7.084%, 4/01/15
(f)		660	493,350
Teck Cominco Ltd., 6.125%, 10/01/35		630	302,400
			2,708,392
Multi-Utilities0.4%
Energy East Corp., 6.75%, 7/15/36		1,675	1,230,006
Oil, Gas
& Consumable Fuels6.2%
Anadarko Petroleum Corp., 6.45%, 9/15/36		2,625	2,004,552
Berry Petroleum Co., 8.25%, 11/01/16		160	81,600
Burlington Resources Finance Co., 7.40%, 12/01/31 (a)		950	1,000,596
Canadian Natural Resources Ltd.:
6.50%,
2/15/37		430	333,301
6.25%,
3/15/38		500	373,332
6.75%,
2/01/39		950	757,388
Chesapeake Energy Corp., 6.375%, 6/15/15		175	143,063
Compton Petroleum Finance Corp., 7.625%, 12/01/13		90	30,150
Conoco Funding Co., 7.25%, 10/15/31		150	157,188
ConocoPhillips Canada Funding Co., 5.95%, 10/15/36		150	139,284
ConocoPhillips Holding Co., 6.95%, 4/15/29 (a)		700	711,346
Devon Energy Corp., 7.95%, 4/15/32		650	683,277
EXCO Resources, Inc., 7.25%, 1/15/11		435	347,456
EnCana Corp.:
6.50%,
8/15/34		70	56,205
6.625%,
8/15/37		775	645,984
6.50%,
2/01/38		675	563,111
Encore Acquisition Co., 6%, 7/15/15		50	38,750
Marathon Oil Corp., 7.50%, 2/15/19		1,150	1,117,116
MidAmerican Energy Co., 5.80%, 10/15/36		800	734,725
MidAmerican Energy Holdings Co.:
5.95%,
5/15/37		950	850,789
6.50%,
9/15/37		2,115	2,039,334

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	43

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

Corporate Bonds			Value
Oil, Gas
& Consumable Fuels (concluded)
Nexen, Inc., 6.40%, 5/15/37	USD	600	$ 423,431
OPTI Canada, Inc., 8.25%, 12/15/14		490	166,600
Sabine Pass LNG LP, 7.50%, 11/30/16		350	235,375
Shell International Finance BV, 6.375%, 12/15/38		1,475	1,535,410
Valero Energy Corp., 6.625%, 6/15/37		550	419,937
Whiting Petroleum Corp.:
7.25%,
5/01/12		20	16,800
7.25%,
5/01/13		375	305,625
XTO Energy, Inc.:
6.75%,
8/01/37		2,125	1,895,496
6.375%,
6/15/38		925	782,178
			18,589,399
Paper
& Forest Products0.1%
Bowater, Inc., 4.996%, 3/15/10 (f)		90	16,200
NewPage Corp., 10%, 5/01/12		485	146,713
			162,913
Pharmaceuticals2.5%
Abbott Laboratories, 5.125%, 4/01/19		720	716,882
GlaxoSmithKline Capital, Inc., 6.375%, 5/15/38		1,500	1,576,895
Roche Holdings, Inc., 7%, 3/01/39 (b)		900	943,083
Schering-Plough Corp., 6.55%, 9/15/37		1,250	1,236,435
Teva Pharmaceutical Finance LLC, 6.15%, 2/01/36		1,475	1,344,572
Wyeth, 5.95%, 4/01/37		1,775	1,804,160
			7,622,027
Professional
Services0.0%
FTI Consulting, Inc., 7.75%, 10/01/16		125	123,438
Road
& Rail0.4%
Canadian National Railway Co., 6.375%, 10/15/11 (a)		1,000	1,066,324
Software0.8%
BMS Holdings, Inc., 9.224%, 2/15/12 (b)(f)(h)		126	30,415
Oracle Corp., 5.75%, 4/15/18 (a)(c)		2,300	2,325,841
			2,356,256
Specialty
Retail0.3%
General Nutrition Centers, Inc.:
6.404%,
3/15/14 (f)(h)		500	295,000
10.75%,
3/15/15		405	283,500
Lazy Days R.V. Center, Inc., 11.75%, 5/15/12 (d)(e)		357	28,560
Michaels Stores, Inc.:
10%,
11/01/14		435	148,444
11.375%,
11/01/16		150	35,438
			790,942
Textiles,
Apparel & Luxury Goods0.0%
Quiksilver, Inc., 6.875%, 4/15/15		250	125,000
Wireless
Telecommunication Services1.4%
Cricket Communications, Inc., 9.375%, 11/01/14		105	95,813
Digicel Group Ltd., 8.875%, 1/15/15 (b)		270	201,150
MetroPCS Wireless, Inc., 9.25%, 11/01/14		80	75,600
Nordic Telephone Co. Holdings ApS, 8.875%, 5/01/16 (b)		935	850,850
Rogers Communications, Inc., 7.50%, 8/15/38		1,175	1,183,999
Sprint Capital Corp.:
6.875%,
11/15/28		930	513,825
8.75%,
3/15/32		350	210,875
Vodafone Group Plc, 7.75%, 2/15/10		1,000	1,039,343
			4,171,455
Total Corporate Bonds49.3%			147,830,277

| Asset-Backed Securities — Ameriquest
Mortgage Securities, Inc. Series 2004-R11 Class A1, 0.776%, 11/25/34 (f) | 1,103 | $ | 819,779 |
| --- | --- | --- | --- |
| Chase
Issuance Trust: | | | |
| Series
2007-A17 Class A, 5.12%, 10/15/14 | 2,600 | | 2,635,880 |
| Series
2008-A9 Class A9, 4.26%, 5/15/13 | 770 | | 772,807 |
| Citibank
Omni Master Trust Series 2007-A9A Class A9, 1.573%, 12/23/13 (f) | 2,795 | | 2,500,888 |
| Daimler
Chrysler Auto Trust Series 2006-A Class A3, 5%, 5/08/10 | 239 | | 238,085 |
| Ford Credit
Auto Owner Trust Series 2006-A Class A3, 5.05%, 3/15/10 | 41 | | 40,901 |
| Harley-Davidson
Motorcycle Trust Series 2005-2 Class A2, 4.07%, 2/15/12 | 1,229 | | 1,195,321 |
| Home Equity
Asset Trust Series 2007-2 Class 2A1, 0.584%, 7/25/37 (f) | 646 | | 544,901 |
| JPMorgan
Mortgage Acquisition Corp. Series 2007-CH5 Class A3, 0.584%, 6/25/37 (f) | 3,730 | | 2,340,408 |
| SLM Student
Loan Trust Series 2008-5 (f): | | | |
| Class A2,
2.259%, 10/25/16 | 3,300 | | 3,104,709 |
| Class A3,
2.459%, 1/25/18 | 840 | | 755,548 |
| Class A4,
2.859%, 7/25/23 | 2,250 | | 2,038,186 |
| Small Business
Administration Participation Certificates Series 1996-20K Class 1, 6.95%,
11/01/16 | 535 | | 570,407 |
| Sterling
Bank Trust Series 2004-2 Class Note, 2.081%, 3/30/30 (i) | 7,122 | | 434,004 |
| Sterling
Coofs Trust Series 1, 2.362%, 4/15/29 (i) | 9,156 | | 852,677 |
| USAA Auto
Owner Trust Series 2006-1 Class A3, 5.01%, 9/15/10 (b) | 211 | | 211,213 |
| Wachovia
Auto Owner Trust Series 2006-A Class A4, 5.38%, 3/20/13 | 2,275 | | 2,072,717 |
| Total Asset-Backed Securities7.1% | | | 21,128,431 |
| Foreign Government Obligations | | | |
| Italy Government International Bond, 5.375%, 6/15/33 | 470 | | 459,980 |
| Total Foreign Government Obligations0.2% | | | 459,980 |
| U.S. Government Agency Mortgage-Backed
Securities | | | |
| Fannie Mae Guaranteed Pass-Through Certificates: | | | |
| 4.50%,
3/15/39 (j) | 7,400 | | 7,413,875 |
| 5.00%,
7/01/35 - 3/15/39 (j)(k) | 19,228 | | 19,586,974 |
| 5.50%,
12/01/13 - 6/01/36 (a)(c)(k) | 20,941 | | 21,577,600 |
| 6.00%,
3/01/16 - 3/15/39 (j) | 5,775 | | 5,971,657 |
| 7.00%,
2/01/24 - 8/01/36 | 76 | | 80,394 |
| Freddie Mac Mortgage Participation Certificates: | | | |
| 6.00%,
3/15/39 (j) | 600 | | 621,000 |
| Ginnie Mae MBS Certificates: | | | |
| 8.00%,
4/15/24 - 6/15/25 | 73 | | 78,777 |
| Total U.S. Government Agency
Mortgage-Backed Securities18.5% | | | 55,330,277 |
| U.S. Government Agency Mortgage-Backed SecuritiesCollateralized Mortgage Obligations | | | |
| Fannie Mae Trust Series: | | | |
| G-7 Class
S, 116.20%, 3/25/21 (f) | | (l) | 2,527 |
| G-10 Class
S, 0.575%, 5/25/21 (i) | 376 | | 7,759 |
| G-12 Class
S, 0.608%, 5/25/21 (i) | 308 | | 4,740 |
| G-17 Class
S, 0.58%, 6/25/21 (f) | 195 | | 3,628 |
| G-33 Class
PV, 1.078%, 10/25/21 (i) | 249 | | 5,132 |
| G-46 Class
H, 1.043%, 12/25/09 (i) | 252 | | 725 |
| G-49 Class
S, 982.80%, 12/25/21 (f) | | (l) | 1,781 |
| G92-5 Class
H, 9%, 1/25/22 (i) | 61 | | 9,656 |

See Notes to Financial Statements. — 44	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

U.S. Government Agency Mortgage-Backed SecuritiesCollateralized Mortgage Obligations
Fannie Mae Trust Series (concluded):
7 Class 2,
8.50%, 4/01/17 (i)	USD	4	$	500
89 Class 2,
8%, 10/01/18 (i)		7		933
94 Class 2,
9.50%, 8/01/21 (i)		2		383
203 Class
1, 0%, 2/01/23 (m)		15		12,848
228 Class
1, 0%, 6/01/23 (m)		11		9,945
378 Class
19, 5%, 6/01/35 (i)		3,863		388,802
1990-123
Class M, 1.01%, 10/25/20 (i)		16		333
1990-136
Class S, 19.578%, 11/25/20 (i)		9,993		13,037
1991-38
Class N, 1.009%, 4/25/21 (i)		11		83
1991-46
Class S, 1.403%, 5/25/21 (f)		71		3,070
1991-87
Class S, 25.358%, 8/25/21 (f)		41		50,414
1991-99
Class L, 0.93%, 8/25/21 (i)		90		1,697
1991-139
Class PT, 0.648%, 10/25/21 (i)		163		1,271
1991-167
Class D, 0%, 10/25/17 (m)		9		8,441
1993-51
Class E, 0%, 2/25/23 (m)		51		42,177
1993-70
Class A, 0%, 5/25/23 (m)		9		7,965
1994-23
Class PS, 12.685%, 4/25/23 (f)		323		326,538
1997-50
Class SI, 1.20%, 4/25/23 (i)		273		7,669
2004-90
Class IH, 6.226%, 11/25/34 (i)		19,231		1,554,979
2005-5
Class PK, 5%, 12/25/34		2,191		2,264,095
Freddie Mac Multiclass Certificates Series:
19 Class R,
9.757%, 3/15/20 (f)		6		1,082
75 Class R,
10%, 1/15/21			(m)	2
75 Class
RS, 19.151%, 1/15/21 (f)			(m)	2
173 Class
R, 0%, 11/15/21		9		9
173 Class
RS, 9.131%, 11/15/21			(m)	9
176 Class
M, 1.01%, 7/15/21 (i)		20		400
192 Class
U, 1.009%, 2/15/22 (i)		21		447
200 Class R,
98.523%, 12/15/22 (i)		1		10
1043 Class
H, 42.750%, 2/15/21 (i)		5,287		8,574
1054 Class
I, 0.435%, 3/15/21 (i)		54		872
1056 Class
KD, 1.085%, 3/15/21		47		956
1057 Class
I, 1.008%, 3/15/21		58		1,199
1148 Class
E, 0.593%, 10/15/21 (i)		144		2,830
1179 Class
O, 1.009%, 11/15/21 (i)		18		91
1254 Class
Z, 8.50%, 4/15/22 (i)		120		111
1611 Class
IC, 10%, 8/15/23 (f)		206		211,211
1739 Class
B, 0%, 2/15/24 (m)		57		52,579
1831 Class
PG, 6.50%, 3/15/11 (i)		87		3,781
2611 Class
QI, 5.50%, 9/15/32 (i)		4,818		443,820
3174 Class
PZ, 5%, 1/15/36		7,676		7,177,997
Total U.S. Government Agency
Mortgage-Backed SecuritiesCollateralized Mortgage Obligations4.2%				12,637,110
Non-U.S. Government Agency
Mortgage-Backed Securities
Collateralized
Mortgage Obligations8.1%
Banc of
America Funding Corp. Series 2007-2 Class 1A2, 6%, 3/25/37		1,100		312,300
Bear Stearns
Adjustable Rate Mortgage Trust Series 2007-1 Class 2A1, 5.444%, 2/25/47 (f)		1,103		545,276
Citicorp
Mortgage Securities, Inc. Series 2006-5 Class 1A3, 6%, 10/25/36		1,100		717,417
Citigroup
Mortgage Loan Trust, Inc. Series 2005-4 Class A, 5.343%, 8/25/35 (b)(f)		4,656		3,467,248
Collateralized
Mortgage Obligation Trust:
Series 40
Class R, 0.58%, 4/01/18		120		120
Series 42
Class R, 6%, 10/01/14 (i)		16		1,038
Countrywide
Alternative Loan Trust:
Series
2005-64CB Class 1A15, 5.50%, 12/25/35		1,700		550,671
Series
2006-0A21 Class A1, 0.66%, 3/20/47 (f)		1,032		417,527
Countrywide
Home Loan Mortgage Pass-Through Trust:
Series
2006-0A5 Class 2A1, 0.674%, 4/25/46 (f)		442		181,116
Series
2007-10 Class A22, 6%, 7/25/37		1,204		541,983

Non-U.S. Government Agency Mortgage-Backed Securities
Collateralized
Mortgage Obligations (concluded)
Deutsche
Alt-A Securities, Inc. Alternate Loan Trust:
Series
2003-3 Class 2A1, 5.50%, 10/25/33	USD	1,294	$	1,106,159
Series
2006-0A1 Class A1, 0.674%, 2/25/47 (f)		350		142,956
GSMPS
Mortgage Loan Trust Series 1998-5 Class IO, 0.909%, 6/19/27 (i):		3,253		38,714
GSR
Mortgage Loan Trust (f):
Series
2005-AR4 Class 6A1, 5.25%, 7/25/35		4,754		3,267,517
Series
2006-0A1 Class 2A1, 0.664%, 8/25/46		1,020		564,082
Series
2006-AR1 Class 2A1, 5.18%, 1/25/36		1,042		657,382
Harborview
Mortgage Loan Trust Series 2005-8 Class 1A2A, 0.796%, 9/19/35 (f)		115		45,969
Homebanc
Mortgage Trust Series 2006-2 Class A1, 0.654%, 12/25/36 (f)		1,045		467,926
Indymac
IMJA Mortgage Loan Trust Series 2007-A1 Class A4, 6%, 8/25/37		1,100		506,000
JPMorgan
Mortgage Trust:
Series
2007-S1 Class 2A22, 5.75%, 3/25/37		1,045		686,379
Series
2007-S2 Class 1A15, 6.75%, 6/25/37		1,276		807,469
Maryland
Insurance Backed Securities Trust Series 2006-1A Class, 5.55%, 12/10/65		2,500		1,125,000
Merrill
Lynch Mortgage Investors, Inc. Series 2006-A3 Class 3A1, 5.823%, 5/25/36
(f)(n)		1,027		512,097
Residential
Funding Securities LLC Series 2003-RM2 Class AI5, 8.50%, 5/25/33		6,118		5,690,498
Salomon
Brothers Mortgage Securities VII, Inc. Series 2000-1 Class IO, 0.464%, 3/25/22
(i)		899		41
Summit
Mortgage Trust Series 2000-1 Class B1, 7.008%, 12/28/12 (f)			(m)	123
WaMu
Mortgage Pass-Through Certificates (f):
Series
2007-0A4 Class 1A, 2.593%, 5/25/47		487		190,877
Series
2007-0A5 Class 1A, 2.573%, 6/25/47		432		179,600
Wells Fargo
Mortgage Backed Securities Trust:
Series
2006-3 Class A9, 5.50%, 3/25/36		873		708,337
Series
2006-AR4 Class 2A4, 5.775%, 4/25/36 (b)(f)		300		145,847
Series
2007-10 Class 1A21, 6%, 7/25/37		1,120		577,292
				24,154,961
Commercial
Mortgage-Backed Securities15.5%
Bear
Stearns Commercial Mortgage Securities:
Series
2005-PWR7 Class A2, 4.945%, 2/11/41		2,275		1,945,868
Series
2005-PWR9 Class A2, 4.735%, 9/11/42		5,105		4,670,526
CS First
Boston Mortgage Securities Corp. Series 2002-CP5 Class A2, 4.94%, 12/15/35		2,970		2,701,248
Citigroup
Commercial Mortgage Trust Series 2008-C7 Class A4, 6.096%, 12/10/49 (f)		2,020		1,301,695
Citigroup/Deutsche
Bank Commercial Mortgage Trust Series 2007-CD5 Class A4, 5.886%, 11/15/44 (f)		3,075		1,989,233
Commercial
Mortgage Loan Trust Series 2008-LS1 Class A4B, 6.02%, 12/10/49 (f)		1,515		796,257
Commercial
Mortgage Pass-Through Certificates Series 2004-LB3A Class A3, 5.09%, 7/10/37
(f)		990		887,084
DLJ
Commercial Mortgage Corp. Series 2000-CKP1 Class A1B, 7.18%, 11/10/33		2,256		2,251,809
First Union
National Bank Commercial Mortgage Series 2000-C2 Class A2, 7.202%, 10/15/32		1,996		2,011,190
First Union-Lehman
Brothers-Bank of America Series 1998-C2 Class D, 6.778%, 11/18/35		2,630		2,531,886
GE Capital
Commercial Mortgage Corp. Series 2002-1A Class A3, 6.269%, 12/10/35		2,310		2,183,988
GMAC
Commercial Mortgage Securities, Inc.:
Series
2002-C3 Class A2, 4.93%, 7/10/39		2,580		2,346,691
Series
2004-C3 Class A4, 4.547%, 12/10/41		2,475		2,117,354
JPMorgan
Chase Commercial Mortgage Securities Corp.:
Series
2001-C1 Class A3, 5.857%, 10/12/35		1,990		1,910,587
Series 2004-CBX
Class A4, 4.529%, 1/12/37		2,380		1,957,370
LB-UBS
Commercial Mortgage Trust:
Series
2004-C4 Class A3, 5.077%, 6/15/29 (f)		2,530		2,185,742
Series
2005-C5 Class A4, 4.954%, 9/15/30 (b)		4,625		3,477,362

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	45

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

Non-U.S. Government Agency — Mortgage-Backed Securities		Par — (000)		Value
Commercial
Mortgage-Backed Securities (concluded)
Merrill
Lynch Mortgage Trust Series 2004BPC1 Class A3, 4.467%, 10/12/41 (f)(n)	USD	4,280	$	3,498,875
Morgan
Stanley Capital I:
Series
1997-HF1 Class X, 2.246%, 7/15/29 (i)		18		4
Series 2005-HQ6
Class A4A, 4.989%, 8/13/42		1,520		1,145,160
Series
2005-T17 Class A4, 4.52%, 12/13/41		2,695		2,396,396
Wachovia
Bank Commercial Mortgage Trust (f):
Series
2005-C21 Class A3, 5.209%, 10/15/44		940		859,522
Series
2006-C25 Class A4, 5.74%, 5/15/43		1,305		896,448
Series
2007-C33 Class A4, 5.902%, 2/15/51		1,105		558,391
				46,620,686
Total Non-U.S. Government Agency Mortgage-Backed Securities23.6%				70,775,647
U.S. Government Obligations
Fannie Mae:
6.345%,
10/09/19 (o)		6,125		3,224,739
7.125%,
1/15/30 (k)		4,000		5,445,320
5.625%,
7/15/37		825		929,300
Federal
Home Loan Banks:
5.375%,
9/30/22 (k)		5,600		6,019,255
5.25%,
12/09/22		700		758,813
5.365%,
9/09/24 (k)		1,100		1,212,539
Federal
Housing Administration, General Motors Acceptance Corp. Projects, Series 44, 7.43%, 8/01/22		71		70,354
Federal
Housing Administration:
Merrill
Projects, Series 29, 7.43%, 10/01/20 (n)		47		46,455
Merrill
Projects, Series 42, 7.43%, 9/25/22 (n)		46		45,833
Reilly
Project, Series B-11, 7.40%, 4/01/21		1,605		1,588,717
Westmore
Project, 7.25%, 4/01/21		1,585		1,568,815
Federal
National Mortgage Association, 1.75%, 3/23/11		4,555		4,561,643
Overseas
Private Investment Corp.:
4.09%,
5/29/12		372		407,747
4.30%,
5/29/12		932		1,059,325
4.64%,
5/29/12		787		907,031
4.68%,
5/29/12		445		494,429
4.87%,
5/29/12		3,379		3,935,193
Resolution
Funding Corp., 8.326%, 4/15/30 (o)		6,055		2,267,476
U.S.
Treasury Bonds, 6.125%, 11/15/27 (k)		1,510		1,931,621
U.S.
Treasury Inflation Indexed Bonds:
2.375%,
1/15/25		374		358,477
2.375%,
1/15/27		110		105,261
1.75%,
1/15/28 (k)		1,481		1,292,856
U.S. Treasury Notes, 3.50%, 2/15/39
(k)		500		480,080
Total U.S. Government
Obligations12.9%				38,711,279
Capital Trusts
Capital Markets0.0%
UBS
Preferred Funding Trust I, 8.622% (f)(p)		400		144,331
Commercial Banks0.4%
RBS Capital
Trust IV, 2.259% (f)(p)		525		74,977
Royal Bank
of Scotland Group Plc Series MTN, 7.64% (f)(p)		2,600		338,000
Wells Fargo
& Co. Series K, 7.98%, (f)(p)		1,350		675,000
				1,087,977
Diversified Financial
Services0.8%
JPMorgan
Chase Capital XXV, 6.80%, 10/01/37		3,265		2,438,367
Insurance0.9%
The
Allstate Corp., 6.50%, 5/15/57 (f)		2,150		1,225,500
American
International Group, Inc., 8.175%, 5/15/58 (b)(f)		260		41,542
Lincoln
National Corp., 6.05%, 4/20/67 (f)		750		285,000
Progressive
Corp., 6.70%, 6/15/37 (f)		665		361,341
The
Travelers Cos., Inc., 6.25%, 3/15/67 (f)		750		452,767
ZFS Finance
(USA) Trust V, 6.50%, 5/09/67 (b)(f)		575		227,125
				2,593,275
Total Capital Trusts2.1%				6,263,950
		Beneficial
		Interest
Other Interests		(000)	Value
Health Care Providers &
Services0.0%
Critical
Care Systems International, Inc. (q)	USD	1,895	$	381
Total Other Interests0.0%				381
Total Long-Term Investments (Cost$404,961,060)117.9%				353,137,332
Options Purchased		Contracts
(r)
Over-the-Counter Call Swaptions
Purchased
Receive a
fixed rate of 5.47% and pay a floating rate based on 3-month LIBOR, expiring May 2012, Broker Bank of America N.A.		12		1,716,858
Receive a
fixed rate of 4.88% and pay a floating rate based on 3-month LIBOR, expiring September 2013, Broker The Goldman Sachs Group, Inc.		26		1,515,202
Pay a fixed
rate of 4.705% and receive a floating rate based on the 3-month LIBOR, expiring November 2013, Broker JPMorgan Chase Bank		16		856,448
				4,088,508
Over-the-Counter Put Swaptions
Purchased
Pay a fixed
rate of 4.705% and receive a floating rate based on the 3-month LIBOR, expiring November 2013, Broker JPMorgan Chase Bank		16		497,360
Pay a fixed
rate of 5.50% and receive a floating rate based 3-month LIBOR, expiring December 2009, Broker Bank of America N.A.		3		60,131
Pay a fixed
rate of 4.88% and receive a floating rate based on 3-month LIBOR, expiring September 2013, Broker The Goldman Sachs Group, Inc.		26		728,650
Pay a fixed
rate of 5.47% and receive a floating rate based 3-month LIBOR, expiring May 2012, Broker Bank of America N.A.		12		375,925
				1,662,066
Total Options Purchased (Cost$4,111,260)1.9%				5,750,574
Total Investments Before TBA Sale Commitments and Options Written (Cost$409,072,320*)119.8%				358,887,906
		Par
TBA Sale Commitments (j)		(000 )
Fannie Mae
Pass-Through Certificates:
5.00%.
7/01/35 - 3/15/39	USD	(15,600	)	(15,868,133	)
5.50%,
12/01/13 - 6/01/36		(3,200	)	(3,303,593	)
Total TBA Sale Commitments (Proceeds$19,226,367)(6.4)%				(19,171,726)
Options Written		Contracts
(r)
Over-the-Counter Call Swaptions
Written
Pay a fixed
rate of 5.05% and receive a floating rate based on 3-month LIBOR, expiring May 2011, Broker CitiBank NA		15		(1,802,580	)
Pay a fixed
rate of 5.08% and receive a floating rate based on 3-month LIBOR, expiring May 2011, Broker The Goldman Sachs Group, Inc.		6		(769,060	)
Pay a fixed
rate of 5.325% and receive a floating rate based on 3-month LIBOR, expiring July 2013, Broker JPMorgan Chase Bank NA		9		(651,185	)

| See Notes to Financial Statements. — 46 | SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

| Options Written | Contracts
(r) | Value | |
| --- | --- | --- | --- |
| Over-the-Counter
Call Swaptions Written (concluded) | | | |
| Pay a fixed
rated of 5.485% and receive a floating rate based on expiring 3-month LIBOR, Broker JPMorgan Chase Bank NA | 5 | $ (893,543 | ) |
| Pay a fixed
rated of 5.67% and receive a floating rate based on 3-month LIBOR, expiring January 2010, Broker Citibank NA | 12 | (2,221,547 | ) |
| Pay a fixed
rate of 4.915% and receive a floating rate based on 3-month LIBOR, expiring November 2010, Broker Barclays Bank PLC | 15 | (1,740,885 | ) |
| Pay a fixed
rated of 1.9% and receive a floating rate based on 3-month LIBOR, expiring December 2009, Broker Citibank NA | 8 | (104,098 | ) |
| Pay a fixed
rated of 2.45% and receive a floating rate based on 3-month LIBOR, expiring December 2009, Broker Barclays Bank PLC | 11 | (125,543 | ) |
| | | (8,308,441 | ) |
| Over-the-Counter Put Swaptions
Written | | | |
| Receive a
fixed rate of 4.915% and pay a floating rate based on 3-month LIBOR, expiring November 2010, Broker Barclays Bank PLC | 15 | (417,345 | ) |
| Receive a
fixed rated of 2.45% and pay a floating rate based on 3-month LIBOR, expiring December 2009, Broker Barclays Bank PLC | 11 | (1,183,688 | ) |
| Receive a
fixed rate of 5.05% and pay a floating rate based on 3-month LIBOR, expiring May 2011, Broker CitiBank NA | 15 | (466,350 | ) |
| Receive a
fixed rate of 5.08% and pay a floating rate based on 3-month LIBOR, expiring May 2011, Broker The Goldman Sachs Group, Inc. | 6 | (190,071 | ) |
| Receive a
fixed rate of 5.325% and pay a floating rate based on 3-month LIBOR, expiring July 2013, Broker JPMorgan Chase Bank NA | 9 | (202,621 | ) |
| Receive a
fixed rate of 5.485% and pay a floating rate based on 3-month LIBOR, expiring October 2009, Broker JPMorgan Chase Bank NA | 5 | (30,841 | ) |
| Receive a
fixed rate of 5.67% and pay a floating rate based on 3-month LIBOR, expiring January 2010, Broker Citibank NA | 12 | (82,584 | ) |
| | | (2,573,500 | ) |
| Total Options Written (Premiums Received$7,443,775)(3.6)% | | (10,881,941 | ) |
| Total Investments, Net of TBA Sale
Commitments and Options Written109.8% | | 328,834,239 | |
| Liabilities in Excess of Other
Assets(9.8)% | | (29,244,884 | ) |
| Net Assets100.0% | | $ 299,589,355 | |

The cost and unrealized appreciation (depreciation) of Investments as of February 28, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$
Gross unrealized appreciation	9,410,174
Gross unrealized depreciation	(59,685,323	)
Net unrealized depreciation	$ (50,275,149	)

| (a) | All or a portion of the security has been pledged as
collateral in connection with swaps. |
| --- | --- |
| (b) | Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt
from registration to qualified institutional investors. |
| (c) | All or a portion of the security has been pledged as
collateral in connection with open financial futures contracts. |
| (d) | Non-income producing security. |
| (e) | Issuer filed for bankruptcy and/or is in default of
interest payments. |
| (f) | Variable rate security. Rate shown is as of report date. |
| (g) | Represents a step-up bond that pays an initial coupon rate
for the first period and then a higher coupon rate for the following periods.
Rate shown reflects the current yield as of report date. |
| (h) | Represents a payment-in-kind security which may pay
interest/dividends in additional par/shares. |
| (i) | Represents the interest only portion of a mortgage-backed
security and has either a nominal or a notional amount of principal. |
| (j) | Represents or includes a to-be-announced transaction. The
Trust has committed to purchasing (selling) securities for which all specific
information is not available at this time. |

| Counterparty — Citigroup NA | Market
Value — $ (1,126,813 | ) | Unrealized Appreciation (Depreciation) — $ (344 | ) |
| --- | --- | --- | --- | --- |
| Credit Suisse International | $ 6,713,441 | | $ (22,058 | ) |
| Deutsche Bank AG | $ (12,176,634 | ) | $ 67,903 | |
| JPMorgan Chase Bank, NA | $ 1,447,250 | | $ 6,353 | |
| Morgan Stanley Capital Services, Inc. | $ 7,413,875 | | $ (50,586 | ) |

| (k) | All or a portion of the security has been pledged as
collateral for reverse repurchase agreements. |
| --- | --- |
| (l) | Amount is than $1,000. |
| (m) | Represents the principal only portion of a mortgage-backed
obligation. |
| (n) | Investments in companies considered to be an affiliate of
the Trust during the period, for purposes of Section 2(a)(3) of the
Investment Company Act of 1940, were as follows: |

Affiliate	Purchase Cost	Sale Cost	Realized Gain (Loss)		Income
BlackRock
Liquidity Funds, TempFund					$ 2,595
Federal
Housing Administration, Merrill Projects:
Series 29,
7.43%, 10/01/20		$ 777	$ (32	)	$ 1,760
Series 42,
7.43%, 9/25/22		$ 836	$ (37	)	$ 1,738
Merrill
Lynch Mortgage Investors, Inc. Series 2006-A3 Class 3A1,
5.823%,
5/25/36		$ 26,750	$ 12,000		$ 30,304
Merrill Lynch
Mortgage Trust Series 2004BPC1 Class A3,
4.467%,
10/12/41	$ 3,124,400				$ 50,966

| (o) | Represents a zero-coupon bond. Rate shown is the current
yield as of report date. |
| --- | --- |
| (p) | Security is perpetual in nature and has no stated maturity
date. |
| (q) | Other interests represent beneficial interest in
liquidation trusts and other reorganization entities and are non-income
producing. |
| (r) | One contract represents a notional amount of $1,000,000. |
| | Foreign currency exchange contracts as of February 28,
2009 were as follows: |

Currency Purchased	Currency Sold	Counterparty	Settlement Date
USD 879,334	GBP 601,000	UBS AG	3/18/09	$ 19,019

Financial future contracts purchased as of February 28, 2009 were as follows:

Contracts	Issue	Exchange	Expiration Date	Face Value	Unrealized Appreciation (Depreciation)
190	10-Year U.S.	Chicago	June 2009	$ 22,789,652	$ 16,286
	Treasury Bond
1,034	30-Year U.S.	Chicago	June 2009	$ 131,046,107	(3,508,669	)
	Treasury Bond
41	Long-Gilt	London	June 2009	$ 7,121,484	(124,390	)
Total					$ (3,616,773	)

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	47

Schedule of Investments (continued) BlackRock Income Opportunity Trust, Inc. (BNA)

Financial future contracts sold as of February 28, 2009 were as follows:

Contracts	Issue	Expiration Date	Face Value	Unrealized Appreciation (Depreciation)
724	2-Year U.S.	June 2009	$ 157,005,872	$ 180,684
	Treasury Bond
1,374	5-Year U.S.	June 2009	$ 159,671,218	(517,861	)
	Treasury Bond
Total				$ (337,177	)

Reverse repurchase agreements outstanding as of February 28, 2009 were as follows:

| Counterparty | Interest Rate | Trade Date | Maturity Date | Net
Closing Amount | Face Amount |
| --- | --- | --- | --- | --- | --- |
| Barclays Capital Inc. | 0.12% | 1/06/09 | Open | $ 2,091,726 | $ 2,091,350 |
| Barclays Capital Inc. | 0.30% | 1/23/09 | Open | 5,467,635 | 5,465,950 |
| Barclays Capital Inc. | 0.35% | 1/28/09 | Open | 1,248,791 | 1,248,390 |
| J.P. Morgan Securities Inc. | 0.38% | 2/02/09 | Open | 5,834,272 | 5,832,610 |
| Credit Suisse Securities LLC | 0.65% | 2/12/09 | 3/12/09 | 19,098,651 | 19,089,000 |
| J.P. Morgan Securities Inc. | 0.35% | 2/17/09 | Open | 1,342,420 | 1,342,250 |
| Barclays Capital Inc. | 0.33% | 2/27/09 | 3/02/09 | 486,888 | 486,875 |
| Total | | | | $ 35,570,383 | $ 35,556,425 |

Interest rate swaps outstanding as of February 28, 2009 were as follows:

		Notional — Amount	Unrealized — Appreciation
		(000)	(Depreciation)
Receive a fixed rate of 4.62377% and pay a floating rate based on 3-month LIBOR Broker, Credit Suisse International Expires September 2009	USD	50,000	$ 846,048
Receive a fixed rate of 2.895% and pay a floating rate based on 3-month LIBOR Broker, Barclays Bank Plc Expires September 2010	USD	33,600	692,298
Pay a fixed rate of 2.898% and receive a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires September 2010	USD	21,300	(439,833	)
Receive a fixed rate of 2.7425% and pay a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires October 2010	USD	53,200	$ 1,032,128
Receive a fixed rate of 2.745% and pay a floating rate based on 3-month LIBOR Broker, Credit Suisse International Expires October 2010	USD	42,500	826,258
Receive a fixed rate of 5% and pay a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires November 2010	USD	5,000	284,788
Receive a fixed rate of 2.14% and pay a floating rate based on 3-month LIBOR Broker, Citibank NA Expires December 2010	USD	40,000	377,866
Interest rate swaps (continued)
		Notional	Unrealized
		Amount	Appreciation
		(000)	(Depreciation)
Receive a fixed rate of 2.8225% and pay a floating rate based on 6-month LIBOR Broker, Citibank NA Expires December 2010	GBP	22,090	$ 270,446
Receive a fixed rate of 1.595% and pay a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires February 2011	USD	10,200	(12,133	)
Receive a fixed rate of 5.025% and pay a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires November 2011	USD	3,200	260,094
Receive a fixed rate of 4.9034% and pay a floating rate based on 3-month LIBOR Broker, Barclays Bank PLC Expires September 2012	USD	35,000	3,125,114
Receive a fixed rate of 3.66375% and pay a floating rate based on 3-month LIBOR Broker, Citibank NA Expires April 2013	USD	7,500	357,707
Receive a fixed rate of 4.2825% and pay a floating rate based on 3-month LIBOR Broker, Credit Suisse International Expires July 2013	USD	84,800	6,190,805
Receive a fixed rate of 3.6525% and pay a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires September 2013	USD	8,000	371,442
Receive a fixed rate of 3.78% and pay a floating rate based on 3-month LIBOR Broker, Morgan Stanley Capital Services, Inc. Expires November 2013	USD	18,400	957,495
Pay a fixed rate of 2.4625% and receive a floating rate based on 3-month LIBOR Broker, Citibank NA Expires February 2014	USD	17,300	173,817
Pay a fixed rate of 4.39919% and receive a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires October 2014	USD	27,500	(2,272,193	)
Receive a fixed rate of 2.215% and pay a floating rate based on the 3-month LIBOR Broker, Citibank NA Expires January 2016	USD	12,500	(642,881	)
Pay a fixed rate of 5.071% and receive a floating rate based on 3-month LIBOR Broker, UBS AG Expires March 2017	USD	5,000	(679,278	)
Pay a fixed rate of 5.85% and receive a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires June 2017	USD	1,000	(194,227	)
Pay a fixed rate of 5.307% and receive a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires October 2017	USD	6,000	(944,360	)
Receive a fixed rate of 4.564% and pay a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires October 2018	USD	10,000	1,036,921

| See Notes to Financial Statements. — 48 | SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

Schedule of Investments (concluded) BlackRock Income Opportunity Trust, Inc. (BNA)

Interest rate swaps (concluded)		Notional	Unrealized
		Amount	Appreciation
		(000)	(Depreciation)
Receive a fixed rate of 4.0975% and pay a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires October 2018	USD	11,800	$ 760,879
Pay a fixed rate of 5.01% and receive a floating rate based on 3-month LIBOR Broker, UBS AG Expires November 2018	USD	4,400	(498,771	)
Pay a fixed rate of 4.94% and receive a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires December 2018	USD	14,000	(1,535,204	)
Pay a fixed rate of 3.272% and receive a floating rate based on 3-month LIBOR Broker, JPMorgan Chase Bank NA Expires February 2019	USD	2,500	16,615
Receive a fixed rate of 5.411% and pay a floating rate based on 3-month LIBOR Broker, JPMorgan Chase Bank NA Expires August 2022	USD	9,405	1,951,457
Pay a fixed rate of 5.365% and receive a floating rate based on 3-month LIBOR Broker, Bank of America NA Expires September 2027	USD	8,900	(2,253,348	)
Pay a fixed rate of 5.0605% and receive a floating rate based on 3-month LIBOR Broker, Citibank NA Expires November 2037	USD	6,900	(1,993,270	)
Pay a fixed rate of 5.06276% and receive a floating rate based on 3-month LIBOR Broker, Citibank NA Expires December 2037	USD	1,400	(404,350	)
Pay a fixed rate of 4.8375% and receive a floating rate based on the 3-month LIBOR Broker, Morgan Stanley Capital Services, Inc. Expires January 2038	USD	6,100	(1,518,524	)
Receive a fixed rate of 5.29750% and pay a floating rate based on 3-month LIBOR Broker, Citibank NA Expires February 2038	USD	700	233,449
Receive a fixed rate of 5.1575% and pay a floating rate based on 3-month LIBOR Broker, Citibank NA Expires June 2038	USD	6,000	1,855,971
Pay a fixed rate of 4.57% and receive a floating rate based on 3-month LIBOR Broker, Deutsche Bank AG Expires September 2038	USD	5,700	(1,154,031	)
Total			$ 7,079,195


GBP British Pound
USD US Dollar


	Level 1 - price quotations in active markets/exchanges for
identical securities
	Level 2 - other observable inputs (including, but not
limited to: quoted prices for similar assets or liabilities in markets that
are not active, inputs other than quoted prices that are observable for the
assets or liabilities (such as interest rates, yield curves, volatilities,
prepayment speeds, loss severities, credit risks, and default rates) or other
market-corroborated inputs)
	Level 3 - unobservable inputs based on the best
information available in the circumstance, to the extent observable inputs
are not available (including the Trusts own assumption used in determining the
fair value of investments)
The inputs or methodology used for valuing securities are
not necessarily an indication of the risk associated with investing in those
securities. For information about the Trusts policy regarding valuation of
investments and other significant accounting policies, please refer to Note 1
of the Notes to Financial Statements.
The following table summarizes the inputs used as of
February 28, 2009 in determining the fair valuation of the Trusts
investments:

| Valuation Inputs | Investments
in Securities — Assets | Liabilities | | Other
Financial Instruments* — Assets | Liabilities | |
| --- | --- | --- | --- | --- | --- | --- |
| Level 1 | | | | $ 196,970 | $ (4,150,920 | ) |
| Level 2 | $ 333,557,528 | $ (19,171,725 | ) | 27,391,191 | (60,980,770 | ) |
| Level 3 | 19,579,804 | | | | | |
| Total | $ 353,137,332 | $ (19,171,725 | ) | $ 27,588,161 | $ (65,131,690 | ) |

*
The following is a reconciliation of investments for
unobservable inputs (Level 3) were used in determining fair value:

| | Investments
in | |
| --- | --- | --- |
| | Securities | |
| | Assets | |
| Balance as of August 31, 2008 | $ 6,521,344 | |
| Accrued discounts/premiums | 77 | |
| Realized gain | 7 | |
| Change in unrealized appreciation/depreciation 1 | (5,724,174 | ) |
| Net purchases | 34,568 | |
| Net transfers in Level 3 | 18,747,982 | |
| Balance as of February 28, 2009 | $ 19,579,804 | |

1 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	49

| Schedule of
Investments February
28, 2009 (Unaudited) |
| --- |
| (Percentages shown
are based on Net Assets) |

| Asset-Backed Securities — Chase
Issuance Trust Series 2007-A11 Class A11, 0.556%, 7/16/12 (a)(b) | Par (000) — $ 3,500 | $ | 3,387,635 |
| --- | --- | --- | --- |
| First
Franklin Mortgage Loan Asset Backed Certificates Series 2005-FF2 Class M2, 0.914%, 3/25/35 (b) | 5,890 | | 1,767,000 |
| GSAA Home
Equity Trust Series 2005-1 Class AF2, 4.316%, 11/25/34 (b) | 3,285 | | 2,960,203 |
| Securitized
Asset Backed Receivables LLC Trust Series 2005-OP2 Class M1, 0.904%, 10/25/35 (b) | 1,875 | | 624,087 |
| Small
Business Administration Participation Certificates: | | | |
| Series
1996-20E Class 1, 7.60%, 5/01/16 | 432 | | 464,240 |
| Series
1996-20F Class 1, 7.55%, 6/01/16 | 481 | | 517,192 |
| Series
1996-20G Class 1, 7.70%, 7/01/16 | 354 | | 381,213 |
| Series
1996-20H Class 1, 7.25%, 8/01/16 | 580 | | 622,596 |
| Series
1996-20K Class 1, 6.95%, 11/01/16 | 1,013 | | 1,080,024 |
| Series
1997-20C Class 1, 7.15%, 3/01/17 | 449 | | 480,053 |
| Sterling
Bank Trust Series 2004-2 Class Note, 2.081%, 3/30/30 (c) | 7,227 | | 440,370 |
| Sterling
Coofs Trust Series 1, 2.362%, 4/15/29 (c) | 11,394 | | 1,061,109 |
| Total Asset-Backed Securities3.2% | | | 13,785,722 |
| Corporate Bonds | | | |
| Diversified Financial
Services0.2% | | | |
| Structured
Asset Repackaged Trust, 1.633%, 1/21/10 | 1,159 | | 985,529 |
| Total Corporate Bonds0.2% | | | 985,529 |
| U.S. Government Agency Mortgage-Backed
Securities | | | |
| Fannie Mae
Guaranteed PassThrough Certificates: | | | |
| 4.50%,
3/15/39 (c) | 5,000 | | 5,009,375 |
| 5.00%,
6/01/333/15/39 (a)(d)(e) | 100,574 | | 102,397,894 |
| 5.50%,
3/15/243/15/39 (d)(e) | 142,585 | | 146,231,139 |
| 5.97%,
8/01/16 | 3,125 | | 3,401,899 |
| 6.00%,
3/15/39 (d) | 6,000 | | 6,196,872 |
| 6.50%,
10/01/383/15/39 (d)(e) | 79,881 | | 83,556,730 |
| 7.50%,
2/01/22 | | (f) | 185 |
| 8.00%,
10/01/095/01/22 | 8 | | 8,218 |
| 9.50%,
1/01/199/01/19 | 4 | | 3,923 |
| Freddie Mac
Mortgage Participation Certificates: | | | |
| 3.983%,
1/01/35 (b) | 217 | | 216,788 |
| 4.51%,
11/01/17 | 24 | | 23,987 |
| 4.991%,
10/01/34 | 641 | | 650,992 |
| 5.00%,
12/1/34 (e) | 4,955 | | 5,055,777 |
| 5.50%,
3/1/24 (d) | 7,000 | | 7,264,684 |
| 6.00%,
3/15/39 (d) | 6,700 | | 6,934,500 |
| 6.50%,
3/15/39 (d) | 100 | | 104,563 |
| 8.00%,
11/01/15 | 1 | | 1,282 |
| 9.00%,
9/01/20 (a)(e) | 97 | | 106,302 |
| Ginnie Mae
MBS Certificates | | | |
| 6.50%,
3/15/39 (d) | 10,800 | | 11,255,630 |
| 7.00%, 10/15/17 | 31 | | 32,653 |
| 7.50%,
8/15/2112/15/23 | 350 | | 378,105 |
| 8.00%,
10/15/222/15/29 | 154 | | 166,417 |
| 9.00%,
6/15/189/15/21 | 12 | | 13,109 |
| Total U.S. Government Agency
Mortgage-Backed Securities89.2% | | | 379,011,024 |
| U.S. Government Agency Mortgage-Backed Securities Collateralized Mortgage Obligations | Par (000) | Value | |
| Fannie Mae
Trust: | | | |
| Series 7
Class 2, 8.50%, 4/01/17 (c) | $ 8 | $ | 1,074 |
| Series 89
Class 2, 8%, 10/01/18 (c) | 16 | | 2,003 |
| Series 94
Class 2, 9.50%, 8/01/21 (c) | 5 | | 822 |
| Series 203
Class 1, 0%, 2/01/23 (g) | 33 | | 27,585 |
| Series 228
Class 1, 0%, 6/01/23 (g) | 24 | | 21,351 |
| Series 328
Class 1, 0%, 12/01/32 (g) | 3,708 | | 3,290,213 |
| Series 338
Class 1, 0%, 7/01/33 (g) | 3,102 | | 2,768,899 |
| Series
1990-123 Class M, 1.01%, 10/25/20 (c) | 34 | | 711 |
| Series
1990-136 Class S, 0.015%, 11/25/20 (c) | 21,271 | | 27,749 |
| Series
1991-7 Class J, 0%, 2/25/21 (g) | 35 | | 31,185 |
| Series
1991-38 Class F, 8.325%, 4/25/21 (b) | 31 | | 32,616 |
| Series
1991-38 Class N, 1.009%, 4/25/21 (c) | 24 | | 174 |
| Series
1991-38 Class SA, 10.186%, 4/25/21 (b) | 31 | | 32,242 |
| Series
1991-46 Class S, 1.403%, 5/25/21 (c) | 151 | | 6,544 |
| Series
1991-87 Class S, 25.358%, 8/25/21 (b) | 90 | | 110,154 |
| Series 1991-99
Class L, 0.93%, 8/25/21 (c) | 190 | | 3,607 |
| Series
1991-139 Class PT, 0.648%, 10/25/21 (c) | 348 | | 2,714 |
| Series
1991-167 Class D, 0%, 10/25/17(g) | 18 | | 18,122 |
| Series
1993-51 Class E, 0%, 2/25/23(g) | 109 | | 90,553 |
| Series
1993-70 Class A, 0%, 5/25/23(g) | 19 | | 17,101 |
| Series
1993-199 Class SB, 2.625%, 10/25/23 (c) | 1,728 | | 162,833 |
| Series
1993-247 Class SN, 10%, 12/25/23 (b) | 717 | | 744,001 |
| Series
1993-249 Class B, 0%, 11/25/23 (g) | 1,606 | | 1,316,747 |
| Series
1994-33 Class SG, 3.225%, 3/25/09 (c) | 8 | | 49 |
| Series
1996-68 Class SC, 2.257%, 1/25/24 (c) | 1,311 | | 102,547 |
| Series
1997-50 Class SI, 1.20%, 4/25/23 (c) | 541 | | 15,164 |
| Series
1997-90 Class M, 6%, 1/25/28 (c) | 10,833 | | 1,414,301 |
| Series
1999-W4 Class IO, 6.50%, 12/25/28 (c) | 521 | | 66,312 |
| Series
1999-W4 Class PO, 0%, 2/25/29(g) | 268 | | 230,627 |
| Series
2002-13 Class PR, 0%, 3/25/32 (g) | 726 | | 614,941 |
| Series
2003-9 Class BI, 5.50%, 10/25/22 (c) | 2,937 | | 192,420 |
| Series
2003-32 Class VT, 6%, 9/25/15 | 6,143 | | 6,353,488 |
| Series
2003-55 Class GI, 5%, 7/25/19 (c) | 3,469 | | 184,564 |
| Series
2003-66 Class CI, 5%, 7/25/33 (c) | 4,991 | | 597,619 |
| Series
2003-88 Class S, 4.876%, 5/25/30 (c) | 25,169 | | 1,114,503 |
| Series
2003-88 Class TI, 4.50%, 11/25/13 (c) | 623 | | 1,964 |
| Series 2003-122
Class IC, 5%, 9/25/18 (c) | 3,741 | | 133,865 |
| Series
2003-135 Class PB, 6%, 1/25/34 | 12,264 | | 12,734,842 |
| Series
2004-13 Class IG, 5%, 10/25/22 (c) | 818 | | 3,543 |
| Series
2004-28 Class PB, 6%, 8/25/28 | 2,288 | | 2,311,711 |
| Series
2004-29 Class HC, 7.50%, 7/25/30 | 1,773 | | 1,882,369 |
| Series
2004-31 Class ZG, 7.50%, 5/25/34 | 2,631 | | 2,854,265 |
| Series
2004-90 Class JH, 1.828%, 11/25/34 (c) | 23,909 | | 1,933,218 |
| Series
2005-43 Class IC, 6%, 3/25/34 (c) | 704 | | 114,788 |
| Series
2005-68 Class PC, 5.50%, 7/25/35 | 2,070 | | 2,154,766 |
| Series
2005-73 Class DS, 16.318%, 8/25/35 (b) | 4,854 | | 5,269,345 |
| Series
2005-73 Class ST, 1.258%, 8/25/35 (c) | 11,248 | | 980,616 |
| Series
2006-2 Class KP, 0%, 2/25/35 (b) | 1,221 | | 874,962 |
| Series
2006-36 Class SP, 1.828%, 5/25/36 (c) | 40,319 | | 3,405,404 |
| Series
2006-38 Class Z, 5%, 5/25/36 | 905 | | 901,571 |
| Series G-7
Class S, 116.20%, 3/25/21 (b) | | (f) | 5,426 |
| Series G-10
Class S, 0.575%, 5/25/21 (c) | 801 | | 16,502 |
| Series G-12
Class S, 0.608%, 5/25/21 (c) | 656 | | 10,075 |
| Series G-17
Class S, 0.58%, 6/25/21 (c) | 415 | | 7,719 |
| Series G-33
Class PV, 1.078%, 10/25/21 (c) | 519 | | 10,692 |
| Series G-49
Class S, 982.80%, 12/25/21 (b) | | (f) | 3,823 |
| Series G-50
Class G, 1.159%, 12/25/21 (c) | 293 | | 3,423 |
| Series G92-5
Class H, 9%, 1/25/22 (c) | 155 | | 24,398 |
| Series
G92-12 Class C, 1.017%, 2/25/22 (c) | 405 | | 8,459 |
| Series
G92-60 Class SB, 1.60%, 10/25/22 (c) | 444 | | 12,138 |
| Series
G93-2 Class KB, 0%, 1/25/23 (g) | 240 | | 197,287 |
| Freddie Mac
Multiclass Certificates: | | | |
| Series 19
Class F, 8.50%, 3/15/20 | 147 | | 156,292 |
| Series 19
Class R, 9.757%, 3/15/20 (h) | 14 | | 2,321 |
| Series 40
Class K, 6.50%, 8/17/24 | 594 | | 626,282 |

| See Notes to Financial Statements. — 50 | SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown
are based on Net Assets) |

U.S. Government Agency Mortgage-Backed Securities Collateralized Mortgage Obligations	Par (000)		Value
Freddie Mac Multiclass Certificates (concluded):
Series 75
Class R, 9.50%, 1/15/21	$	(f)	$ 4
Series 75
Class RS, 19.229%, 1/15/21		(f)	4
Series 173
Class R, 0%, 11/15/21 (c)	19		19
Series 173
Class RS, 9.133%, 11/15/21 (c)		(f)	20
Series 176
Class M, 1.01%, 7/15/21 (c)	42		860
Series 192
Class U, 1.009%, 2/15/22 (c)	5		96
Series 200
Class R, 98.523%, 12/15/22 (c)	2		21
Series 1043
Class H, 0.022%, 2/15/21 (c)	11,196		18,155
Series 1054
Class I, 0.435%, 3/15/21 (c)	115		1,858
Series 1056
Class KD, 1.085%, 3/15/21 (c)	99		2,033
Series 1057
Class J, 1.008%, 3/15/21 (c)	123		2,551
Series 1148
Class E, 0.593%, 10/15/21 (c)	306		6,007
Series 1160
Class F, 37.772%, 10/15/21 (b)	28		41,111
Series 1179
Class O, 1.009%, 11/15/21 (c)	37		183
Series 1418
Class M, 0%, 11/15/22 (g)	123		103,111
Series 1571
Class G, 0%, 8/15/23 (g)	577		512,071
Series 1691
Class B, 0%, 3/15/24 (g)	1,648		1,348,474
Series 1706
Class IA, 7%, 10/15/23 (c)	30		269
Series 1739
Class B, 0%, 2/15/24 (g)	130		119,271
Series 1914
Class PC, 0.75%, 12/15/11 (c)	1,404		9,613
Series 1961
Class H, 6.50%, 5/15/12	148		148,125
Series 2218
Class Z, 8.50%, 3/15/30	8,216		8,838,062
Series 2431
Class Z, 6.50%, 6/15/32	10,771		11,342,851
Series 2444
Class ST, 2.359%, 9/15/29 (c)	171		4,642
Series 2542
Class MX, 5.50%, 5/15/22 (c)	1,083		79,157
Series 2542
Class UC, 6%, 12/15/22	10,200		10,612,923
Series 2545
Class NI, 5.50%, 3/15/22 (c)	1,757		112,795
Series 2559
Class IO, 5%, 8/15/30 (c)	381		3,466
Series 2561
Class EW, 5%, 9/15/16 (c)	2,571		128,895
Series 2564
Class NC, 5%, 2/15/33	928		937,844
Series 2611
Class QI, 5.50%, 9/15/32 (c)	8,793		810,033
Series 2630
Class PI, 5%, 8/15/28 (c)	3,614		196,076
Series 2653
Class MI, 5%, 4/15/26 (c)	2,388		114,899
Series 2672
Class TQ, 5%, 3/15/23 (c)	590		2,012
Series 2687
Class IL, 5%, 9/15/18 (c)	3,525		118,426
Series 2694
Class LI, 4.50%, 7/15/19 (c)	1,681		81,636
Series 2758
Class KV, 5.50%, 5/15/23	10,811		11,267,446
Series 2765
Class UA, 4%, 3/15/11	1,539		1,563,190
Series 2773
Class OX, 5%, 2/15/18 (c)	3,282		239,340
Series 2825
Class NI, 5.50%, 3/15/30 (c)	6,727		644,471
Series 2840
Class SK, 18.127%, 8/15/34 (b)	1,760		1,689,687
Series 2861
Class AX, 9.966%, 9/15/34 (b)	509		478,624
Series 2927
Class BZ, 5.50%, 2/15/35	2,584		2,518,427
Series 2949
Class IO, 5.50%, 3/15/35 (c)	1,476		61,367
Series 3010
Class SC, 15.359%, 3/15/34 (b)	803		809,121
Series 3061
Class BD, 7.50%, 11/15/35	3,640		3,756,350
Series 3167
Class SX, 34.163%, 6/15/36 (b)	526		545,286
Series 3225
Class EY, 1.638%, 10/15/36 (c)	75,070		5,332,062
Series 3299
Class TI, 5%, 4/15/37 (c)	2,685		62,562
Series T-8
Class A10, 0%, 11/15/28 (g)	188		166,860
Series T-11
Class A9, 2.251%, 1/25/28 (b)	3,451		3,002,590
Ginnie Mae Trust :
Series
1996-5 Class Z, 7%, 5/16/26	835		892,849
Series 2001-33
Class PB, 6.50%, 7/20/31	1,369		1,431,275
Series
2003-58 Class IT, 5.50%, 7/20/33 (c)	1,440		113,473
Series
2004-39 Class ID, 5%, 5/20/33 (c)	1,500		279,412
Series
2004-89 Class PE, 6%, 10/20/34	3,638		3,821,023
Total U.S. Government Agency
Mortgage-Backed SecuritiesCollateralized Mortgage Obligations30.7%			130,610,589
Non-U.S. Government Agency Mortgage-Backed Securities	Par (000)		Value
Collateralized
Mortgage Obligations16.3%
Banc of America Funding Corp. (c):
Series
2007-2 Class 1A19, 0%, 3/25/37	$ 98,352		$ 2,304,652
Series
2007-5 Class 4A3, 3.655%, 7/25/37	33,975		2,394,839
Bank of
America Mortgage Securities Inc. Series 2003-3 Class 1AIO, 0.286%, 5/25/18 (c)	201,263		1,509,051
Citi
Mortgage Alternative Loan Trust Series 2007-A5 Class 1A7, 6%, 5/25/37 (c)	1,770		219,117
Citigroup
Mortgage Loan Trust, Inc. Series 2005-12 Class 1A2, 1.615%, 8/25/35 (c)	22,811		1,035,840
Collateralized Mortgage Obligation Trust:
Series 40
Class R, 0.58%, 4/01/18	250		250
Series 42
Class R, 6%, 10/01/14 (c)	33		2,161
Countrywide Alternative Loan Trust:
Series
2005-28CB Class 1A5, 5.50%, 8/25/35	3,043		2,408,730
Series
2005-79C Class A2, 0%, 1/25/36 (c)	127,145		4,426,310
Countrywide Home Loan Mortgage Pass-Through Trust (g):
Series
2003-26 Class PO, 0%, 8/25/33	4,450		3,017,442
Series
2003-J4 Class PO, 0%, 6/25/33	917		455,410
Series
2003-J5 Class PO, 0%, 7/25/33	1,231		553,853
Series
2003-J8 Class PO, 0%, 9/25/23	982		409,058
Deutsche
Alt-A Securities Inc. Mortgage Series 2006-AR5 Class 22A, 5.50%, 10/25/21	1,770		1,303,826
Drexel
Burnham Lambert CMO Trust (g):
Series K
Class 1, 0%, 9/23/17	16		16,264
Series V
Class 1, 0%, 9/01/18	171		169,180
First
Boston Mortgage Securities Corp. Series C Class I-O, 10.965%, 4/25/17 (c)	59		11,466
First
Horizon Alternative Mortgage Securities Series 2005-FA9 Class A2, 0%, 12/25/35 (c)	162,815		4,684,200
GSMPS
Mortgage Loan Trust Series 1998-5 Class IO, 0.97%, 6/19/27 (c)	6,414		76,328
Homebanc
Mortgage Trust Series 2005-4 Class A1, 0.744%, 10/25/35 (b)	4,386		2,019,025
IndyMac
INDX Mortgage Loan Trust Series 2006-AR33 Class 4AX, 0.165%, 1/25/37 (c)	141,568		661,124
JPMorgan
Mortgage Trust:
Series
2005-S1 Class 2A1, 8%, 1/25/35	5,495		4,992,083
Series
2006-A7 Class 2A2, 5.798%, 1/25/37 (b)	1,218		1,211,319
Kidder
Peabody Acceptance Corp. Series 1993-1 Class A6, 15.741%, 8/25/23 (b)	103		92,028
Kidder
Peabody Mortgage Assets Trust Series B Class A2, 9.50%, 4/22/18 (c)	45		8,377
Luminent
Mortgage Trust Series 2006-A1 Class 2A1, 0.644%, 12/25/36 (b)	4,726		2,097,218
MASTR Adjustable
Rate Mortgages Trust Series 2004-3 Class 3AX, 0.977%, 4/25/34 (c)	18,936		410,033
MASTR
Alternative Loans Trust:
Series
2003-7 Class 4A3, 8%, 11/25/18	1,241		1,235,575
Series
2003-9 Class 15X2, 6%, 1/25/19 (c)	1,160		186,001
MASTR Asset
Securitization Trust Series 2004-3 Class 4A15, 0%, 3/25/34 (g)	314		168,862
Morgan
Stanley Mortgage Loan Trust Series 2004-3 Class 1AX, 5%, 5/25/19 (c)	1,187		59,359
Residential
Accredit Loans, Inc. Series 2003-QS14 Class A1, 5%, 7/25/18	5,452		5,059,836
Residential
Asset Securitization Trust Series 2005-A15 Class 1A8, 0%, 2/25/36 (g)	983		331,098
Residential
Funding Securities LLC Series 2003-RM2 Class AI5, 8.50%, 5/25/33	8,566		7,966,697
Sequoia
Mortgage Trust Series 2005-2 Class XA, 0.998%, 3/20/35 (c)	45,941		754,809
Structured
Adjustable Rate Mortgage Loan Trust: Series 2004-11 Class A, 5.106%, 8/25/34 (b)	1,849		1,824,868

| See Notes to Financial Statements. — SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 | 51 |
| --- | --- | --- |

| Schedule of
Investments (continued) |
| --- |
| (Percentages shown
are based on Net Assets) |

Non-U.S. Government Agency Mortgage-Backed Securities	Par (000)
Collateralized Mortgage Obligations
(concluded)
Structured
Adjustable Rate Mortgage Loan Trust (concluded):
Series
2005-18 Class 7AX, 5.50%, 9/25/35 (c)	$ 4,292	$	540,251
Series
2005-20 Class 3AX, 5.50%, 10/25/35 (c)	3,513		524,084
Series
2006-2 Class 4AX, 5.50%, 3/25/36 (c)	11,692		1,719,782
Series
2006-7 Class 3AS, 2.374%, 8/25/36 (c)	38,620		4,445,878
Structured
Mortgage Asset Residential Trust Series 1993-3C Class CX, 0%, 4/25/24 (g)	11		11,078
Summit
Mortgage Trust Series 2000-1 Class B1, 7.008%, 12/28/12 (b)	1		847
Vendee
Mortgage Trust Series 1999-2 Class 1IO, 0.052%, 5/15/29 (c)	74,531		182,780
WaMu
Mortgage Pass-Through Certificates (b):
Series
2005-AR4 Class A3, 4.585%, 4/25/35	2,710		2,635,393
Series
2006-AR1 Class 2A1C, 2.893%, 1/25/46	6,704		1,609,058
Washington
Mutual Alternative Mortgage Pass-Through Certificates:
Series
2005-8 Class 1A4, 1.215%, 10/25/35 (c)	8,652		154,976
Series
2005-9 Class CP, 0%, 11/25/35 (g)	898		432,495
Series
2007-1 Class 1A3, 0.844%, 2/25/37 (b)	7,118		3,000,525
			69,333,436
Commercial Mortgage-Backed
Securities1.6%
CS First
Boston Mortgage Securities Corp. Series 1997-C1 Class AX, 1.672%, 6/20/29 (c)	5,107		199,902
Commercial
Mortgage Acceptance Corp. Series 1997-ML1 Class IO, 0.705%, 12/15/30 (c)	12,100		362,703
Credit
Suisse Mortgage Capital Certificates Series 2007-C2 Class A3, 5.542%, 1/15/49 (b)	2,420		1,371,480
First
Union-Lehman Brothers Commercial Mortgage Series 1997-C2 Class D, 7.12%, 11/18/29	3,500		3,399,763
Morgan
Stanley Capital I Series 1997-HF1 Class X, 3.438%, 7/15/29 (c)	60		14
Wachovia
Bank Commercial Mortgage Trust Series 2007-C32 Class A2, 5.736%, 6/15/49 (b)	2,200		1,580,123
			6,913,985
Total Non-U.S.Government Agency Mortgage-Backed Securities17.9%			76,247,421
U.S. Government Obligations
Federal
Housing Administration:
General Motors Acceptance Corp.
Projects, Series 56, 7.43%, 11/01/22	332		328,435
Merrill
Projects, Series 54, 7.43%, 2/01/23 (h)	2		2,246
Reilly
Project, Series 41, 8.28%, 3/01/20	701		693,547
USGI
Projects, Series 87, 7.43%, 12/01/22	75		74,415
USGI
Projects, Series 99, 7.43%, 10/01/23	79		77,993
USGI
Projects, Series 99, 7.43%, 10/01/23	233		230,434
USGI
Projects, Series 99, 7.43%, 6/01/21	5,131		5,079,642
Overseas
Private Investment Corp.:
4.09%,
5/29/12	338		370,713
4.30%,
5/29/12 (b)	848		963,026
4.64%,
5/29/12	715		824,575
4.68%,
5/29/12	405		449,482
4.87%,
5/29/12	3,072		3,577,460
Resolution
Funding Corp., 9.653%, 4/15/30 (i)	13,000		4,868,240
Small
Business Administration Series 1, 1%, 4/01/15 (c)	3,735		37,355
U.S.
Treasury Strips, 0%, 11/15/24 (e)(j)	40,000		21,749,560
Total U.S. Government
Obligations9.3%			39,327,123
Total Long-Term Investments (Cost$637,094,289)150.5%			639,967,408
Short-Term Securities	Par (000)	Value
Borrowed Bond
Agreement5.0%
JPMorgan
Chase & Co., Inc., 0.90%, purchased on 9/15/08	$ 21,187	$	21,187,306
	Shares
Money Market
Fund18.3%
BlackRock
Liquidity Funds, TempFund, 0.86% (h)(k)	77,647,966		77,647,966
Total Short-Term Securities (Cost$98,835,272)23.3%			98,835,272
Options Purchased	Contracts
(l)
Over-the-Counter Call Swaptions
Purchased
Receive a
fixed rate of 5.47% and pay a floating rate based on 3-month LIBOR, expiring May 2012, Broker Bank of America NA	12		1,730,817
Over-the-Counter Put Swaptions
Purchased
Pay a fixed
rate of 5.47% and receive a floating rate based 3-month LIBOR, expiring May 2012, Broker Bank of America NA	12		378,981
Pay a fixed
rate of 5.78% and receive a floating rate based 3-month LIBOR, expiring August 2010, Broker Deutsche Bank AG	2		35,070
			414,051
Total Options Purchased (Cost$1,091,660)0.5%			2,144,868
Total Investments before Borrowed Bond, TBA Sale Commitments and Options Written (Cost$737,021,221*)174.3%			740,947,548
Borrowed Bond	Par (000 )
US Treasury
Note 4.75% 5/31/12	$ (19,505	)	(21,502,741	)
Total Borrowed Bond (Proceeds$19,383,094)(5.1)%			(21,502,741	)
TBA Sale Commitments (d)
Fannie Mae
Guaranteed Pass-Through Certificates, 6%, 3/15/39	(6,000	)	(6,196,872	)
Freddie Mac
Mortgage Participation Certificates, 5%, 12/01/34	(4,900	)	(4,975,029	)
Total TBA Sale Commitments (Proceeds$11,127,031)(2.6)%			(11,171,901	)
Options Written	Contracts
(l)
Over-the-Counter Call Swaptions
Written
Pay a fixed
rate of 5.325% and receive a floating rate based on 3-month LIBOR, expiring July 2013, Broker JP Morgan Chase Bank NA	11		(785,669	)
Pay a fixed
rated of 5.485% and receive a floating rate based on expiring 3-month LIBOR, Broker JP Morgan Chase Bank NA	5		(910,402	)
Pay a fixed
rated of 5.67% and receive a floating rate based on 3-month LIBOR, expiring January 2010, Broker Citibank NA	12		(2,221,547	)
Pay a fixed
rated of 2.38% and receive a floating rate based on 3-month LIBOR, expiring December 2009, Broker Barclays Bank	4		(49,813	)
			(3,967,431	)
Over-the-Counter Put Swaptions
Written

| See Notes to Financial Statements. — 52 | SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

| Options Written | Contracts
(l) | Value | |
| --- | --- | --- | --- |
| Receive a
fixed rate of 2.38% and pay a floating rate based on 3-month LIBOR, expiring December 2009, Broker Barclays Bank | 4 | $ (549,760 | ) |
| Receive a
fixed rate of 5.325% and pay a floating rate based on 3-month LIBOR, expiring July 2013, Broker JP Morgan Chase Bank NA | 11 | (244,467 | ) |
| Receive a
fixed rate of 5.485% and pay a floating rate based on 3-month LIBOR, expiring October 2009, Broker JP Morgan Chase Bank NA | 5 | (31,423 | ) |
| Receive a
fixed rate of 5.67% and pay a floating rate based on 3-month LIBOR, expiring January 2010, Broker Citibank NA | 12 | (82,584 | ) |
| | | (908,234 | ) |
| Total Options Written (Premiums Received$2,829,409)(1.1)% | | (4,875,665 | ) |
| Total Investments Net of Borrowed Bond,
TBA Sale Commitments and Options Written165.5% | | 703,397,241 | |
| Liabilities in Excess of Other
Assets(65.5)% | | (278,430,296 | ) |
| Net Assets100.0% | | $ 424,966,945 | |

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$
Gross unrealized appreciation	44,575,659
Gross unrealized depreciation	(40,748,504	)
Net unrealized appreciation	$ 3,827,155

| (a) | All or a portion of security held as collateral in
connection with financial futures contracts. |
| --- | --- |
| (b) | Variable rate security. Rate shown is as of report date. |
| (c) | Represents a interest only portion of a mortgage-backed
security and has either a nominal or notional amount of principal. |
| (d) | Represents or includes a to-be-announced transaction. The
Trust has committed to purchasing (selling) securities for which all specific
information is not available at this time. |

Counterparty — Barclays Capital Plc	Market Value — $ 60,466,091		Unrealized Appreciation (Depreciation) — $ 425,120
Citigroup NA	$ 11,358,911		$ 73,127
Credit Suisse International	$ 41,382,872		$ 194,438
Deutsche Bank AG	$ 75,188,787		$ 289,419
Greenwich Capital	$ 72,320,875		$ 360,658
JP Morgan Chase Bank	$ 23,038,153		$ 90,979
Morgan Stanley Capital Services, Inc.	$ 4,068,752		$ 15,512
UBS AG	$ (6,196,872	)	$ (23,435	)

| (e) | All or a portion of security held as collateral in
connection with swaps. |
| --- | --- |
| (f) | Amount is less than $1,000. |
| (g) | Represents a principal only portion of a mortgage-backed
security. |
| (h) | Investments in companies considered to be an affiliate of
the Trust during the period, for purposes of Section 2(a)(3) of the Investment
Company Act of 1940, were as follows: |

Affiliate — Federal Housing Administration, Merrill Projects, Series 54, 7.43%, 2/01/23		$	43	Realized Loss — $ (2	Interest Income — $ 89
BlackRock Liquidity Funds, TempFund	77,647,966	*			$ 47,966
* Represents net purchase cost.

| (i) | Represents a zero-coupon bond. Rate shown is current yield
as of report date. |
| --- | --- |
| (j) | Separately Traded Registered Interest and Principal
Securities. |
| (k) | Represents the current yield as of report date. |
| (l) | One contract represents a notional amount of $1,000,000. |
| | For Trust compliance purposes, the Trusts industry
classifications refer to any one or more of the industry sub-classifications
used by one or more widely recognized market indexes or rating group indexes,
and/or as defined by Trust management. This definition may not apply for purposes
of this report, which may combine industry sub-classifications for reporting
ease. |
| | Interest rate floors outstanding as of February 28, 2009
were as follows: |

	Notional Amount (000)	Value		Unrealized Depreciation
Pay a fixed
rated of 5.50% and receive a floating rate based on 3-month LIBOR
Broker, UBS AG Expiring March 2010	$ 52,000	$ (2,358,824	)	$ (1,578,824	)
Pay a fixed
rated of 5.50% and receive a floating rate based on 3-month LIBOR
Broker, Citibank NA Expiring September 2011	30,000	(2,540,310	)	(1,965,310	)
Pay a fixed
rated of 4.8% and receive a floating rate based on 3-month LIBOR
Expiring March 2011 Broker, Goldman Sachs & Co.	100,000	(5,376,600	)	(4,269,933	)
Pay a fixed
rated of 4.95% and receive a floating rate based on 3-month LIBOR
Expiring March 2011 Broker, JPMorgan Chase Bank	52,000	(2,253,368	)	(1,696,968	)
Total		$ (12,529,102	)	$ (9,511,035	)

Financial futures contracts sold as of February 28, 2009 were as follows:

Contracts	Issue	Expiration Date	Face Value	Unrealized Appreciation (Depreciation)
262	10-Year U.S. Treasury Bond	June 2009	$ 31,424,585	$ (23,603	)
52	5-Year U.S. Treasury Bond	June 2009	$ 6,045,174	$ (17,295	)
384	2-Year U.S. Treasury Bond	June 2009	$ 83,200,294	$ 22,294
217	EuroDollar Futures	September 2009	$ 52,658,964	$ (845,099	)
198	EuroDollar Futures	March 2009	$ 48,175,272	$ (687,416	)
197	EuroDollar Futures	June 2009	$ 47,870,399	$ (736,889	)
110	EuroDollar Futures	December 2009	$ 26,627,915	$ (447,210	)
133	EuroDollar Futures	September 2010	$ 31,974,457	$ (575,631	)
121	EuroDollar Futures	June 2010	$ 29,156,094	$ (523,694	)
111	EuroDollar Futures	March 2010	$ 26,815,873	$ (470,702	)
84	EuroDollar Futures	September 2011	$ 20,089,394	$ (276,406	)
68	EuroDollar Futures	December 2010	$ 16,295,143	$ (304,507	)
62	EuroDollar Futures	June 2011	$ 14,831,761	$ (235,014	)
47	EuroDollar Futures	March 2011	$ 11,252,831	$ (196,369	)
Total				$ (5,317,541	)

Financial futures contracts purchased as of February 28, 2009 were as follows:

Contracts	Issue	Expiration Date	Face Value	Unrealized Depreciation
36	EuroDollar Futures	December 2011	$ 8,747,285	$ (39,335	)

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	53

Schedule of Investments (continued) BlackRock Income Trust, Inc. (BKT)

Interest rate swaps outstanding as of February 28, 2009 were as follows:

	Notional Amount (000)	Unrealized Appreciation (Depreciation)
Receive a fixed rate of 5.38341% and pay a floating rate based on 3-month LIBOR
Broker, Credit Suisse International Expires July 2009	$ 200,000	$ 3,133,960
Receive a fixed rate of 4.05% and pay a floating rate based on 3-month LIBOR
Broker, Barclays Bank, PLC Expires December 2009	$ 5,600	115,829
Receive a fixed rate of 4.31996% and pay a floating rate based on 3-month LIBOR
Broker, UBS AG Expires September 2010	$ 12,000	500,175
Receive a fixed rate of 2.895% and pay a floating rate based on 3-month LIBOR
Broker, Barclays Bank, PLC Expires September 2010	$ 7,400	151,702
Pay a fixed rate of 2.898% and receive a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires September 2010	$ 22,300	(458,164	)
Receive a fixed rate of 4.95% and pay a floating rate based on 3-month LIBOR
Broker, UBS AG Expires November 2011	$ 4,400	351,238
Receive a fixed rate of 5.025% and pay a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires November 2011	$ 3,000	243,840
Receive a fixed rate of 5.39256% and pay a floating rate based on 3-month LIBOR
Broker, Credit Suisse International Expires June 2012	$ 64,000	6,501,565
Pay a fixed rate of 4.115% and receive a floating rate based on 3-month LIBOR
Broker, Goldman Sachs Bank USA Expires August 2013	$ 19,700	(1,316,022	)
Pay a fixed rate of 4.88911% and receive a floating rate based on 3-month LIBOR
Broker, Goldman Sachs Bank USA Expires August 2014	$ 19,000	(1,996,299	)
Pay a fixed rate of 4.39919% and receive a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires October 2014	$ 12,500	(1,034,662	)
Receive a fixed rate of 4.8834% and pay a floating rate based on 3-month LIBOR
Broker, UBS AG Expires March 2015	$ 25,000	2,767,455
Pay a fixed rate of 4.925% and receive a floating rate based on 3-month LIBOR Municipal Swap Index
Broker, Deutsche Bank AG Expires March 2015	$ 16,000	(1,808,504	)
Pay a fixed rate of 4.5% and receive a floating rate based on 3-month LIBOR
Broker, JPMorgan Chase Bank NA Expires May 2015	$ 3,000	(270,319	)
Interest rate swaps (continued)
	Notional Amount (000)	Unrealized Appreciation (Depreciation)
Receive a fixed rate of 4.442% and pay a floating rate based on 3-month LIBOR
Broker, Morgan Stanley Capital Services Inc. Expires July 2015	$ 4,500	$ 391,738
Receive a fixed rate of 5.94% and pay a floating rate based on 3-month LIBOR
Broker, UBS AG Expires December 2015	$ 2,800	505,310
Receive a fixed rate of 4.87% and pay a floating rate based on 3-month LIBOR Municipal Swap Index
Broker, Goldman Sachs Bank USA Expires January 2016	$ 5,500	635,490
Receive a fixed rate of 2.81% and pay a floating rate based on 3-month LIBOR
Broker, Citibank N.A. Expires February 2016	$ 20,000	(292,642	)
Receive a fixed rate of 5.723% and pay a floating rate based on 3-month LIBOR
Broker, JPMorgan Chase Bank NA Expires July 2016	$ 5,400	944,683
Receive a fixed rate of 5.295% and pay a floating rate based on 3-month LIBOR
Broker, UBS AG Expires February 2017	$ 11,900	1,796,918
Receive a fixed rate of 5.25% and pay a floating rate based on 3-month LIBOR
Broker, Goldman Sachs Bank USA Expires April 2017	$ 800	119,063
Pay a fixed rate of 5.74% and receive a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires June 2017	$ 1,400	(260,835	)
Pay a fixed rate of 5.5451% and receive a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires June 2017	$ 1,800	(309,232	)
Pay a fixed rate of 5.85% and receive a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires June 2017	$ 1,000	(194,385	)
Receive a fixed rate of 5.505% and pay a floating rate based on 3-month LIBOR
Broker, Bank of America NA Expires August 2017	$ 165,647	28,332,193
Pay a fixed rate of 4.4575% and receive a floating rate based on 3-month LIBOR
Broker, Goldman Sachs Bank USA Expires January 2018	$ 2,600	(242,176	)
Pay a fixed rate of 5.135% and receive a floating rate based on 3-month LIBOR
Broker, Barclays Bank, PLC Expires April 2018	$ 5,700	(595,623	)
Pay a fixed rate of 5.88% and receive a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires June 2018	$ 63,930	(12,049,344	)

See Notes to Financial Statements. — 54	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (concluded)
(Percentages shown are based on Net Assets)

Interest rate swaps (concluded)	Notional Amount (000)	Unrealized Appreciation (Depreciation)
Pay a fixed rate of 5.46% and receive a floating rate based on 3-month LIBOR
Broker, JPMorgan Chase Bank NA Expires August 2018	$ 3,800	$ (576,647	)
Pay a fixed rate of 4.545% and receive a floating rate based on 3-month LIBOR
Broker, Citibank NA Expires September 2018	$ 98,400	(9,991,313	)
Pay a fixed rate of 4.205% and receive a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires September 2018	$ 7,400	(541,224	)
Receive a fixed rate of 4.35% and pay a floating rate based on 3-month LIBOR
Broker, UBS AG Expires October 2018	$ 42,000	3,583,699
Receive a fixed rate of 4.66% and pay a floating rate based on 3-month LIBOR
Broker, JPMorgan Chase Bank NA Expires October 2018	$ 5,000	557,921
Pay a fixed rate of 4.31% and receive a floating rate based on 3-month LIBOR
Broker, Deutsche Bank AG Expires October 2018	$ 66,000	(5,411,390	)
Receive a fixed rate of 2.705% and pay a floating rate based on 3-month LIBOR
Broker, Bank of America, NA Expires January 2019	$ 5,600	(306,401	)
Receive a fixed rate of 5.411% and pay a floating rate based on 3-month LIBOR
Broker, JPMorgan Chase Bank, National Association Expires August 2022	$ 9,565	$ 1,990,501
		$ 14,968,098


	Level 1 price quotations in active markets/exchanges for
identical securities
	Level 2 other observable inputs (including, but not
limited to: quoted prices for similar assets or liabilities in markets that
are not active, inputs other than quoted prices that are observable for the
assets or liabilities (such as interest rates, yield curves, volatilities,
prepayment speeds, loss severities, credit risks, and default rates) or other
market-corroborated inputs)
	Level 3 unobservable inputs based on the best
information available in the circumstance, to the extent observable inputs are
not available (including the Trusts own assumption used in determining the
fair value of investments)

The following table summarizes the inputs used as of February 28, 2009 in determining the fair valuation of the Trusts investments:

| Valuation Inputs | Investments
in Securities — Assets | Liabilities | | Other
Financial Instruments* — Assets | Liabilities | |
| --- | --- | --- | --- | --- | --- | --- |
| Level 1 | $ 77,647,966 | | | $ 22,294 | $ (5,379,170 | ) |
| Level 2 | 609,406,067 | $ (32,674,642 | ) | 54,768,148 | (42,530,847 | ) |
| Level 3 | 51,748,647 | | | | (12,529,102 | ) |
| Total | $ 738,802,680 | $ (32,674,642 | ) | $ 54,790,442 | $ (60,439,119 | ) |

Other financial instruments are swaps, futures, interest rate floors and options. Futures and swaps are valued at the unrealized appreciation/depreciation on the instrument and interest rate floors and options are shown at market value.

The following is a reconciliation of investments for unobservable inputs (Level 3) were used in determining fair value:

| | Investments
in Securities — Assets | Liabilities | | |
| --- | --- | --- | --- | --- |
| Balance as of August 31, 2008 | $ 5,942,021 | $ | (9,216,687 | ) |
| Accrued discounts/premiums | 199 | | | |
| Realized gain | 44 | | 484,699 | |
| Change in unrealized appreciation/depreciation 1 | 2,005,074 | | (3,797,114 | ) |
| Net sales | (274,532 | ) | | |
| Net transfers in Level 3 | 44,075,841 | | | |
| Balance as of February 28, 2009 | $ 51,748,647 | $ | (12,529,102 | ) |

1 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	55

| Schedule of Investments February 28, 2009
(Unaudited) |
| --- |
| (Percentages shown
are based on Net Assets) |

Corporate Bonds	Par (000)	Value
Aerospace &
Defense3.1%
Northrop
Grumman Corp., 7.125%, 2/15/11	$ 1,000	$ 1,069,032
United
Technologies Corp., 6.35%, 3/01/11	1,000	1,066,654
		2,135,686
Air Freight &
Logistics0.2%
Park-Ohio
Industries, Inc., 8.375%, 11/15/14	300	123,000
Airlines0.2%
American
Airlines, Inc. Series 99-1, 7.324%, 4/15/11	125	117,500
Auto Components0.8%
Allison
Transmission, Inc. (a):
11%,
11/01/15	140	67,900
11.25%,
11/01/15 (b)	120	46,200
The
Goodyear Tire & Rubber Co.:
7.857%,
8/15/11	405	324,000
8.625%,
12/01/11	160	128,000
Lear Corp.,
8.75%, 12/01/16	95	16,150
		582,250
Automobiles1.5%
DaimlerChrysler
NA Holding Corp., 7.30%, 1/15/12	1,000	957,514
Ford
Capital BV, 9.50%, 6/01/10	350	112,000
		1,069,514
Building
Products0.6%
CPG
International I, Inc., 10.50%, 7/01/13	150	79,500
Momentive
Performance Materials, Inc., 11.50%, 12/01/16	345	72,450
Ply Gem
Industries, Inc., 11.75%, 6/15/13	545	250,700
		402,650
Capital Markets0.3%
Marsico
Parent Co., LLC, 10.625%, 1/15/16	341	139,810
Marsico
Parent Holdco, LLC, 12.50%, 7/15/16 (a)(b)	134	54,818
Marsico
Parent Superholdco, LLC, 14.50%, 1/15/18 (a)(b)	91	37,319
		231,947
Chemicals1.7%
American
Pacific Corp., 9%, 2/01/15	180	151,200
Ames True
Temper, Inc., 5.094%, 1/15/12 (c)	350	227,500
Innophos,
Inc., 8.875%, 8/15/14	980	779,100
Terra
Capital, Inc. Series B, 7%, 2/01/17	50	45,500
		1,203,300
Commercial Services &
Supplies3.7%
Casella
Waste Systems, Inc., 9.75%, 2/01/13	1,500	1,312,500
DI Finance
Series B, 9.50%, 2/15/13	524	476,840
Waste
Services, Inc., 9.50%, 4/15/14	550	434,500
West Corp.,
11%, 10/15/16	590	377,600
		2,601,440
Construction
Materials0.3%
Nortek,
Inc., 10%, 12/01/13	520	208,000
Containers &
Packaging1.1%
Berry
Plastics Holding Corp.:
5.871%,
9/15/14 (c)	80	37,200
8.875%,
9/15/14	75	44,625
Crown
Americas LLC, 7.75%, 11/15/15	250	251,875
Impress
Holdings BV, 4.219%, 9/15/13 (a)(c)	260	192,400
Pregis
Corp., 12.375%, 10/15/13	565	251,425
Smurfit-Stone
Container Enterprises, Inc., 8%, 3/15/17 (d)(e)	115	10,063
		787,588
Diversified Financial
Services2.2%
Ford Motor
Credit Co. LLC:
2.664%,
1/15/10 (c)	1,600	1,064,000
7.80%,
6/01/12	250	135,506
GMAC LLC,
3.461%, 12/01/14 (a)(c)	250	110,000
Structured
Asset Repackaged Trust, 1.633%, 1/21/10	270	229,583
		1,539,089

Corporate Bonds	Par (000)	Value
Diversified Telecommunication
Services10.6%
AT&T,
Inc., 6.45%, 6/15/34	$ 1,500	$ 1,376,987
Broadview
Networks Holdings, Inc., 11.375%, 9/01/12	155	80,600
Cincinnati
Bell, Inc., 7.25%, 7/15/13	590	563,450
Citizens
Communications Co., 6.25%, 1/15/13	200	182,000
Qwest
Communications International, Inc.:
7.50%,
2/15/14	1,120	949,200
Series B,
7.50%, 2/15/14	305	258,488
Qwest
Corp., 5.246%, 6/15/13 (c)	340	288,150
Telecom
Italia Capital SA, 4.95%, 9/30/14	1,000	861,461
Verizon New
England, Inc., 6.50%, 9/15/11	2,000	2,056,668
Wind
Acquisition Finance SA, 10.75%, 12/01/15 (a)	250	250,625
Windstream
Corp.:
8.125%,
8/01/13	360	349,200
8.625%,
8/01/16	170	163,200
		7,380,029
Electric
Utilities2.0%
Edison
Mission Energy, 7.50%, 6/15/13	125	114,687
Elwood
Energy LLC, 8.159%, 7/05/26	27	22,104
Midwest
Generation LLC Series B, 8.56%, 1/02/16	238	234,945
Progress
Energy, Inc., 7.75%, 3/01/31	1,000	1,022,912
		1,394,648
Electronic Equipment &
Instruments0.1%
Sanmina-SCI
Corp., 8.125%, 3/01/16	215	75,250
Energy Equipment &
Services0.2%
Compagnie
Generale de Geophysique-Veritas:
7.50%,
5/15/15	65	50,862
7.75%,
5/15/17	70	54,250
North
American Energy Partners, Inc., 8.75%, 12/01/11	65	51,188
		156,300
Food & Staples
Retailing0.7%
The Pantry,
Inc., 7.75%, 2/15/14	500	377,500
Rite Aid
Corp., 7.50%, 3/01/17	260	140,400
		517,900
Food Products0.4%
Kraft
Foods, Inc., 6.125%, 8/23/18	250	248,313
Gas Utilities0.3%
Targa
Resources, Inc., 8.50%, 11/01/13	365	229,950
Health Care Equipment &
Supplies1.2%
DJO Finance
LLC, 10.875%, 11/15/14	1,090	828,400
Health Care Providers &
Services3.1%
Community
Health Systems, Inc.
Series WI,
8.875%, 7/15/15	115	108,819
Tenet
Healthcare Corp.:
6.375%,
12/01/11	120	106,800
6.50%,
6/01/12	1,250	1,112,500
WellPoint,
Inc., 5.95%, 12/15/34	1,000	811,624
		2,139,743
Hotels, Restaurants &
Leisure1.9%
American
Real Estate Partners LP:
8.125%,
6/01/12	860	756,800
7.125%, 2/15/13	230	189,175
Gaylord
Entertainment Co., 8%, 11/15/13	215	142,438
Greektown
Holdings, LLC, 10.75%, 12/01/13 (a)(d)(e)	211	18,990
Harrahs
Operating Co., Inc.:
10%,
12/15/15 (a)	20	5,600
10.75%,
2/01/16	191	26,740
10.75%,
2/01/18 (b)	473	29,018
10%,
12/15/18 (a)	179	50,120
Seneca
Gaming Corp. Series B, 7.25%, 5/01/12	190	140,600
Tropicana
Entertainment LLC Series WI, 9.625%, 12/15/14 (d)(e)	50	500
		1,359,981

See Notes to Financial Statements. — 56	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Schedule of Investments (continued)
(Percentages shown
are based on Net Assets)

Corporate Bonds	Par (000)	Value
IT Services0.7%
First Data
Corp., 9.875%, 9/24/15	$ 330	$ 181,500
iPayment,
Inc., 9.75%, 5/15/14	175	103,250
iPayment
Investors LP, 12.75%, 7/15/14 (a)(b)	689	172,191
		456,941
Independent Power Producers &
Energy Traders1.1%
AES
Ironwood LLC, 8.875%, 11/30/25	97	87,478
NRG Energy,
Inc.:
7.25%,
2/01/14	50	47,125
7.375%,
2/01/16	400	369,000
Texas
Competitive Electric Holdings Co. LLC, 10.50%, 11/01/16 (b)	500	240,000
		743,603
Industrial
Conglomerates0.2%
Sequa Corp.
(a):
11.75%,
12/01/15	500	80,000
13.50%,
12/01/15 (b)	773	92,511
		172,511
Insurance0.5%
MetLife,
Inc., 6.125%, 12/01/11	325	325,556
Machinery0.6%
AGY Holding
Corp., 11%, 11/15/14	260	156,000
Accuride
Corp., 8.50%, 2/01/15	110	33,000
Sunstate
Equipment Co. LLC, 10.50%, 4/01/13 (a)	470	258,500
		447,500
Marine0.1%
Navios
Maritime Holdings, Inc., 9.50%, 12/15/14	156	93,600
Media9.6%
Affinion
Group, Inc., 10.125%, 10/15/13	655	507,625
CMP
Susquehanna Corp., 9.875%, 5/15/14	500	15,000
CSC
Holdings, Inc. Series B, 8.125%, 7/15/09	130	132,275
Cablevision
Systems Corp. Series B, 8.334%, 4/01/09 (c)	120	120,000
Charter
Communications Holdings II, LLC (d)(e):
10.25%,
9/15/10	300	241,500
Series B,
10.25%, 9/15/10	95	76,000
DirecTV
Holdings LLC, 8.375%, 3/15/13	210	212,100
EchoStar
DBS Corp., 7%, 10/01/13	221	206,082
Local
Insight Regatta Holdings, Inc., 11%, 12/01/17	229	54,960
Network
Communications, Inc., 10.75%, 12/01/13	325	50,375
News
America, Inc., 6.20%, 12/15/34	1,500	1,139,837
Nielsen
Finance LLC, 10%, 8/01/14	1,035	853,875
Rainbow
National Services LLC (a):
8.75%,
9/01/12	210	210,263
10.375%,
9/01/14	1,455	1,489,556
TCI
Communications, Inc., 7.875%, 2/15/26	1,000	952,922
TL
Acquisitions, Inc., 10.50%, 1/15/15 (a)	925	434,750
		6,697,120
Metals &
Mining1.8%
AK Steel
Corp., 7.75%, 6/15/12	95	81,700
Aleris
International, Inc., 10%, 12/15/16 (d)(e)	315	394
FMG Finance
Property Ltd., 10.625%, 9/01/16 (a)	430	365,500
Freeport-McMoRan
Copper & Gold, Inc., 7.084%, 4/01/15 (c)	630	470,925
Newmont
Mining Corp., 1.625%, 7/15/17 (f)	200	215,750
Steel
Dynamics, Inc., 7.375%, 11/01/12	145	125,425
		1,259,694
Multi-Utilities1.8%
DTE Energy
Co., 7.05%, 6/01/11	250	252,335
Dominion
Resources, Inc., 5.70%, 9/17/12	1,000	1,014,778
		1,267,113
Oil, Gas & Consumable
Fuels5.4%
Berry
Petroleum Co., 8.25%, 11/01/16	100	51,000
Chesapeake
Energy Corp.:
6.375%,
6/15/15	130	106,275

Corporate Bonds	Par (000)	Value
Oil, Gas & Consumable Fuels
(concluded)
Chesapeake
Energy Corp. (concluded):
9.50%,
2/15/15	$ 750	$ 697,500
7.25%,
12/15/18	410	333,125
2.25%,
12/15/38 (f)	275	146,094
Compton
Petroleum Finance Corp., 7.625%, 12/01/13	225	75,375
Corral
Finans AB, 2.594%, 4/15/10 (a)(b)	612	340,319
EXCO
Resources, Inc., 7.25%, 1/15/11	275	219,656
Encore
Acquisition Co., 6%, 7/15/15	30	23,250
Forest Oil
Corp., 7.25%, 6/15/19 (a)	710	568,000
Massey
Energy Co., 3.25%, 8/01/15 (f)	580	368,300
OPTI
Canada, Inc., 8.25%, 12/15/14	320	108,800
Occidental
Petroleum Corp., 6.75%, 1/15/12	250	267,298
Sabine Pass
LNG LP, 7.50%, 11/30/16	305	205,113
Whiting
Petroleum Corp.:
7.25%,
5/01/12	15	12,600
7.25%,
5/01/13	300	244,500
		3,767,205
Paper & Forest
Products0.6%
Bowater,
Inc.:
9%, 8/01/09	200	51,000
4.996%,
3/15/10 (c)	60	10,800
NewPage
Corp., 10%, 5/01/12	750	226,875
Verso Paper
Holdings LLC Series B, 4.92%, 8/01/14 (c)	626	162,760
		451,435
Pharmaceuticals1.5%
Wyeth,
6.50%, 2/01/34	1,000	1,077,730
Real Estate Management &
Development0.0%
Realogy
Corp., 12.375%, 4/15/15	195	23,400
Road & Rail0.8%
Canadian
National Railway Co., 6.90%, 7/15/28	500	526,618
Software0.0%
BMS
Holdings, Inc., 9.224%, 2/15/12 (a)(b)(c)	69	16,662
Specialty
Retail1.5%
General
Nutrition Centers, Inc.:
7.584%,
3/15/14 (c)	360	212,400
10.75%,
3/15/15	260	182,000
Group 1
Automotive, Inc., 2.25%, 6/15/36 (f)(g)	50	22,375
Lazy Days
R.V. Center, Inc., 11.75%, 5/15/12 (d)(e)	357	28,560
Michaels
Stores, Inc.:
10%,
11/01/14	280	95,550
11.375%,
11/01/16	175	41,344
Sonic
Automotive, Inc. Series B, 8.625%, 8/15/13	1,400	434,000
		1,016,229
Textiles, Apparel & Luxury
Goods0.1%
Quiksilver,
Inc., 6.875%, 4/15/15	100	50,000
Thrifts & Mortgage
Finance0.3%
Residential
Capital LLC, 8.50%, 5/15/10 (a)	267	184,230
Wireless Telecommunication
Services6.2%
Cricket
Communications, Inc.:
9.375%,
11/01/14	185	168,812
10%,
7/15/15 (a)	160	147,600
Digicel
Group Ltd. (a):
8.875%,
1/15/15	570	424,650
9.125%,
1/15/15 (b)	439	307,300
iPCS, Inc.,
3.295%, 5/01/13 (c)	20	14,400
MetroPCS
Wireless, Inc., 9.25%, 11/01/14	1,105	1,044,225
Nordic
Telephone Co. Holdings ApS, 8.875%, 5/01/16 (a)	500	455,000
Sprint
Capital Corp.:
7.625%,
1/30/11	720	624,600
6.875%,
11/15/28	240	132,600
Vodafone
Group Plc, 7.75%, 2/15/10	1,000	1,039,343
		4,358,530
Total Corporate Bonds69.0%		48,268,155

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	57

Schedule of Investments (continued)
(Percentages shown are based on Net Assets)

Floating Rate Loan Interests	Par (000)	Value
Auto Components1.3%
Allison
Transmission, Inc. Term Loan, 3.32%, 8/07/14	$ 1,098	$ 727,478
Dana
Holding Corp. Term Advance, 7.25%, 1/31/15	600	182,457
Delphi
Corp.:
Initial
Tranche Term Loan C, 10.50%, 6/30/09	105	16,425
Subsequent
Tranche Term Loan C, 10.50%, 6/30/09	10	1,564
		927,924
Automobiles0.2%
Ford Motor
Company Term Loan, 5%, 12/15/13	249	79,410
General
Motors Corp.Secured Term Loan, 4.148%, 11/29/13	223	79,986
		159,396
Building
Products0.7%
Building
Materials Corp. of America Term Loan Advance, 3.625%3.875%, 2/22/14	248	169,142
Stile
Acquisition Corp. (aka Masonite):
Canadian
Term Loan, 6.75%, 4/06/13	369	150,788
US Term
Loan, 6.25%, 4/06/13	374	152,860
		472,790
Chemicals0.6%
PQ Corp.
(aka Niagara Acquisition, Inc.) Loan (Second Lien), 7.68%, 7/30/15	750	262,500
Solutia
Inc. Loan, 8.50%, 2/28/14	200	128,500
		391,000
Health Care Providers &
Services0.9%
CHS/Community
Health Systems, Inc.:
Delayed
Draw Term Loan, 2.729%, 7/25/14	27	22,658
Funded Term
Loan, 2.729%3.506%, 7/25/14	523	443,030
HCA Inc.
Tranche A-1 Term Loan, 2.959%, 11/17/12	195	169,784
		635,472
Independent Power Producers &
Energy Traders1.4
Calpine
Generating Co., LLC Second Priority Term Loan, 4.335%, 3/29/14	199	144,342
Dynegy
Holdings Inc.:
Letter of
Credit Facility Term Loan, 1.98%, 4/02/13	166	136,956
Tranche B
Term Loan, 1.98%, 4/02/13	10	7,774
NRG Energy,
Inc.:
Credit-Linked
Deposit, 1.359%, 2/01/13	82	75,564
Term Loan,
1.869%2.959%, 2/01/13	167	153,542
Texas Competitive
Electric Holdings Co., LLC (TXU) Initial Tranche B-2 Term Loan, 3.948%4.451%, 10/10/14	746	465,541
		983,719
Machinery0.7%
Navistar
International Corp.:
Revolving
Credit-Linked Deposit, 3.367%3.729%, 1/19/12	180	128,850
Term
Advance, 3.729%, 1/19/12	500	357,917
		486,767
Media0.5%
Cengage
Learning Acquisitions, Inc. (Thomson Learning) Tranche 1 Incremental Term Loan, 7.50%, 7/03/14	498	348,250
Multiline
Retail0.1%
Dollar
General Corp. Tranche B-1 Term Loan, 3.198%3.924%, 7/07/14	100	86,341
Paper & Forest
Products0.1%
Georgia-Pacific
LLC Term B Loan, 2.956%4.189%, 12/20/12	116	100,132
Total Floating Rate Loan
Interests6.5%		4,591,791

Non-U.S. Government Agency Mortgage-Backed Securities	Par (000)	Value
Commercial
Mortgage-Backed Securities1.4%
Crown Castle Towers LLC Series 2005-1A:
Class AFL,
0.841%, 6/15/35 (c)	$ 745	$ 677,950
Class AFX,
4.643%, 6/15/35 (a)	205	195,775
Global
Signal Trust Series 2006-1 Class A2, 5.45%, 2/15/36	115	107,525
Total Non-U.S.Government Agency Mortgage-Backed Securities1.4%		981,250

Common Stocks	Shares
Media0.0%
Adelphia Recovery Trust	396,568	3,966
Total Common Stocks0.0%		3,966

Preferred Securities — Capital Trusts	Par (000 )
Commercial
Banks1.8%
Barclays Bank Plc, 8.55% (a)(c)(h)	$ 650	235,932
Wells Fargo & Co. Series K, 7.98%, (c)(h)	2,000	1,000,000
		1,235,932
Diversified
Financial Services0.1%
Citigroup, Inc. Series E, 8.40% (c)(h)	115	40,262
Total Capital Trusts1.9%		1,276,194

Preferred Stocks	Shares
Capital
Markets0.0%
Marsico Parent Superholdco, LLC, 16.75% (a)	23	10,005
Total Preferred Stocks0.0%		10,005
Total Preferred Securities1.9%		1,286,199

Other Interests (i)
Health
Care Providers & Services0.0%
Critical Care Systems International, Inc.	$ 1	191
Media0.0%
Adelphia Recovery Trust Escrow	400	5,500
Total Other Interests0.0%		5,691
Total Long-Term Investments (Cost$76,224,462)78.8%		55,137,052

See Notes to Financial Statements. — 58	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

| Schedule of
Investments (concluded) |
| --- |
| (Percentages shown
are based on Net Assets) |

Short-Term Securities		Value
BlackRock
Liquidity Funds, TempFund 0.75% (j)(k)	13,542	$ 13,541,578
Total Short-Term Securities (Cost$13,541,578)19.4%		13,541,578

Options Purchased	Contracts
Over-the-Counter Call
Options
Marsico
Parent Superholdco LLC, expiring December 2009 at USD 942.86 Broker The Goldman Sachs & Co.	6	9,690
Total Options Purchased (Cost$5,867)0.0%		9,690
Total Investments (Cost$89,771,907*)98.2%		68,688,320
Other Assets Less Liabilities1.8%		1,248,663
Net Assets100.0%	$	69,936,983

The cost and unrealized appreciation (depreciation) as of February 28, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$
Gross unrealized appreciation	$ 258,325
Gross unrealized depreciation	(21,389,989	)
Net unrealized depreciation	$ (21,131,664	)

| (a) | Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt
from registration to qualified institutional investors. |
| --- | --- |
| (b) | Represents a payment-in-kind security which may pay
interest/dividends in additional par/shares. |
| (c) | Variable rate security. Rate shown is as of report date. |
| (d) | Non-income producing security |
| (e) | Issuer filed for bankruptcy and/or is in default of
interest payments. |
| (f) | Convertible security. |
| (g) | Represents a step-down bond that pays an initial coupon
rate for the first period and then a lower coupon rate for the following
periods. Rate shown reflects the current yield at report date. |
| (h) | Security is perpetual in nature and has no stated maturity
date. |
| (i) | Other interests represent beneficial interest in
liquidation trusts and other reorganization entities and are non-income
producing. |
| (j) | Represents the current yield as of report date. |
| (k) | Investments in companies considered to be an affiliate of
the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of
1940, were as follows: |

| Affiliate | Net
Activity | Income |
| --- | --- | --- |
| BlackRock Liquidity Funds, TempFund | $ 13,541,578 | $ 11,578 |


	Level 1 - price quotations in active markets/exchanges for
identical securities
	Level 2 - other observable inputs (including, but not
limited to: quoted prices for similar assets or liabilities in markets that
are not active, inputs other than quoted prices that are observable for the
assets or liabilities (such as interest rates, yield curves, volatilities,
prepayment speeds, loss severities, credit risks, and default rates) or other
market-corroborated inputs)
	Level 3 - unobservable inputs based on the best
information available in the circumstance, to the extent observable inputs
are not available (including the Trusts own assumption used in determining
the fair value of investments)

The following table summarizes the inputs used as of February 28, 2009 in determining the fair valuation of the Trusts investments:

| Valuation Inputs | Investments
in Securities | Other Financial Instruments* |
| --- | --- | --- |
| | Assets | Assets |
| Level 1 | $ 3,965 | |
| Level 2 | 66,684,976 | $ 9,690 |
| Level 3 | 1,989,689 | |
| Total | $ 68,678,630 | $ 9,690 |

Other financial instruments are options, which are shown at market value.

The following is a reconciliation of investments for unobservable inputs (Level 3) were used in determining fair value:

| | Investments
in Securities | |
| --- | --- | --- |
| | Assets | |
| Balance as of August 31, 2008 | $ 359,476 | |
| Accrued discounts/premiums | 24,939 | |
| Realized gain | 783 | |
| Change in unrealized appreciation/depreciation 1 | (2,212,087 | ) |
| Net sales | (47,738 | ) |
| Net transfers in Level 3 | 3,864,316 | |
| Balance as of February 28, 2009 | $ 1,989,689 | |

1 Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	59

Statements of Assets and Liabilities

February 28, 2009 (Unaudited)	BlackRock Core Bond Trust (BHK)
Assets
Investments
at value - unaffiliated 1	$ 363,615,267	$	263,337,352	$	287,384,703	$	84,710,263	$	28,845,504
Investments
at value - affiliated 2			11,058,272		11,405,172		5,081,539		2,491,381
Unrealized
appreciation on foreign currency exchange contracts	26,555		415,295		445,979		72,172
Unrealized
appreciation on swaps	19,343,667		11,270		12,210
Unrealized
on unfunded loan commitment					6,098
Foreign
currency at value 3	23,811		266,817		289,440		17,478
Cash							14,112		9,965
TBA sales
commitment receivable	32,650,277
Investments
sold receivable	6,911,422		297,261		340,151		157,076		42,695
Interest
receivable	4,422,912		7,959,451		8,877,875		2,673,172		869,781
Swaps
receivable	3,264,158		143,311		83,921
Income
receivable - affiliated	262		514		130		5,059		68
Commitment
fees receivable					51		21
Principal
paydown receivable	8,420		258		80,683
Prepaid
expenses	39,010		16,666		17,874		15,357		5,268
Other
assets	28,787		71,044		105,593		5,688		5,982
Total
assets	430,334,548		283,577,511		309,049,880		92,751,937		32,270,644
Liabilities
Loan
payable			48,700,000		57,900,000		18,000,000		4,250,000
Bank
overdraft	454,847		336,781		57,279
Unrealized
depreciation on swaps	11,821,855		5,228,289		5,595,640
TBA sale
commitments at value 4	32,655,864
Options
written at value 5	9,502,543
Borrowed
bonds at value 6
Interest
rate floors at value
Reverse
repurchase agreements	55,211,371
Cash held
as collateral in connection with swaps
Swaps
premiums received	483,000
Investments
purchased payable	29,961,222		1,908,383		1,761,089		593,716		107,150
Margin
variation payable	1,826,104
Interest
expense payable	17,132		19,560		13,906		4,003		1,205
Income
dividends payable			159,297		176,750		45,773
Investment
advisory fees payable	157,678		134,935		172,096		56,394		27,298
Swaps
payable	998,885		1,055		1,018
Officers
and Directors/Trustees fees payable	30,002		17,927		18,902		7,062		6,295
Deferred
Income					6,098
Administration
fee payable									2,621
Other
affiliates payable	2,455		2,655		2,830		860
Other
accrued expenses payable	154,440				12,833		69,611		53,105
Other
liabilities	363,231		19,127		110,776				19,146
Total
liabilities	143,640,629		56,528,009		65,829,217		18,777,419		4,466,820
Net Assets	$ 286,693,919	$	227,049,502	$	243,220,663	$	73,974,518	$	27,803,824
Net Assets Consist of
Par value
per share 7,8	$ 27,023	$	3,294,409	$	3,528,644			$	6,422
Paid-in
capital in excess of par	378,644,915		466,525,752		501,493,556	$	343,233,097		87,186,620
Cost of
shares held in treasury 9
Undistributed
(distributions in excess of) net investment income	1,604,592		859,996		2,067,700		449,894		(236,598	)
Accumulated
net realized loss	(38,942,517	)	(70,430,056	)	(78,952,263	)	(219,232,464	)	(38,992,134	)
Net
unrealized appreciation/depreciation	(54,640,094	)	(173,200,599	)	(184,916,974	)	(50,476,009	)	(20,160,486	)
Net Assets	$ 286,693,919	$	227,049,502	$	243,220,663	$	73,974,518	$	27,803,824
Net asset
value	$ 10.61	$	6.89	$	6.89	$	1.35	$	4.33
1 Investments
at cost - unaffiliated	$ 418,649,430	$	431,707,590	$	467,110,477	$	135,257,327	$	49,005,990
2 Investments
at cost - affiliated		$	11,058,272		11,405,172	$	5,081,539	$	2,491,381
3 Foreign
currency at cost	$ 24,188	$	271,691	$	323,022	$	17,503
4 Proceeds
from TBA sale commitments	$ 32,650,277
5 Premiums
received from options written	$ 6,422,598
6 Proceeds
from borrowed bonds
7 Par
value
per share	$ 0.001	$	0.100	$	0.100			$	0.001
8 Shares
outstanding	27,023,027		32,944,087		35,286,436		54,620,873		6,422,396
9 Shares held
in treasury

| See Notes to Financial Statements. — 60 | SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

February 28, 2009 (Unaudited)	BlackRock Income Opportunity Trust, Inc. (BNA)
Assets
Investments
at value - unaffiliated 1	$ 358,887,906	$	663,299,582	$	55,146,742
Investments
at value - affiliated 2			77,647,966		13,541,578
Unrealized
appreciation on foreign currency exchange contracts	19,019
Unrealized
appreciation on swaps	21,621,598		52,623,280
Unrealized
on unfunded loan commitment
Foreign
currency at value 3	1,444
Cash			576,983		15,281
TBA sales
commitment receivable	19,226,367		11,127,031
Investments
sold receivable	849,622		198,841		126,784
Interest
receivable	4,142,794		3,195,923		1,395,922
Swaps
receivable	3,961,055		5,625,162
Income
receivable - affiliated
Commitment
fees receivable
Principal
paydown receivable	234,407		563,471
Prepaid
expenses	42,472		40,294		8,724
Other
assets	44,786		53,008		4,959
Total
assets	409,031,470		814,951,541		70,239,990
Liabilities
Loan
payable
Bank
overdraft	718,967
Unrealized
depreciation on swaps	14,542,403		37,655,182
TBA sale
commitments at value 4	19,171,726		11,171,901
Options
written at value 5	10,881,941		4,875,665
Borrowed
bonds at value 6			21,502,741
Interest
rate floors at value			12,529,102
Reverse
repurchase agreements	35,556,425
Cash held
as collateral in connection with swaps
Swaps
premiums received	484,499		1,586,246
Investments
purchased payable	23,895,105		293,069,581		178,923
Margin
variation payable	1,798,034		201,192
Interest
expense payable	10,512
Income
dividends payable	58,096		54,706		14,290
Investment
advisory fees payable	147,164		210,706		37,057
Swaps
payable	1,930,058		6,353,040
Officers
and Directors/Trustees fees payable	50,626		54,366		5,424
Deferred
Income
Administration
fee payable	24,593		50,407
Other
affiliates payable					866
Other
accrued expenses payable	171,966		424,160
Other
liabilities			245,601		66,447
Total
liabilities	109,442,115		389,984,596		303,007
Net Assets	$ 299,589,355	$	424,966,945	$	69,936,983
Net Assets Consist of
Par value
per share 7,8	$ 344,497	$	639,425	$	7,058
Paid-in
capital in excess of par	402,521,909		478,686,574		98,443,594
Cost of
shares held in treasury 9	(17,377,850	)
Undistributed
(distributions in excess of) net investment income	1,663,691		8,098,242		(53,399	)
Accumulated
net realized loss	(37,123,551	)	(62,273,037	)	(7,376,683	)
Net unrealized
appreciation/depreciation	(50,439,341	)	(184,259	)	(21,083,587	)
Net Assets	$ 299,589,355	$	424,966,945	$	69,936,983
Net asset
value	$ 8.70	$	6.65	$	9.91
1 Investments
at cost - unaffiliated	$ 409,072,320	$	659,373,255	$	76,230,329
2 Investments
at cost - affiliated		$	77,647,966	$	13,541,578
3 Foreign
currency at cost	$ 1,389
4 Proceeds
from TBA sale commitments	$ 19,226,367	$	11,127,031
5 Premiums
received from options written	$ 7,443,775	$	2,829,409
6 Proceeds
from borrowed bonds		$	19,383,094
7 Par
value
per share	$ 0.010	$	0.010	$	0.001
8 Shares
outstanding	34,449,693		63,942,536		7,058,402
9 Shares held
in treasury	1,757,400

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 61

Statements of Operations

| Six Months Ended February 28, 2009
(Unaudited) | BlackRock Core Bond Trust (BHK) | | BlackRock Corporate High Yield Fund V, Inc. (HYV) | | BlackRock Corporate High Yield Fund VI, Inc. (HYT) | | BlackRock High Income Shares (HIS) | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Investment Income | | | | | | | | |
| Interest | $ 12,140,759 | | $ 20,612,178 | | $ 22,100,908 | | $ 6,313,701 | |
| Dividends | | | 55 | | 5 | | 38,975 | |
| Facility
and other fees | 4,425 | | 198,719 | | 199,751 | | 21,314 | |
| Income -
affiliated | 65,975 | | 25,172 | | 27,428 | | 2,043 | |
| Total
income | 12,211,159 | | 20,836,124 | | 22,328,092 | | 6,376,033 | |
| Expenses | | | | | | | | |
| Investment
advisory | 1,010,625 | | 1,032,822 | | 1,304,047 | | 414,007 | |
| Professional | 47,416 | | 240,230 | | 262,768 | | 54,203 | |
| Accounting
services | 37,141 | | 24,149 | | 29,315 | | 10,283 | |
| Printing | 28,712 | | 7,090 | | 11,231 | | 20,624 | |
| Custodian | 18,060 | | 9,560 | | 11,336 | | 8,612 | |
| Officer and
Directors/Trustees | 8,415 | | 7,141 | | 6,818 | | 3,924 | |
| Transfer
agent | 5,750 | | 14,760 | | 11,752 | | 11,743 | |
| Registration | 4,211 | | 3,109 | | 3,424 | | 8,607 | |
| Borrowing
costs 1 | | | 279,943 | | 306,211 | | 66,171 | |
| Administration | | | | | | | | |
| Miscellaneous | 43,269 | | 21,563 | | 21,939 | | 24,900 | |
| Total
expenses excluding interest expense | 1,203,599 | | 1,640,367 | | 1,968,841 | | 623,074 | |
| Interest
expense | 599,044 | | 1,508,371 | | 1,704,455 | | 404,750 | |
| Total
expenses | 1,802,643 | | 3,148,738 | | 3,673,296 | | 1,027,824 | |
| Less fees
waived by advisor | (782 | ) | | | | | (283 | ) |
| Less fees
paid indirectly | | | (504 | ) | (562 | ) | (191 | ) |
| Total
expenses after fees waived and paid indirectly | 1,801,861 | | 3,148,234 | | 3,672,734 | | 1,027,350 | |
| Net
investment income | 10,409,298 | | 17,687,890 | | 18,655,358 | | 5,348,683 | |
| Realized and Unrealized Gain
(Loss) | | | | | | | | |
| Net
realized gain (loss) from: | | | | | | | | |
| Investments | (14,733,501 | ) 2 | (42,563,040 | ) | (45,053,170 | ) | (12,209,519 | ) |
| Futures and
swaps | (2,866,630 | ) | (3,919,703 | ) | (4,143,645 | ) | | |
| Foreign
currency | 761,246 | | 997,221 | | 1,071,764 | | 168,192 | |
| Options
written | 948,805 | | | | | | | |
| Interest
rate floors | | | | | | | | |
| | (15,890,080 | ) | (45,485,522 | ) | (48,125,051 | ) | (12,041,327 | ) |
| Net change
in unrealized appreciation/ depreciation on: | | | | | | | | |
| Investments | (35,560,255 | ) | (114,990,595 | ) | (122,058,894 | ) | (34,887,286 | ) |
| Futures and
swaps | (4,343,090 | ) | (2,623,720 | ) | (2,825,209 | ) | | |
| Foreign
currency | (3,376,827 | ) | 238,855 | | 238,307 | | 60,715 | |
| Options
written | (464,866 | ) | | | | | | |
| TBA sale
commitments | 348,979 | | | | | | | |
| Borrowed
bonds | | | | | | | | |
| Interest
rate floors | | | | | | | | |
| Unfunded
corporate loans | | | | | 6,098 | | | |
| | (43,396,059 | ) | (117,375,460 | ) | (124,639,698 | ) | (34,826,571 | ) |
| Total realized
and unrealized loss | (59,286,139 | ) | (162,860,982 | ) | (172,764,749 | ) | (46,867,898 | ) |
| Net Decrease in Net Assets Resulting from Operations | $ (48,876,841 | ) | $ (145,173,092 | ) | $ (154,109,391 | ) | $ (41,519,215 | ) |

| 1 | See Note 8 of the Notes to Financial Statements for
details of short-term borrowings. |
| --- | --- |
| 2 | Includes $11,657 from affiliates. |

| See Notes to Financial Statements. — 62 | SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 |
| --- | --- | --- |

Statements of Operations

| Six Months Ended February 28, 2009
(Unaudited) | BlackRock High Yield Trust (BHY) | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Investment Income | | | | | | | | |
| Interest | $ 2,117,830 | $ | 11,826,019 | $ | 12,659,279 | $ | 3,403,275 | |
| Dividends | | | 13,194 | | | | 805 | |
| Facility
and other fees | 6,473 | | | | | | | |
| Income-affiliated | 1,975 | | 91,526 | | 53,146 | | 11,239 | |
| Total
income | 2,126,278 | | 11,930,739 | | 12,712,425 | | 3,415,319 | |
| Expenses | | | | | | | | |
| Investment
advisory | 201,518 | | 944,718 | | 1,373,206 | | 278,504 | |
| Borrowing | 26,198 | | | | | | | |
| Professional | 43,210 | | 45,359 | | 48,124 | | 32,479 | |
| Accounting
services | 8,044 | | 35,552 | | 45,707 | | 8,800 | |
| Transfer
agent | 5,891 | | 9,576 | | 25,865 | | 5,605 | |
| Registration | 4,291 | | 3,564 | | 9,160 | | 4,227 | |
| Printing | 9,644 | | 37,438 | | 35,705 | | 7,896 | |
| Officer and
Directors/Trustees | | | 9,852 | | 12,604 | | 3,138 | |
| Custodian | 5,794 | | 20,021 | | 24,497 | | 5,491 | |
| Administration | 19,192 | | 157,453 | | 316,894 | | | |
| Miscellaneous | 22,739 | | 43,026 | | 42,821 | | 21,075 | |
| Total
expenses excluding interest expense | 346,521 | | 1,306,559 | | 1,934,583 | | 367,215 | |
| Interest
expense | 118,133 | | 266,131 | | 461,096 | | 2,245 | |
| Total
expenses | 464,654 | | 1,572,690 | | 2,395,679 | | 369,460 | |
| Less fees
waived by advisor | (227 | ) | (391 | ) | (7,724 | ) | (37,038 | ) |
| Less fees
paid indirectly | (204 | ) | (237 | ) | | | (226 | ) |
| Total
expenses after waiver and fees paid indirectly | 464,223 | | 1,572,062 | | 2,387,955 | | 332,196 | |
| Net
investment income | 1,662,055 | | 10,358,677 | | 10,324,470 | | 3,083,123 | |

| Realized and Unrealized Gain
(Loss) | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net
realized gain (loss) from: | | | | | | | | |
| Investments | (3,502,873 | ) | (15,248,725 | ) 1 | 26,738,606 2 | | (4,865,042 | ) |
| Futures and
swaps | (183,602 | ) | (3,421,474 | ) | (8,088,681 | ) | (66,817 | ) |
| Foreign currency | | | 788,302 | | | | | |
| Options
written | | | 842,993 | | 1,980,000 | | | |
| Interest
rate floors | | | | | 484,699 | | | |
| | (3,686,475 | ) | (17,038,904 | ) | 21,114,624 | | (4,931,859 | ) |
| Net change
in unrealized appreciation/ depreciation on: | | | | | | | | |
| Investments | (12,120,480 | ) | (31,010,376 | ) | (29,650,966 | ) | (15,127,623 | ) |
| Futures and
swaps | (61 | ) | (4,655,526 | ) | (4,891,999 | ) | 81,859 | |
| Foreign
currency | | | (523,741 | ) | | | | |
| Options written | | | (3,751,628 | ) | (2,396,158 | ) | | |
| TBA sale
commitments | | | 296,837 | | 97,535 | | | |
| Borrowed
bonds | | | | | (679,632 | ) | | |
| Interest
rate floors | | | | | (3,797,114 | ) | | |
| Unfunded
corporate loans | | | | | | | | |
| | (12,120,541 | ) | (39,644,434 | ) | (41,318,334 | ) | (15,045,764 | ) |
| Total realized and unrealized loss | (15,807,016 | ) | (56,683,338 | ) | (20,203,710 | ) | (19,977,623 | ) |
| Net Decrease in Net Assets Resulting from Operations | $ (14,144,961 | ) | $ (46,324,661 | ) | $ (9,879,240 | ) | $ (16,894,500 | ) |

| 1 | Includes
$11,931 from affiliates |
| --- | --- |
| 2 | Includes
$(2) from affiliates. |

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	63

Statements of Changes in Net Assets

| Increase (Decrease) in Net Assets: | BlackRock Core Bond Trust (BHK) — Six
Months Ended February 28, 2009 (Unaudited) | Period
November 1, 2007 to August 31, 2008 | | Year
Ended October 31, 2007 | | |
| --- | --- | --- | --- | --- | --- | --- |
| Operations | | | | | | |
| Net
investment income | $ 10,409,298 | $ | 13,641,713 | $ | 19,706,087 | |
| Net
realized gain (loss) | (15,890,080 | ) | (8,544,877 | ) | 341,954 | |
| Net change
in unrealized appreciation/depreciation | (43,396,059 | ) | (10,368,703 | ) | (3,507,844 | ) |
| Net
increase (decrease) in net assets resulting from operations | (48,876,841 | ) | (5,271,867 | ) | 16,540,197 | |
| Dividends and Distributions to
Shareholders From | | | | | | |
| Net
investment income 1 | (10,650,990 | ) | (16,387,174 | ) | (16,495,698 | ) |
| Net
realized gain | | | | | | |
| Tax return
of capital | | | (499,560 | ) | (5,227,396 | ) |
| Decrease in
net assets resulting from dividends and distributions to shareholders | (10,650,990 | ) | (16,886,734 | ) | (21,723,094 | ) |
| Capital Share
Transactions | | | | | | |
| Reinvestment
of dividends | 45,124 | | | | | |
| Net Assets | | | | | | |
| Total
decrease in net assets | (59,482,707 | ) | (22,158,601 | ) | (5,182,897 | ) |
| Beginning
of period | 346,176,626 | | 368,335,227 | | 373,518,124 | |
| End of
period | $ 286,693,919 | $ | 346,176,626 | $ | 368,335,227 | |
| End of
period undistributed (distributions in excess of) net investment income | $ 1,604,592 | $ | 1,846,284 | $ | (1,696,051 | ) |

1 A portion of the dividends from net investment income for the six months ended February 28, 2009 may be deemed a tax return of capital or net realized gain at fiscal year end.

| Increase (Decrease) in Net Assets: | BlackRock High Income Shares (HIS) — Six
Months Ended February 28, 2009 (Unaudited) | Period
January 1, 2008 to August 31, 2008 | | Year
Ended December 31, 2007 | | |
| --- | --- | --- | --- | --- | --- | --- |
| Operations | | | | | | |
| Net
investment income | $ 5,348,683 | $ | 8,117,286 | $ | 12,884,718 | |
| Net
realized gain (loss) | (12,041,327 | ) | (7,079,170 | ) | (1,962,158 | ) |
| Net change
in unrealized appreciation/depreciation | (34,826,571 | ) | (7,369,210 | ) | (9,438,736 | ) |
| Net
increase (decrease) in net assets resulting from operations | (41,519,215 | ) | (6,331,094 | ) | 1,483,824 | |
| Dividends and Distributions to
Shareholders From | | | | | | |
| Net
investment income 1 | (6,314,610 | ) | (6,958,699 | ) | (12,923,299 | ) |
| Net
realized gain | | | | | | |
| Tax return
of capital | | | | | | |
| Decrease in
net assets resulting from dividends and distributions to shareholders | (6,314,610 | ) | (6,958,699 | ) | (12,923,299 | ) |
| Capital Share
Transactions | | | | | | |
| Reinvestment
of dividends | | | | | | |
| Net Assets | | | | | | |
| Total
increase (decrease) in net assets | (47,833,825 | ) | (13,289,793 | ) | (11,439,475 | ) |
| Beginning
of period | 121,808,343 | | 135,098,136 | | 146,537,611 | |
| End of
period | $ 73,974,518 | $ | 121,808,343 | $ | 135,098,136 | |
| End of
period undistributed (distributions in excess of) net investment income | $ 449,894 | $ | 1,415,821 | $ | (33,209 | ) |

1 A portion of the dividends from net investment income for the six months ended February 28, 2009 may be deemed a tax return of capital or net realized gain at fiscal year end.

| See Notes to Financial Statements. — 64 | SEMI-ANNUAL REPORT | FEBRUARY
28, 2009 |
| --- | --- | --- |

| Increase (Decrease) in Net Assets: | BlackRock Corporate High Yield Fund V, Inc. (HYV) — Six
Months Ended February 28, 2009 (Unaudited) | Year
Ended August 31, 2008 | | Six
Months Ended February 28, 2009 (Unaudited) | | Year
Ended August 31, 2008 | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Operations | | | | | | | | |
| Net
investment income | $ 17,687,890 | $ | 38,907,940 | $ | 18,655,358 | $ | 40,916,220 | |
| Net
realized gain (loss) | (45,485,522 | ) | (24,400,710 | ) | (48,125,051 | ) | (27,115,557 | ) |
| Net change
in unrealized appreciation/depreciation | (117,375,460 | ) | (36,644,816 | ) | (124,639,698 | ) | (38,782,173 | ) |
| Net
increase (decrease) in net assets resulting from operations | (145,173,092 | ) | (22,137,586 | ) | (154,109,391 | ) | (24,981,510 | ) |
| Dividends and Distributions to
Shareholders From | | | | | | | | |
| Net
investment income 1 | (21,166,444 | ) | (38,515,495 | ) | (22,171,879 | ) | (42,767,302 | ) |
| Net
realized gain | | | (1,667,429 | ) | | | | |
| Tax return
of capital | | | | | | | | |
| Decrease in
net assets resulting from dividends and distributions to shareholders | (21,166,444 | ) | (40,182,924 | ) | (22,171,879 | ) | (42,767,302 | ) |
| Capital Share
Transactions | | | | | | | | |
| Reinvestment
of dividends | | | | | | | | |
| Net Assets | | | | | | | | |
| Total
decrease in net assets | (166,339,536 | ) | (62,320,510 | ) | (176,281,270 | ) | (67,748,812 | ) |
| Beginning
of period | 393,389,038 | | 455,709,548 | | 419,501,933 | | 487,250,745 | |
| End of
period | $ 227,049,502 | $ | 393,389,038 | $ | 243,220,663 | $ | 419,501,933 | |
| End of
period undistributed (distributions in excess of) net investment income | $ 859,996 | $ | 4,338,550 | $ | 2,067,700 | $ | 5,584,221 | |

Increase (Decrease) in Net Assets:	BlackRock High Yield Trust (BHY) — Six Months Ended February 28, 2009 (Unaudited)		Period November 1, 2007 to August 31, 2008	Year Ended October 31, 2007		Six Months Ended February 28, 2009 (Unaudited)		Period November 1, 2007 to August 31, 2008		Year Ended October 31, 2007
Operations
Net investment income	$ 1,662,055		$ 3,222,658	$	4,031,885	$	10,358,677	$	18,219,919	$	21,461,718
Net realized gain (loss)	(3,686,475	)	(2,046,912	)	(2,450,156	)	(17,038,904	)	(14,439,291	)	2,113,139
Net change in unrealized
appreciation/depreciation	(12,120,541	)	(4,787,603	)	2,730,808		(39,644,434	)	(9,222,740	)	(6,083,476	)
Net increase (decrease) in net assets
resulting from
operations	(14,144,961	)	(3,611,857	)	4,312,537		(46,324,661	)	(5,442,112	)	17,491,381
Dividends and Distributions to
Shareholders From
Net investment
income 1	(1,964,343	)	(3,273,618	)	(3,927,807	)	(10,541,606	)	(17,707,143	)	(20,862,233	)
Net realized gain
Tax return of capital											(1,874,570	)
Decrease in net assets resulting from
dividends and
distributions to shareholders	(1,964,343	)	(3,273,618	)	(3,927,807	)	(10,541,606	)	(17,707,143	)	(22,736,803	)
Capital Share
Transactions
Reinvestment of dividends	16,347				12,289
Net Assets
Total increase (decrease) in net
assets	(16,092,957	)	(6,885,475	)	397,019		(56,866,267	)	(23,149,255	)	(5,245,422	)
Beginning of period	43,896,781		50,782,256		50,385,237		356,455,622		379,604,877		384,850,299
End of period	$ 27,803,824		$ 43,896,781	$	50,782,256	$	299,589,355	$	356,455,622	$	379,604,877
End of period undistributed
(distributions in excess of)
net investment income	$ (236,598	)	$ 65,690	$	116,650	$	1,663,691	$	1,846,620	$	768,824

| See Notes to Financial Statements. — SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 | 65 |
| --- | --- | --- |

Statements of Changes in Net Assets (concluded)

| Increase (Decrease) in Net Assets | BlackRock Income Trust, Inc. (BKT) — Six
Months Ended February 28, 2009 (Unaudited) | Period
November 1, 2007 to August 31, 2008 | | Year
Ended October 31, 2007 | | |
| --- | --- | --- | --- | --- | --- | --- |
| Operations | | | | | | |
| Net
investment income | $ 10,324,470 | $ | 16,649,258 | $ | 18,973,713 | |
| Net
realized gain (loss) | 21,114,624 | | (9,938,710 | ) | (10,368,025 | ) |
| Net change
in unrealized appreciation/depreciation | (41,318,334 | ) | 35,486,218 | | 18,371,718 | |
| Net
increase (decrease) in net assets resulting from operations | (9,879,240 | ) | 42,196,766 | | 26,977,406 | |
| Dividends and Distributions to
Shareholders From | | | | | | |
| Net investment
income 1 | (9,207,725 | ) | (15,793,807 | ) | (18,808,452 | ) |
| Net
realized gain | | | | | | |
| Tax return
of capital | | | | | (4,978,175 | ) |
| Decrease in
net assets resulting from dividends and distributions to shareholders | (9,207,725 | ) | (15,793,807 | ) | (23,786,627 | ) |
| Net Assets | | | | | | |
| Total
increase (decrease) in net assets | (19,086,965 | ) | 26,402,959 | | 3,190,779 | |
| Beginning
of period | 444,053,910 | | 417,650,951 | | 414,460,172 | |
| End of
period | $ 424,966,945 | $ | 444,053,910 | $ | 417,650,951 | |
| End of
period undistributed (distributions in excess of) net investment income | $ 8,098,242 | $ | 6,981,497 | $ | (6,313,294 | ) |

1 A portion of the dividends from net investment income for the six months ended February 28, 2009 may be deemed a tax return of capital or net realized gain at fiscal year end.

| Increase (Decrease) in Net Assets | BlackRock Strategic Bond Trust (BHD) — Six
Months Ended February 28, 2009 (Unaudited) | | Period
November 1, 2007 to August 31, 2008 | Year
Ended October 31, 2007 | | |
| --- | --- | --- | --- | --- | --- | --- |
| Operations | | | | | | |
| Net
investment income | $ 3,083,123 | | $ 5,362,221 | $ | 6,735,537 | |
| Net
realized gain (loss) | (4,931,859 | ) | (1,927,321 | ) | 999,009 | |
| Net change
in unrealized appreciation/depreciation | (15,045,764 | ) | (5,317,189 | ) | (1,416,472 | ) |
| Net increase (decrease) in net assets resulting from
operations | (16,894,500 | ) | (1,882,289 | ) | 6,318,074 | |
| Dividends to Shareholders
From | | | | | | |
| Net
investment income 1 | (3,260,982 | ) | (5,434,969 | ) | (6,521,963 | ) |
| Net Assets | | | | | | |
| Total
decrease in net assets | (20,155,482 | ) | (7,317,258 | ) | (203,889 | ) |
| Beginning
of period | 90,092,465 | | 97,409,723 | | 97,613,612 | |
| End of
period | $ 69,936,983 | | $ 90,092,465 | $ | 97,409,723 | |
| End of
period undistributed (distributions in excess of) net investment income | $ (53,399 | ) | $ 124,460 | $ | 197,208 | |

1 A portion of the dividends from net investment income for the six months ended February 28, 2009 may be deemed a tax return of capital or net realized gain at fiscal year end.

See Notes to Financial Statements.

66 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

S tatements of Cash Flows

| Six Months Ended
February 28, 2009 (Unaudited) | BlackRock Core Bond Trust (BHK) | | BlackRock Corporate High Yield Fund V, Inc. (HYV) | | BlackRock Corporate High Yield Fund VI, Inc. (HYT) | | BlackRock High Income Shares (HIS) | | BlackRock High Yield Trust (BHY) | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Cash Used for/Provided by Operating
Activities | | | | | | | | | | |
| Net
decrease in net assets resulting from operations | $ (48,876,841 | ) | $ (145,173,092 | ) | $ (154,109,391 | ) | $ (41,519,215 | ) | $ (14,144,961 | ) |
| Adjustments
to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities: | | | | | | | | | | |
| Decrease in
receivables | 241,008 | | 2,814,603 | | 2,721,010 | | 904,087 | | 307,114 | |
| Increase
(decrease) in prepaid expenses and other assets | 18,664 | | (55,692 | ) | (89,282 | ) | 5,034 | | 4,005 | |
| Increase
(decrease) in other liabilities | 334,983 | | (216,488 | ) | (182,092 | ) | (190,398 | ) | (18,203 | ) |
| Net
realized and unrealized loss | 56,104,538 | | 159,567,696 | | 168,305,386 | | 47,051,440 | | 15,611,723 | |
| Amortization
of premium and discount on investments | 1,749,364 | | (1,362,494 | ) | (1,461,323 | ) | (289,390 | ) | (83,973 | ) |
| Paid-in-kind
Income | | | (3,057 | ) | (378,311 | ) | (81,070 | ) | (66,439 | ) |
| Increase in
TBA sale commitments | 11,651,978 | | | | | | | | | |
| Premiums
received from options written | (2,057,733 | ) | | | | | | | | |
| Proceeds
from sales and paydowns of long-term securities | 878,197,385 | | 140,924,802 | | 140,914,714 | | 34,494,843 | | 10,734,449 | |
| Purchases
of long-term securities | (842,513,326 | ) | (84,893,195 | ) | (83,358,770 | ) | (21,679,565 | ) | (7,463,362 | ) |
| Net
proceeds (purchases) of short-term investments | 3,003,523 | | (4,710,831 | ) | 2,872,011 | | (3,473,120 | ) | (981,729 | ) |
| Premiums
paid on closing options written | 1,239,152 | | | | | | | | | |
| Cash
provided by operating activities | 59,092,695 | | 66,892,252 | | 75,233,952 | | 15,222,646 | | 3,898,624 | |
| Cash Used for Financing
Activities | | | | | | | | | | |
| Cash
receipts from borrowings | | | 30,000,000 | | 34,000,000 | | 15,000,000 | | 14,000,000 | |
| Cash
payments from borrowings | | | (76,000,000 | ) | (87,000,000 | ) | (24,000,000 | ) | (16,000,000 | ) |
| Cash
receipts from reverse repurchase agreements | 189,118,619 | | | | | | | | | |
| Cash
payments from reverse repurchase agreements | (241,597,543 | ) | | | | | | | | |
| Cash
dividends paid to shareholders | (10,703,915 | ) | (21,167,647 | ) | (22,179,730 | ) | (6,309,582 | ) | (1,966,762 | ) |
| Increase in
bank overdraft | 454,847 | | 336,781 | | 57,279 | | | | | |
| Cash used
for financing activities | (62,727,992 | ) | (66,830,866 | ) | (75,122,451 | ) | (15,309,582 | ) | (3,966,762 | ) |
| Cash Impact from Foreign Exchange
Fluctuations | | | | | | | | | | |
| Cash impact
from foreign exchange fluctuations | 33,128 | | (4,874 | ) | 33,581 | | (24 | ) | | |
| Cash | | | | | | | | | | |
| Net
increase (decrease) in cash | (3,602,169 | ) | 56,512 | | 145,082 | | (86,960 | ) | (68,138 | ) |
| Cash at
beginning of period | 3,625,980 | | 210,305 | | 144,358 | | 118,550 | | 78,103 | |
| Cash at end
of period | $ 23,811 | | $ 266,817 | | $ 289,440 | | $ 31,590 | | $ 9,965 | |
| Cash Flow Information | | | | | | | | | | |
| Cash paid
for interest | $ 832,960 | | $ 1,558,517 | | $ 1,767,834 | | $ 420,814 | | $ 121,659 | |
| Noncash Financing
Activities | | | | | | | | | | |
| Capital
shares issued in reinvestment of dividends paid to shareholders | $ 45,124 | | | | | | | | $ 16,347 | |

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 67

F inancial Highlights BlackRock Core Bond Trust (BHK)

	Six Months Ended February 28, 2009 (Unaudited)
				2007		2006		2005		2004		2003
Per Share Operating
Performance
Net asset
value, beginning of period	$ 12.81	$	13.63	$	13.82	$	14.27	$	15.22	$	14.75	$	14.33
Net
investment income	0.39	1	0.50	1	0.74		0.66		0.78		0.92		0.83
Net
realized and unrealized gain (loss)	(2.20	)	(0.69	)	(0.13	)	0.11		(0.37	)	0.66		0.77
Net
increase (decrease) from investment operations	(1.81	)	(0.19	)	0.61		0.77		0.41		1.58		1.60
Dividends
and distributions from:
Net
investment income 2	(0.39	)	(0.61	)	(0.61	)	(0.93	)	(1.01	)	(0.86	)	(1.00	)
Net
realized gain							(0.29	)	(0.35	)	(0.25	)	(0.18	)
Tax return
of capital			(0.02	)	(0.19	)
Total
dividends and distributions	(0.39	)	(0.63	)	(0.80	)	(1.22	)	(1.36	)	(1.11	)	(1.18	)
Net asset
value, end of period	$ 10.61	$	12.81	$	13.63	$	13.82	$	14.27	$	15.22	$	14.75
Market
price, end of period	$ 10.65	$	11.51	$	12.23	$	12.86	$	13.69	$	14.02	$	13.57
Total Investment Return 3
Based on
net asset value	(13.99	)% 4	(1.00	)% 4	5.04	%	6.20	%	3.18	%	11.79	%	11.76	%
Based on
market price	(3.92	)% 4	(0.87	)% 4	1.29	%	3.07	%	7.46	%	11.93	%	6.62	%
Ratios to Average Net Assets
Total
expenses after fees paid indirectly and excluding interest expense	0.80	% 5	0.89	% 5	0.78	%	0.77	%	0.85	%	0.92	%	0.87	%
Total
expenses after fees paid indirectly	1.19	% 5	2.29	% 5	1.60	%	1.08	%	1.50	%	1.32	%	1.05	%
Total
expenses	1.19	% 5	2.29	% 5	1.60	%	1.08	%	1.50	%	1.32	%	1.05	%
Net
investment income	6.88	% 5	4.55	% 5	5.36	%	4.78	%	5.20	%	6.20	%	5.58	%
Supplemental Data
Net assets,
end of period (000)	$ 286,694	$	346,177	$	368,335	$	373,518	$	385,514	$	411,163	$	398,540
Reverse
repurchase agreements outstanding end of period (000)	$ 55,211	$	107,690	$	103,354	$	3,911	$	86,876	$	102,474	$	91,668
Reverse
repurchase agreements average daily balance (000)	$ 65,529	$	134,784	$	44,786	$	25,340	$	91,130	$	145,094	$	67,591
Portfolio
turnover	166	% 6	598	% 7	122	%	88	%	220	%	398	%	161	%
Asset
coverage, end of period per $1,000	$ 6,193	$	4,215	$	4,564	$	96,502	$	5,438	$	5,012	$	5,348

1	Based on average shares outstanding.
2	A portion of the distribution may be deemed a tax return
of capital or net realized gain.
3	Total investment returns based on market value, which can
be significantly greater or lesser than the net asset value, may result in
substantially different returns. Total investment returns exclude the effects
of sales charges.
4	Aggregate total investment return.
5	Annualized.
6	Includes mortgage dollar roll transactions; excluding
these transactions the portfolio turnover would have been 96%.
7	Includes TBA transactions.
Excluding these transactions, the portfolio turnover would have been 337%.

See Notes to Financial Statements.

68 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Financial Highlights BlackRock Corporate High Yield Fund V, Inc. (HYV)

| | Six
Months Ended February 28, 2009 (Unaudited) | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 | | |
| Per Share Operating
Performance | | | | | | | | | | | | |
| Net asset
value, beginning of period | $ 11.94 | $ | 13.83 | $ | 14.10 | $ | 15.19 | $ | 16.15 | $ | 14.90 | |
| Net
investment income 1 | 0.54 | | 1.18 | | 1.20 | | 1.22 | | 1.47 | | 1.67 | |
| Net
realized and unrealized gain (loss) | (4.95 | ) | (1.85 | ) | (0.33 | ) | (0.50 | ) | 0.19 | | 1.27 | |
| Net
increase (decrease) from investment operations | (4.41 | ) | (0.67 | ) | 0.87 | | 0.72 | | 1.66 | | 2.94 | |
| Dividends
and distributions from: | | | | | | | | | | | | |
| Net
investment income | (0.64 | ) | (1.17 | ) | (1.14 | ) | (1.25 | ) | (1.64 | ) | (1.63 | ) |
| Net
realized gain | | | (0.05 | ) | | | (0.56 | ) | (0.98 | ) | (0.06 | ) |
| Total
dividends and distributions | (0.64 | ) | (1.22 | ) | (1.14 | ) | (1.81 | ) | (2.62 | ) | (1.69 | ) |
| Net asset
value, end of period | $ 6.89 | $ | 11.94 | $ | 13.83 | $ | 14.10 | $ | 15.19 | $ | 16.15 | |
| Market
price, end of period | $ 6.21 | $ | 10.15 | $ | 12.24 | $ | 12.81 | $ | 15.04 | $ | 15.44 | |
| Total Investment
Return 2 | | | | | | | | | | | | |
| Based on
net asset value | (36.32 | )% 3 | (3.99 | )% | 6.76 | % | 6.37 | % | 11.03 | % | 20.92 | % 4 |
| Based on
market price | (32.48 | )% 3 | (7.78 | )% | 4.00 | % | (2.40 | )% | 14.99 | % | 19.04 | % |
| Ratios to Average Net
Assets | | | | | | | | | | | | |
| Total
expenses after waiver and fees paid indirectly and excluding interest expense | 0.95 | % 5 | 0.97 | % | 0.99 | % | 0.98 | % | 0.97 | % | 0.97 | % |
| Total
expenses after waiver and fees paid indirectly | 1.83 | % 5 | 2.11 | % | 3.20 | % | 2.87 | % | 1.99 | % | 1.46 | % |
| Total
expenses | 1.83 | % 5 | 2.11 | % | 3.20 | % | 2.87 | % | 1.99 | % | 1.46 | % |
| Net
investment income | 10.29 | % 5 | 9.16 | % | 8.23 | % | 8.49 | % | 9.38 | % | 10.52 | % |
| Supplemental Data | | | | | | | | | | | | |
| Net assets,
end of period (000) | $ 227,050 | $ | 393,389 | $ | 455,710 | $ | 464,453 | $ | 500,303 | $ | 528,498 | |
| Amount of
loan outstanding, end of period (000) | $ 48,700 | $ | 94,700 | $ | 127,700 | $ | 200,100 | $ | 188,500 | $ | 199,700 | |
| Average
amount of loan outstanding during the period (000) | $ 75,910 | $ | 106,140 | $ | 188,373 | $ | 183,484 | $ | 184,650 | $ | 180,502 | |
| Portfolio
turnover | 23 | % | 46 | % | 51 | % | 64 | % | 48 | % | 82 | % |
| Asset
coverage, end of period per $1,000 | $ 5,662 | $ | 5,154 | $ | 4,569 | $ | 3,321 | $ | 3,654 | $ | 3,646 | |

1	Based on average shares outstanding.
2	Total investment returns based on market value, which can
be significantly greater or lesser than the net asset value, may result in
substantially different returns. Total investment returns exclude the effects
of sales charges.
3	Aggregate total investment return.
4	The previous investment advisor reimbursed the Trust for
the difference in value of unregistered securities sold by the Trust and the
same security of the issuer that had been registered for resale, which had no
impact on the total investment return.
5	Annualized.

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	69

Financial Highlights BlackRock Corporate High Yield Fund VI, Inc. (HYT)

| | Six
Months Ended February 28, 2009 (Unaudited) | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 | | |
| Per Share Operating
Performance | | | | | | | | | | | | |
| Net asset
value, beginning of period | $ 11.89 | $ | 13.81 | $ | 14.12 | $ | 15.08 | $ | 15.71 | $ | 14.39 | |
| Net
investment income | 0.53 | 1 | 1.16 | 1 | 1.18 | 1 | 1.16 | 1 | 1.37 | 1 | 1.50 | |
| Net
realized and unrealized gain (loss) | (4.90 | ) | (1.87 | ) | (0.39 | ) | (0.49 | ) | 0.19 | | 1.27 | |
| Net increase
(decrease) from investment operations | (4.37 | ) | (0.71 | ) | 0.79 | | 0.67 | | 1.56 | | 2.77 | |
| Dividends
and distributions from: | | | | | | | | | | | | |
| Net
investment income | (0.63 | ) | (1.21 | ) | (1.10 | ) | (1.17 | ) | (1.49 | ) | (1.43 | ) |
| Net
realized gain | | | | | | | (0.46 | ) | (0.70 | ) | (0.02 | ) |
| Total
dividends and distributions | (0.63 | ) | (1.21 | ) | (1.10 | ) | (1.63 | ) | (2.19 | ) | (1.45 | ) |
| Net asset
value, end of period | $ 6.89 | $ | 11.89 | $ | 13.81 | $ | 14.12 | $ | 15.08 | $ | 15.71 | |
| Market
price, end of period | $ 6.30 | $ | 10.14 | $ | 12.15 | $ | 12.48 | $ | 14.32 | $ | 14.52 | |
| Total Investment
Return 2 | | | | | | | | | | | | |
| Based on net asset value | (36.23 | )% 3 | (4.30 | )% | 6.29 | % | 6.29 | % | 11.28 | % | 20.70 | % |
| Based on market price | (31.63 | )% 3 | (7.24 | )% | 5.80 | % | (1.07 | )% | 14.34 | % | 17.95 | % |
| Ratios to Average Net
Assets | | | | | | | | | | | | |
| Total
expenses after waiver and fees paid indirectly and excluding interest expense | 1.37 | % 4 | 1.10 | % | 1.12 | % | 1.11 | % | 1.11 | % | 1.09 | % |
| Total
expenses after waiver and fees paid indirectly | 2.56 | % 4 | 2.24 | % | 3.35 | % | 2.89 | % | 2.09 | % | 1.56 | % |
| Total
expenses | 2.56 | % 4 | 2.24 | % | 3.35 | % | 2.89 | % | 2.09 | % | 1.57 | % |
| Net
investment income | 12.99 | % 4 | 9.02 | % | 8.03 | % | 8.11 | % | 8.91 | % | 9.76 | % |
| Supplemental Data | | | | | | | | | | | | |
| Net assets,
end of period (000) | $ 243,221 | $ | 419,502 | $ | 487,251 | $ | 498,096 | $ | 532,031 | $ | 554,390 | |
| Amount of
loan outstanding, end of period (000) | $ 57,900 | $ | 110,900 | $ | 135,900 | $ | 216,200 | $ | 185,200 | $ | 207,100 | |
| Average
amount of loan outstanding during the period (000) | $ 86,027 | $ | 113,996 | $ | 202,705 | $ | 184,070 | $ | 188,044 | $ | 178,605 | |
| Portfolio
turnover | 21 | % | 45 | % | 51 | % | 62 | % | 48 | % | 81 | % |
| Asset
coverage, end of period per $1,000 | $ 5,201 | $ | 4,783 | $ | 4,585 | $ | 3,304 | $ | 3,873 | $ | 3,677 | |

1	Based on average shares outstanding.
2	Total investment returns based on market value, which can
be significantly greater or lesser than the net asset value, may result in
substantially different returns. Total investment returns exclude the effects
of sales charges.
3	Aggregate total investment return.
4	Annualized.

See Notes to Financial Statements. — 70	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Financial Highlights BlackRock High Income Shares (HIS)

| | Six
Months Ended February 28, 2009 (Unaudited) | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | 2007 | | 2006 | | 2005 | | 2004 1 | | 2003 1 | | |
| Per Share Operating
Performance | | | | | | | | | | | | | | |
| Net asset
value, beginning of period | $ 2.23 | $ | 2.47 | $ | 2.68 | $ | 2.61 | $ | 2.87 | $ | 2.86 | $ | 2.42 | |
| Net
investment income | 0.10 | 2 | 0.15 | 2 | 0.24 | | 0.22 | | 0.24 | | 0.28 | 3 | 0.32 | 3 |
| Net
realized and unrealized gain (loss) | (0.86 | ) | (0.26 | ) | (0.21 | ) | 0.08 | | (0.23 | ) | 0.03 | | 0.40 | |
| Net
increase (decrease) from investment operations | (0.76 | ) | (0.11 | ) | 0.03 | | 0.30 | | 0.01 | | 0.31 | | 0.72 | |
| Dividends
to shareholders from net investment income | (0.12 | ) | (0.13 | ) | (0.24 | ) | (0.23 | ) | (0.27 | ) | (0.30 | ) | (0.28 | ) |
| Net asset
value, end of period | $ 1.35 | $ | 2.23 | $ | 2.47 | $ | 2.68 | $ | 2.61 | $ | 2.87 | $ | 2.86 | |
| Market
price, end of period | $ 1.19 | $ | 1.88 | $ | 2.14 | $ | 2.55 | $ | 2.33 | $ | 2.90 | $ | 2.87 | |
| Total Investment
Return 4 | | | | | | | | | | | | | | |
| Based on
net asset value | (33.50 | )% 5 | (4.00 | )% 5 | 1.58 | % | 12.32 | % | 0.43 | % | 11.46 | % | 31.10 | % |
| Based on
market price | (30.47 | )% 5 | (6.59 | )% 5 | (7.51 | )% | 19.70 | % | (11.28 | )% | 12.24 | % | 37.23 | % |
| Ratios to Average Net
Assets | | | | | | | | | | | | | | |
| Total
expenses after waiver and fees paid indirectly and excluding interest expense | 1.45 | % 6 | 1.05 | % 6 | 1.27 | % | 1.34 | % | 1.37 | % | 1.39 | % | 1.46 | % |
| Total
expenses after waiver and fees paid indirectly | 2.39 | % 6 | 1.98 | % 6 | 3.55 | % | 3.77 | % | 3.04 | % | 2.23 | % | 2.21 | % |
| Total
expenses | 2.39 | % 6 | 1.98 | % 6 | 3.56 | % | 3.78 | % | 3.04 | % | 2.23 | % | 2.21 | % |
| Net
investment income | 12.46 | % 6 | 9.52 | % 6 | 8.89 | % | 8.42 | % | 8.82 | % | 9.70 | % | 11.99 | % |
| Supplemental Data | | | | | | | | | | | | | | |
| Net assets,
end of period (000) | $ 73,975 | $ | 121,808 | $ | 135,098 | $ | 146,538 | $ | 142,457 | $ | 155,298 | $ | 154,298 | |
| Loan
outstanding, end of period (000) | $ 18,000 | $ | 27,000 | $ | 46,000 | $ | 62,000 | $ | 66,000 | $ | 69,000 | $ | 68,000 | |
| Average
loan outstanding during the period (000) | $ 24,724 | $ | 27,069 | $ | 55,868 | $ | 62,838 | $ | 65,992 | $ | 64,081 | $ | 60,604 | |
| Portfolio
turnover | 19 | % | 25 | % | 69 | % | 83 | % | 115 | % | 56 | % | 93 | % |
| Asset
coverage, end of period per $1,000 | $ 5,110 | $ | 5,512 | $ | 3,937 | $ | 3,364 | $ | 3,158 | $ | 3,251 | $ | 3,269 | |

| 1 | Audited by other Independent Registered Public Accounting
Firm. |
| --- | --- |
| 2 | Based on average shares outstanding. |
| 3 | Net investment income per share has been recalculated in
accordance with Securities and Exchange Commission requirements, with the
exception that end-of-the-year accumulated undistributed/(overdistributed)
net investment income has not been adjusted to reflect current year permanent
differences between financial and tax accounting. |
| 4 | Total investment returns based on market value, which can
be significantly greater or lesser than the net asset value, may result in
substantially different returns. Total investment returns exclude the effects
of sales charges. |
| 5 | Aggregate total investment return. |
| 6 | Annualized. |
| The performance set forth in this table is the financial
data of BlackRock High Income Shares. BlackRock Advisors, LLC began managing
the Trust on March 2, 2005. | |

See Notes to Financial Statements. — SEMI-ANNUAL REPORT	FEBRUARY 28, 2009	71

Financial Highlights BlackRock High Yield Trust (BHY)

| | Six
Months Ended February 28, 2009 (Unaudited) | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | | |
| Per Share Operating
Performance | | | | | | | | | | | | | | |
| Net asset
value, beginning of period | $ 6.84 | $ | 7.91 | $ | 7.85 | $ | 7.48 | $ | 7.95 | $ | 6.96 | $ | 6.13 | |
| Net
investment income | 0.26 | 1 | 0.50 | 1 | 0.63 | | 0.66 | | 0.68 | | 0.92 | | 1.06 | |
| Net
realized and unrealized gain (loss) | (2.46 | ) | (1.06 | ) | 0.04 | | 0.36 | | (0.36 | ) | 1.02 | | 0.89 | |
| Net
increase (decrease) from investment operations | (2.20 | ) | (0.56 | ) | 0.67 | | 1.02 | | 0.32 | | 1.94 | | 1.95 | |
| Dividends
and distributions from: | | | | | | | | | | | | | | |
| Net
investment income | (0.31 | ) 2 | (0.51 | ) | (0.61 | ) | (0.65 | ) | (0.79 | ) | (0.92 | ) | (1.07 | ) |
| Tax return
of capital | | | | | | | | | | | (0.03 | ) | (0.05 | ) |
| Total
dividends and distributions | (0.31 | ) | (0.51 | ) | (0.61 | ) | (0.65 | ) | (0.79 | ) | (0.95 | ) | (1.12 | ) |
| Net asset
value, end of period | $ 4.33 | $ | 6.84 | $ | 7.91 | $ | 7.85 | $ | 7.48 | $ | 7.95 | $ | 6.96 | |
| Market
price, end of period | $ 4.68 | $ | 5.96 | $ | 6.92 | $ | 7.77 | $ | 7.36 | $ | 9.30 | $ | 10.25 | |
| Total Investment
Return 3 | | | | | | | | | | | | | | |
| Based on
net asset value | (32.57 | )% 4 | (6.47 | )% 4 | 9.03 | % | 14.25 | % | 2.85 | % | 26.24 | % | 27.75 | % |
| Based on
market price | (16.36 | )% 4 | (6.85 | )% 4 | (3.63 | )% | 14.93 | % | (13.49 | )% | 0.28 | % | 32.87 | % |
| Ratios to Average Net
Assets | | | | | | | | | | | | | | |
| Total
expenses after waiver and fees paid indirectly and excluding interest expense | 2.18 | % 5 | 1.77 | % 5 | 2.10 | % | 2.19 | % | 2.10 | % | 1.96 | % | 2.22 | % |
| Total
expenses after waiver and fees paid indirectly | 2.92 | % 5 | 2.61 | % 5 | 4.14 | % | 4.49 | % | 3.51 | % | 2.68 | % | 3.07 | % |
| Total
expenses | 2.92 | % 5 | 2.61 | % 5 | 4.16 | % | 4.50 | % | 3.52 | % | 2.69 | % | 3.07 | % |
| Net
investment income | 10.45 | % 5 | 8.34 | % 5 | 7.84 | % | 8.74 | % | 8.71 | % | 12.16 | % | 16.37 | % |
| Supplemental Data | | | | | | | | | | | | | | |
| Net assets,
end of period (000) | $ 27,804 | $ | 43,897 | $ | 50,782 | $ | 50,385 | $ | 47,924 | $ | 50,914 | $ | 44,438 | |
| Loan
outstanding, end of period (000) | $ 4,250 | $ | 6,250 | $ | 9,250 | $ | 20,250 | $ | 20,750 | $ | 19,250 | $ | 19,250 | |
| Average
loan outstanding during the period (000) | $ 6,637 | $ | 7,443 | $ | 17,710 | $ | 20,621 | $ | 20,425 | $ | 19,250 | $ | 19,250 | |
| Portfolio
turnover | 19 | % | 34 | % | 69 | % | 85 | % | 102 | % | 156 | % | 30 | % |
| Asset
coverage, end of period per $1,000 | $ 7,542 | $ | 8,023 | $ | 6,490 | $ | 3,488 | $ | 3,310 | $ | 3,645 | $ | 3,308 | |

1	Based on average shares outstanding.
2	A portion of the distribution may be deemed a tax return
of capital or net realized gain.
3	Total investment returns based on market value, which can
be significantly greater or lesser than the net asset value, may result in
substantially different returns. Total investment returns exclude the effects
of sales charges.
4	Aggregate total investment return.
5	Annualized.

See Notes to Financial Statements. — 72	SEMI-ANNUAL REPORT	FEBRUARY 28, 2009

Financial Highlights BlackRock Income Opportunity Trust, Inc. (BNA)

| | Six
Months Ended February 28, 2009 (Unaudited) | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | | |
| Per Share Operating Performance | | | | | | | | | | | | | | |
| Net asset
value, beginning of period | $ 10.35 | $ | 11.02 | $ | 11.17 | $ | 11.56 | $ | 12.38 | $ | 11.93 | $ | 11.83 | |
| Net
investment income | 0.30 1 | | 0.53 1 | | 0.62 | | 0.57 | | 0.72 | | 0.76 | | 0.84 | |
| Net
realized and unrealized gain (loss) | (1.64 | ) | (0.69 | ) | (0.11 | ) | 0.01 | | (0.45 | ) | 0.53 | | 0.31 | |
| Net
increase (decrease) from investment operations | (1.34 | ) | (0.16 | ) | 0.51 | | 0.58 | | 0.27 | | 1.29 | | 1.15 | |
| Dividends
and distributions from: | | | | | | | | | | | | | | |
| Net
investment income 2 | (0.31 | ) | (0.51 | ) | (0.61 | ) | (0.65 | ) | (0.81 | ) | (0.84 | ) | (0.81 | ) |
| Net
realized gain | | | | | | | (0.26 | ) | (0.28 | ) | | | (0.24 | ) |
| Tax return
of capital | | | | | (0.05 | ) | (0.06 | ) | | | | | | |
| Total
dividends and distributions | (0.31 | ) | (0.51 | ) | (0.66 | ) | (0.97 | ) | (1.09 | ) | (0.84 | ) | (1.05 | ) |
| Net asset
value, end of period | $ 8.70 | $ | 10.35 | $ | 11.02 | $ | 11.17 | $ | 11.56 | $ | 12.38 | $ | 11.93 | |
| Market
price, end of period | $ 8.75 | $ | 9.82 | $ | 10.19 | $ | 10.58 | $ | 10.90 | $ | 11.38 | $ | 10.95 | |
| Total Investment Return 3 | | | | | | | | | | | | | | |
| Based on
net asset value | (12.79 | )% 4 | (1.07 | )% 4 | 5.11 | % | 5.76 | % | 2.95 | % | 11.90 | % | 10.92 | % |
| Based on
market price | (7.56 | )% 4 | 1.51 | % 4 | 2.62 | % | 6.27 | % | 5.53 | % | 12.04 | % | 14.71 | % |
| Ratios to Average Net Assets | | | | | | | | | | | | | | |
| Total
expenses after fees paid indirectly and excluding interest expense | 0.83 | % 5 | 0.83 | % 5 | 0.87 | % | 0.89 | % | 0.87 | % | 0.84 | % | 0.89 | % |
| Total
expenses after fees paid indirectly | 1.00 | % 5 | 2.25 | % 5 | 2.00 | % | 1.61 | % | 1.72 | % | 1.11 | % | 1.29 | % |
| Total
expenses before fees paid indirectly | 1.00 | % 5 | 2.25 | % 5 | 2.01 | % | 1.61 | % | 1.72 | % | 1.11 | % | 1.29 | % |
| Total
expenses | 1.00 | % 5 | 2.25 | % 5 | 2.01 | % | 1.61 | % | 1.72 | % | 1.11 | % | 1.29 | % |
| Net
investment income | 6.58 | % 5 | 5.89 | % 5 | 5.68 | % | 5.11 | % | 5.97 | % | 6.29 | % | 6.99 | % |
| Supplemental Data | | | | | | | | | | | | | | |
| Net assets,
end of period (000) | $ 299,589 | $ | 356,456 | $ | 379,605 | $ | 384,850 | $ | 398,078 | $ | 426,643 | $ | 410,981 | |
| Reverse
repurchase agreements outstanding, end of period (000) | $ 35,556 | $ | 100,740 | $ | 105,262 | $ | 34,326 | $ | 120,179 | $ | 94,644 | $ | 103,378 | |
| Reverse
repurchase agreements average daily balance (000) | $ 39,297 | $ | 131,462 | $ | 68,241 | $ | 59,691 | $ | 122,457 | $ | 97,264 | $ | 136,172 | |
| Portfolio
turnover | 207 | % 6 | 441 | % 7 | 196 | % | 131 | % | 396 | % | 300 | % | 46 | % |
| Asset
coverage, end of period per $1,000 | $ 9,426 | $ | 4,538 | $ | 4,606 | $ | 12,212 | $ | 4,312 | $ | 5,508 | $ | 4,976 | |

1	Based on average shares outstanding.
2	A portion of the distribution may be deemed a tax return
of capital or net realized gain.
3	Total investment returns based on market value, which can
be significantly greater or lesser than the net asset value, may result in
substantially different returns. Total investment returns exclude the effects
of sales charges.
4	Aggregate total investment return.
5	Annualized.
6	Includes mortgage dollar roll transactions. Excluding
these transactions the portfolio turnover would have been 92%.
7	Includes TBA transactions. Excluding these transactions,
the portfolio turnover would have been 168%.

| See Notes to Financial Statements. — SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 | 73 |
| --- | --- | --- |

Financial Highlights BlackRock Income Trust, Inc. (BKT)

| | Six
Months Ended February 28, 2009 (Unaudited) | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | | |
| Per Share Operating Performance | | | | | | | | | | | | | | |
| Net asset
value, beginning of period | $ 6.94 | $ | 6.53 | $ | 6.48 | $ | 6.54 | $ | 6.95 | $ | 7.21 | $ | 8.13 | |
| Net
investment income | 0.16 | 1 | 0.26 | 1 | 0.30 | | 0.32 | | 0.44 | | 0.51 | | 0.61 | |
| Net
realized and unrealized gain (loss) | (0.31 | ) | 0.40 | | 0.12 | | 0.05 | | (0.30 | ) | (0.16 | ) | (0.52 | ) |
| Net
increase (decrease) from investment operations | (0.15 | ) | 0.66 | | 0.42 | | 0.37 | | 0.14 | | 0.35 | | 0.09 | |
| Dividends
and distributions from: | | | | | | | | | | | | | | |
| Net
investment income 2 | (0.14 | ) | (0.25 | ) | (0.29 | ) | (0.34 | ) | (0.48 | ) | (0.61 | ) | (1.01 | ) |
| Tax return
of capital | | | | | (0.08 | ) | (0.09 | ) | (0.07 | ) | | | | |
| Total
dividends and distributions | (0.14 | ) | (0.25 | ) | (0.37 | ) | (0.43 | ) | (0.55 | ) | (0.61 | ) | (1.01 | ) |
| Net asset
value, end of period | $ 6.65 | $ | 6.94 | $ | 6.53 | $ | 6.48 | $ | 6.54 | $ | 6.95 | $ | 7.21 | |
| Market
price, end of period | $ 5.92 | $ | 6.07 | $ | 5.81 | $ | 6.07 | $ | 5.90 | $ | 7.50 | $ | 7.71 | |
| Total Investment Return 3 | | | | | | | | | | | | | | |
| Based on
net asset value | (1.75 | )% 4 | 10.82 | % 4 | 7.06 | % | 6.06 | % | 2.12 | % | 5.01 | % | 1.20 | % |
| Based on
market price | 0.00 | % 4 | 8.94 | % 4 | 1.69 | % | 10.18 | % | (14.63 | )% | 5.97 | % | 15.41 | % |
| Ratios to Average Net Assets | | | | | | | | | | | | | | |
| Total
expenses after fees paid indirectly and excluding interest expense | 0.91 | % 5 | 0.91 | % 5 | 0.98 | % | 1.00 | % | 0.99 | % | 0.97 | % | 1.02 | % |
| Total
expenses after waiver and fees paid indirectly | 1.13 | % 5 | 1.63 | % 5 | 2.76 | % | 2.84 | % | 2.79 | % | 1.37 | % | 1.36 | % |
| Total
expenses before waiver and fees paid indirectly | 1.13 | % 5 | 1.63 | % 5 | 2.77 | % | 2.85 | % | 2.80 | % | 1.37 | % | 1.36 | % |
| Total
expenses | 1.14 | % 5 | 1.63 | % 5 | 2.77 | % | 2.85 | % | 2.80 | % | 1.37 | % | 1.36 | % |
| Net
investment income | 4.90 | % 5 | 4.67 | % 5 | 4.60 | % | 4.92 | % | 6.54 | % | 7.13 | % | 8.18 | % |
| Supplemental Data | | | | | | | | | | | | | | |
| Net assets,
end of period (000) | $ 424,967 | $ | 444,054 | $ | 417,651 | $ | 414,460 | $ | 418,390 | $ | 442,635 | $ | 457,301 | |
| Reverse
repurchase agreements outstanding, end of period (000) | | | | $ | 33,895 | $ | 70,691 | $ | 149,558 | $ | 223,736 | $ | 121,767 | |
| Reverse
repurchase agreements average daily balance (000) | $ 836 | $ | 61,777 | $ | 93,325 | $ | 104,393 | $ | 180,553 | $ | 158,278 | $ | 135,804 | |
| Portfolio
turnover | 316 | % 6 | 263 | % 7 | 250 | % | 80 | % | 60 | % | 120 | % | 64 | % |
| Asset
coverage, end of period per $1,000 | | | | $ | 13,322 | $ | 6,863 | $ | 3,798 | $ | 2,978 | $ | 4,756 | |

1	Based on average shares outstanding.
2	A portion of the distribution may be deemed a tax return
of capital or net realized gain.
3	Total investment returns based on market value, which can
be significantly greater or lesser than the net asset value, may result in
substantially different returns. Total investment returns exclude the effects
of sales charges.
4	Aggregate total investment return.
5	Annualized.
6	Includes mortgage dollar roll transactions. Excluding
these transactions the portfolio turnover would have been 98%.
7	Includes TBA transactions. Excluding these transactions,
the portfolio turnover would have been 0%.

| See Notes to Financial Statements. — 74 | SEMI-ANNUAL REPORT | FEBRUARY
28, 2009 |
| --- | --- | --- |

Financial Highlights BlackRock Strategic Bond Trust (BHD)

| | Six
Months Ended February 28, 2009 (Unaudited) | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | | |
| Per Share Operating Performance | | | | | | | | | | | | | | |
| Net asset
value, beginning of period | $ 12.76 | $ | 13.80 | $ | 13.83 | $ | 13.68 | $ | 15.10 | $ | 15.07 | $ | 12.63 | |
| Net
investment income | 0.44 | 1 | 0.76 1 | | 0.95 | | 0.99 | | 1.10 | | 1.39 | | 1.59 | |
| Net
realized and unrealized gain (loss) | (2.83 | ) | (1.03 | ) | (0.06 | ) | 0.18 | | (1.13 | ) | 0.25 | | 2.34 | |
| Net
increase (decrease) from investment operations | (2.39 | ) | (0.27 | ) | 0.89 | | 1.17 | | (0.03 | ) | 1.64 | | 3.93 | |
| Dividends
and distributions from: | | | | | | | | | | | | | | |
| Net
investment income 2 | (0.46 | ) | (0.77 | ) | (0.92 | ) | (0.98 | ) | (1.12 | ) | (1.61 | ) | (1.49 | ) |
| Tax return
of capital | | | | | | | (0.04 | ) | (0.27 | ) | | | | |
| Total
dividends and distributions | (0.46 | ) | (0.77 | ) | (0.92 | ) | (1.02 | ) | (1.39 | ) | (1.61 | ) | (1.49 | ) |
| Net asset
value, end of period | $ 9.91 | $ | 12.76 | $ | 13.80 | $ | 13.83 | $ | 13.68 | $ | 15.10 | $ | 15.07 | |
| Market
price, end of period | $ 9.23 | $ | 10.85 | $ | 11.88 | $ | 12.85 | $ | 12.45 | $ | 16.70 | $ | 15.27 | |
| Total Investment Return 3 | | | | | | | | | | | | | | |
| Based on
net asset value | (18.21 | )% 4 | (1.19 | )% 4 | 7.26 | % | 9.58 | % | (0.49 | )% | 11.35 | % | 32.55 | % |
| Based on
market price | (10.42 | )% 4 | (2.40 | )% 4 | (0.62 | )% | 11.87 | % | (18.11 | )% | 21.54 | % | 37.36 | % |
| Ratios Based on Average Net Assets | | | | | | | | | | | | | | |
| Total
expenses after fees paid indirectly and excluding interest expense | 0.90 | % 5 | 0.815 | % 5 | 0.87 | % | 0.94 | % | 0.92 | % | 0.89 | % | 1.01 | % |
| Total
expenses after fees paid indirectly | 0.91 | % 5 | 0.82 | % 5 | 1.27 | % | 2.00 | % | 1.87 | % | 1.23 | % | 1.71 | % |
| Total
expenses before fees paid indirectly | 0.91 | % 5 | 0.82 | % 5 | 1.27 | % | 2.25 | % | 2.14 | % | 1.49 | % | 2.01 | % |
| Total
expenses | 1.01 | % 5 | 0.93 | % 5 | 1.45 | % | 2.25 | % | 2.14 | % | 1.49 | % | 2.01 | % |
| Net
investment income | 8.45 | % 5 | 6.85 | % 5 | 6.86 | % | 7.26 | % | 7.58 | % | 9.23 | % | 11.32 | % |
| Supplemental | | | | | | | | | | | | | | |
| Net assets,
end of period (000) | $ 69,937 | $ | 90,092 | $ | 97,410 | $ | 97,614 | $ | 96,546 | $ | 106,433 | $ | 106,045 | |
| Reverse
repurchase agreements outstanding, end of period (000) | | $ | 1,571 | $ | 413 | $ | 14,951 | $ | 31,883 | $ | 13,188 | $ | 45,872 | |
| Reverse
repurchase agreements average daily balance (000) | $ 618 | $ | 391 | $ | 7,240 | $ | 21,104 | $ | 30,406 | $ | 27,562 | $ | 46,036 | |
| Portfolio
turnover | 16 | % | 27 | % | 34 | % | 46 | % | 51 | % | 31 | % | 32 | % |
| Asset
coverage, end of period per $1,000 | | $ | 58,347 | $ | 236,789 | $ | 7,529 | $ | 4,028 | $ | 9,071 | $ | 3,312 | |

1	Based on average shares outstanding.
2	A portion of the distribution may be deemed a tax return
of capital or net realized gain.
3	Total investment returns based on market value, which can
be significantly greater or lesser than the net asset value, may result in
substantially different returns. Total investment returns exclude the effects
of sales charges.
4	Aggregate total investment return.
5	Annualized.

| See Notes to Financial Statements. — SEMI-ANNUAL
REPORT | FEBRUARY 28, 2009 | 75 |
| --- | --- | --- |

Notes to Financial Statements (Unaudited)

Note 1. Organization and Significant Accounting Policies:

BlackRock Core Bond Trust (Core Bond), BlackRock Corporate High Yield V Fund, Inc. (Corporate High Yield V), BlackRock Corporate High Yield VI Fund, Inc. (Corporate High Yield VI), BlackRock High Income Shares (High Income), BlackRock High Yield Trust (High Yield), BlackRock Income Opportunity Trust, Inc. (Income Opportunity), BlackRock Income Trust, Inc. (Income Trust) and BlackRock Strategic Bond Trust (Strategic Bond) (the Trusts or individually as the Trust) are registered as diversified, closed-end management investment companies under the Investment Company Act of 1940 (the 1940 Act), as amended. Corporate High Yield V, Corporate High Yield VI, Income Opportunity and Income Trust are organized as Maryland corporations. Core Bond, High Yield and Strategic Bond are organized as Delaware statutory trusts. High Income is organized as a Massachusetts business trust. The Trusts financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require the use of management accruals and estimates. Actual results may differ from these estimates. Core Bond, High Income, High Yield, Income Opportunity, Income Trust and Strategic Bond recently changed their fiscal year end to August 31. The Trusts determine and make available for publication the net asset value of their Common Shares on a daily basis.

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

Valuation of Securities: The Trusts value their bond investments on the basis of last available bid prices or current market quotations provided by dealers or pricing services selected under the supervision of each Trusts Board of Trustees/Directors (the Board). Floating rate loan interests are valued at the mean between the last available bid prices from one or more brokers or dealers as obtained from pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures based on valuation technology commonly employed in the market for such investments. The fair value of asset-backed and mortgage-backed securities are estimated based on models that consider the estimated cash flows of each tranche of the entity, establishes a benchmark yield and develops an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. Financial futures contracts traded on exchanges are valued at their last sale price. Swap agreements are valued utilizing quotes received daily by the Trusts pricing service or through brokers which are derived using daily swap curves and trades of underlying securities. TBA commitments are valued at the current market value of the underlying securities. Short-term securities with maturities less than 60 days are valued at amortized cost, which approximates fair value. Investments in open-end investment companies are valued at net asset value each business day. The Trusts value their investments in Cash Sweep Series and Money Market Series, each of the BlackRock Liquidity Series, LLC, at fair value, which is ordinarily based upon their pro-rata ownership in the net assets of the underlying fund.

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

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

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment, the investment will be valued by a method approved by the Boards as reflecting fair value (Fair Value Assets). When determining the price for Fair Value Assets, the investment advisor and/or sub-advisor seeks to determine the price that each Trust might reasonably expect to receive from the current sale of that asset in an arms-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the respective Board or a committee thereof.

Generally, trading in foreign securities is substantially completed each day at various times prior to the close of business on the New York Stock Exchange (NYSE). The values of such securities used in computing the net assets of each Trust are determined as of such times. Foreign currency exchange rates will be determined as of the close of business on the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of business on the NYSE that may not be reflected in the computation of each Trusts net assets. If events (for example, a company announcement, market volatility or a natural disaster) occur during such periods that are expected to materially affect the value of such securities, those securities will be valued at their fair value as determined in good faith by the Board or by the investment advisor using a pricing service and/or procedures approved by the Board. Foreign currency exchange contracts and forward foreign currency exchange contracts are valued at the mean between the bid and ask prices. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.

Derivative Financial Instruments: The Trusts may engage in various portfolio investment strategies both to increase the return of the Trusts and to hedge, or protect, their exposure to interest rate movements and movements in the

76 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Notes to Financial Statements (continued)

securities markets. Losses may arise if the value of the contract decreases due to an unfavorable change in the price of the underlying security, or if the counterparty does not perform under the contract.

| | Financial futures contracts The
Trusts may purchase or sell financial futures contracts and options on
financial futures contracts for investment purposes or to manage its interest
rate risk. Futures contracts are contracts for delayed delivery of securities
at a specific future date and at a specific price or yield. Pursuant to the
contract, the Trust agrees to receive from or pay to the broker an amount of
cash equal to the daily fluctuation in value of the contract. Such receipts
or payments are known as margin variation and are recognized by the Trust as
unrealized gains or losses. When the contract is closed, the Trust records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed. The use of
futures transactions involves the risk of an imperfect correlation in the
movements in the price of futures contracts, interest rates and the
underlying assets, and the possible inability of counterparties to meet the
terms of their contracts. |
| --- | --- |
| | Forward currency contracts A
forward currency contract is an agreement between two parties to buy and sell
a currency at a set exchange rate on a future date. The Trusts may enter into
foreign currency exchange contracts as a hedge against either specific
transactions or portfolio positions. Foreign currency exchange contracts,
when used by the Trusts, help to manage the overall exposure to the foreign
currency backing some of the investments held by the Trusts. The contract is
marked-to-market daily and the change in market value is recorded by the
Trusts as an unrealized gain or loss. When the contract is closed, the Trusts
record a realized gain or loss equal to the difference between the value at
the time it was opened and the value at the time it was closed. The use of
forward foreign currency contracts involves the risk that counterparties may
not meet the terms of the agreement and market risk of unanticipated
movements in the value of a foreign currency relative to the US dollar. |
| | Options The Trusts may purchase
and write call and put options. A call option gives the purchaser of the
option the right (but not the obligation) to buy, and obligates the seller to
sell (when the option is exercised), the underlying position at the exercise
price at any time or at a specified time during the option period. A put
option gives the holder the right to sell and obligates the writer to buy the
underlying position at the exercise price at any time or at a specified time
during the option period. |
| | When a Trust purchases (writes)
an option, an amount equal to the premium paid (received) by the Trust is
reflected as an asset and an equivalent liability. The amount of the asset (liability)
is subsequently marked-to-market to reflect the current market value of the
option written. When a security is purchased or sold through an exercise of
an option, the related premium paid (or received) is added to (or deducted
from) the basis of the security acquired or deducted from (or added to) the
proceeds of the security sold. When an option expires (or the Trust enters
into a closing transaction), the Trust realizes a gain or loss on the option
to the extent of the premiums received or paid (or gain or loss to the extent
the cost of the closing transaction exceeds the premium received or paid).
When the Trust writes a call option, such option is covered, meaning that
the Trust holds the underlying security subject to being called by the option
counterparty, or cash in an amount sufficient to cover the obligation. When
the Trust writes a put option, such option is covered by cash in an amount
sufficient to cover the obligation. |
| | In purchasing and writing
options, the Trust bears the market risk of an unfavorable change in the
price of the underlying security or index. Exercise of a written option could
result in the Trust purchasing a security at a price different from the
current market value. The Trust may execute transactions in both listed and
over-the-counter options. Transactions in certain over-the-counter options
may expose the Trust to the risk of default by the counterparty to the
transaction. |
| | Swaps Each Trust may enter into
swap agreements, in which the Trust and a counterparty agree to make periodic
net payments on a specified notional amount. These periodic payments received
or made by the Trusts are recorded in the accompanying Statements of
Operations as realized gains or losses, respectively. Swaps are marked-to-market
daily and changes in value are recorded as unrealized appreciation
(depreciation). When the swap is terminated, the Trusts will record a
realized gain or loss equal to the difference between the proceeds from (or
cost of) the closing transaction and the Trusts basis in the contract, if
any. |
| | Swap transactions involve, to
varying degrees, elements of credit and market risk in excess of the amounts
recognized on the Statement of Assets and Liabilities. Such risks involve the
possibility that there will be no liquid market for these agreements, that
the counterparty to the agreements may default on its obligation to perform
or disagree as to the meaning of the contractual terms in the agreements, and
that there may be unfavorable changes in interest rates and/or market values
associated with these transactions. |
| | Credit default swaps The Trusts
may enter into credit default swaps for investment purposes or to manage
their credit risk. Each Trust enters into credit default agreements to
provide a measure of protection against the default of an issuer (as buyer of
protection) and/or gain credit exposure to an issuer to which it is not
otherwise exposed (as seller of protection). Credit default swaps are
agreements in which one party pays fixed periodic payments to a counterparty
in consideration for a guarantee from the counterparty to make a specific
payment should a negative credit event take place (e.g. bankruptcy, failure
to pay, obligation accelerators, repudiation, moratorium or restructuring). A
Trust may either buy or sell (write) credit default swaps. As a buyer, the
Trust will either receive from the seller an amount equal to the notional
amount of the swap and deliver the referenced security or underlying
securities comprising of an index or receive a net settlement of cash equal
to the notional amount of the swap less the recovery value of the security or
underlying securities comprising of an index. As a seller (writer), the Trust
will either pay the buyer an amount equal to the notional amount of the swap
and take delivery of the referenced security or underlying securities
comprising of an index or pay a net settlement of cash equal to the notional
amount of the swap less the |

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 77

Notes to Financial Statements (continued)

| | recovery value of the security or
underlying securities comprising of an index. In the event of default by the
counterparty, the Trust may recover amounts paid under the agreement either
partially or in total by offsetting any payables and/or receivables with
collateral held or pledged. |
| --- | --- |
| | Interest rate swaps The Trusts
may enter into interest rate swaps for investment purposes or to manage their
interest rate risk. Interest rate swaps are agreements in which one party
pays a floating rate of interest on a notional principal amount and receives
a fixed rate of interest on the same notional principal amount for a
specified period of time. Alternatively, a party may pay a fixed rate and
receive a floating rate. In more complex swaps, the notional principal amount
may decline (or amortize) over time. |
| | Total return swaps The Trusts
may enter into total return swaps for investment purposes or to manage their
interest rate risk. Total return swaps are agreements in which one party
commits to pay interest in exchange for a market-linked return. To the extent
the total return of the security or index underlying the transaction exceeds
or falls short of the offsetting interest rate obligation, the Trust will
receive a payment from or make a payment to the counterparty. |
| | Swaptions Swap options
(swaptions) are similar to options on securities except that instead of
selling or purchasing the right to buy or sell a security, the writer or
purchaser of the swap option is granting or buying the right to enter into a
previously agreed upon interest rate swap agreement at any time before the
expiration of the option. |

Capital Trusts: These securities are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured as either fixed or adjustable coupon securities that can have either a perpetual or stated maturity date. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market. Payments on these securities are treated as interest rather than dividends for federal income tax purposes. These securities can have a rating that is slightly below that of the issuing companys senior debt securities.

Floating Rate Loans: The Trusts invest in floating rate loans, which are generally non-investment grade, made by banks, other financial institutions and privately and publicly offered corporations. Floating rate loans are senior in the debt structure of a corporation. Floating rate loans generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally (i) the lending rate offered by one or more European banks, such as LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by one or more U.S. banks or (iii) the certificate of deposit rate. The Trusts consider these investments to be investments in debt securities for purposes of their investment policies.

The Trusts earn and/or pay facility and other fees on floating rate loans. Other fees earned/paid include commitment, amendment, consent, commissions and prepayment penalty fees. Facility, amendment and consent fees are typically amortized as premium and/or accreted as discount over the term of the loan. Commitment, commission and various other fees are recorded as income or expense. Prepayment penalty fees are recognized on the accrual basis. When each Trust buys a floating rate loan it may receive a facility fee and when it sells a floating rate loan it may pay a facility fee. On an ongoing basis, the Trusts may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a floating rate loan. In certain circumstances, the Trusts may receive a prepayment penalty fee upon the prepayment of a floating rate loan by a borrower. Other fees received by the Trusts may include covenant waiver fees and covenant modification fees.

The Trusts may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.

Floating rate loans are usually freely callable at the issuers option. The Trusts may invest in such loans in the form of participations in loans (Participations) and assignments of all or a portion of loans from third parties. Participations typically will result in the Trusts having a contractual relationship only with the lender, not with the borrower. Each Trust will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower.

In connection with purchasing Participations, the Trusts generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loans, nor any rights of offset against the borrower, and the Trusts may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, the Trusts will assume the credit risk of both the borrower and the lender that is selling the Participation. The Trusts investments in loan participation interests involve the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, the Trusts may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower.

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

78 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Notes to Financial Statements (continued)

backed security at a premium, a faster than anticipated prepayment rate could result in a loss of principal to the extent of the premium paid.

Certain Trusts may purchase in the secondary market certain mortgage pass-through securities. There are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities that they issue. For example, mortgage-related securities guaranteed by the Government National Mortgage Association (GNMA) are guaranteed as to the timely payment of principal and interest by GNMA and such guarantee is backed by the full faith and credit of the United States. However, mortgage-related securities issued by the Federal National Mortgage Association (FNMA) include FNMA guaranteed Mortgage Pass-Through Certificates which are solely the obligations of the FNMA, are not backed by or entitled to the full faith and credit of the United States and are supported by the right of the issuer to borrow from the Treasury.

Certain Trusts invest a significant portion of its assets in securities backed by commercial or residential mortgage loans or in issuers that hold mortgage and other asset-backed securities. Please see the Schedules of Investments for these securities. Changes in economic conditions, including delinquencies and/or defaults on assets underlying these securities, can affect the value, income and/or liquidity of such positions.

Borrowed Bond Agreements: In a borrowed bond agreement, a Trust borrows securities from a third party, with the commitment that they will be returned to the lender on an agreed-upon date. Borrowed bond agreements are primarily entered into to settle short positions. In a borrowed bond agreement, the Trusts prime broker or third party broker takes possession of the underlying collateral securities or cash to settle such short positions. The value of the underlying collateral securities or cash approximates the principal amount of the borrowed bond transaction, including accrued interest. To the extent that borrowed bond transactions exceed one business day, the value of the collateral with any counterparty is marked to market on a daily basis to ensure the adequacy of the collateral. If the lender defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the lender of the security, realization of the collateral by the Trust may be delayed or limited.

Interest Rate Floors: Interest rate floors are similar to interest rate swaps, except that one party agrees to pay a fee, while the other party pays the deficiency, if any, of a floating rate under a specified fixed or floating rate.

Interest rate floors are used by the Trusts to both manage the duration of the portfolios and their exposure to changes in short-term interest rates. The Trusts leverage provides extra income in a period of falling rates.

Selling floors reduce some of that extra income by partially monetizing it as an up front payment that the Trusts receive.

Transaction fees paid or received by the Trusts are recognized as assets or liabilities and amortized or accreted into interest expense or income over the life of the interest rate floor. The asset or liability is subsequently adjusted to the current market value of the interest rate floor purchased or sold. Changes in the value of the interest rate floor are recognized as unrealized gains and losses.

Mortgage Dollar Roll Transactions: The Trusts may sell mortgage-backed securities and simultaneously contract to repurchase substantially similar (same type, coupon and maturity) securities on a specific future date at an agreed upon price. Pools of mortgage securities are used to collateralize mortgage dollar roll transactions and may have different prepayment histories than those sold. During the period between the sale and the repurchase, the Trusts will not be entitled to receive interest and principal payments on the securities sold. Proceeds of the sale will be invested in additional instruments for the Trusts, and the income from these investments will generate income for the Trusts. The Trusts will account for dollar roll transactions as purchases and sales and realize gains and losses on these transactions.

Mortgage dollar rolls involve the risk that the market value of the securities that the Trusts are required to purchase may decline below the agreed upon repurchase price of those securities. If investment performance of securities purchased with proceeds from these transactions does not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will adversely impact the investment performance of the Trusts.

Reverse Repurchase Agreements: The Trusts may enter into reverse repurchase agreements with qualified third party broker-dealers. In a reverse repurchase agreement, the Trust sells securities to a bank or broker-dealer and agrees to repurchase the securities at a mutually agreed upon date and price. Interest on the value of the reverse repurchase agreements issued and outstanding is based upon competitive market rates determined at the time of issuance. The Trusts may utilize reverse repurchase agreements when it is anticipated that the interest income to be earned from the investment of the proceeds of the transaction is greater than the interest expense of the transaction. Reverse repurchase agreements involve leverage risk and also the risk that the market value of the securities that the Trust is obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Trusts use of the proceeds of the agreement may be restricted pending determination by the other party, or its trustee or receiver, whether to enforce the Trusts obligation to repurchase the securities.

TBA Commitments: The Trusts may enter into to-be-announced (TBA) commitments to purchase or sell securities for a fixed price at a future date. TBA commitments are considered securities in themselves, and involve a risk of loss if the value of the security to be purchased or sold declines or increases prior to settlement date, which is in addition to the risk of decline in the value of the Trusts other assets.

Treasury Roll Transactions: A treasury roll transaction involves the sale of a Treasury security, with an agreement to repurchase the same security at an agreed upon price and date. Treasury rolls constitutes a borrowing (not treated as purchase and sales) and the difference between the sale and repurchase prices represents interest expense at an agreed upon rate.

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 79

Notes to Financial Statements (continued)

Whether such a transaction produces a positive impact on performance depends upon whether the income and gains on the securities purchased with the proceeds received from the sale of the security exceeds the interest expense incurred by the Trust. Treasury rolls are not considered purchases and sales and any gains or losses incurred on the treasury rolls will be deferred until the treasury securities are disposed.

Treasury roll transactions involve the risk that the market value of the securities that the Trust is required to purchase may decline below the agreed upon repurchase price of those securities. If investment performance of securities purchased with proceeds from these transactions does not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will adversely impact the investment performance of the Trust.

Zero-Coupon Bonds: The Trusts 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.

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

Each Trust reports foreign currency related transactions as components of realized gains for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.

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

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (SEC) require that the Trusts segregate assets in connection with certain investments (e.g., dollar rolls, TBAs beyond normal settlement, options, written swaptions, written options, forward foreign currency contracts, swaps, or financial futures contracts) or certain borrowings (e.g. reverse repurchase agreements), each Trust will, consistent with certain interpretive letters issued by the SEC, designate on its books and records cash or other liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each Trust may also be required to deliver or deposit securities as collateral for certain investments (e.g., financial futures contracts, reverse repurchase agreements, swaps and written options).

Investment Transactions and Investment Income: Investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income is recognized on the accrual basis. The Trusts amortize all premiums and discounts on debt securities.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. If the total dividends and distributions made in any tax year exceeds net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax return of capital.

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

Each Trust files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on Core Bond, High Yield, Income Opportunity, Income Trust and Strategic Bonds US federal tax returns remains open for the three years ended October 31, 2007 and the year ended August 31, 2008. The statute of limitations on High Incomes US federal tax returns remains open for the three years ended December 31, 2007 and the year ended August 31, 2008. The statute of limitations on the Corporate High Yield V and Corporate High Yield VIs tax returns remains open for the four years ended August 31, 2008. The statute of limitations on each Trusts state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Recent Accounting Pronouncement: In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133 (FAS 161), was issued. FAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entitys results of operations and financial position. FAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The impact on the Trusts financial statement disclosures, if any, is currently being assessed.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Trusts Board, non-interested Directors or Trustees (Independent Directors or Trustees) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent

80 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Notes to Financial Statements (continued)

dollar amounts have been invested in common shares of other certain BlackRock Closed-End Funds selected by the Independent Directors or Trustees. This has approximately the same economic effect for the Independent Directors or Trustees as if the Independent Directors or Trustees had invested the deferred amounts directly in other certain BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Trust. The Trusts may, however, elect to invest in common shares of other certain BlackRock Closed-End Funds selected by the Independent Directors or Trustees in order to match its deferred compensation obligations. Investments to cover each Trusts deferred compensation liability are included in other assets on the Statements of Assets and Liabilities. Dividends and distributions from the BlackRock Closed-End Fund investments under the plan are included in income-affiliated on the Statements of Operations.

Bank Overdraft: Core Bond, Corporate High Yield V, Corporate High Yield VI and Income Opportunity Trust all recorded bank overdrafts which resulted from management estimates of available cash.

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

2. Investment Advisory Agreement and Other Transactions with Affiliates:

Each Trust entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the Advisor), an indirect, wholly owned subsidiary of BlackRock, Inc., to provide investment services for each Trust and administration services for Core Bond, Corporate High Yield V, Corporate High Yield VI, High Income and Strategic Bond. The PNC Financial Services Group, Inc. (PNC) and Bank of America Corporation (BAC) are the largest stockholders of BlackRock, Inc. (BlackRock). BAC became a stockholder of BlackRock following its acquisition of Merrill Lynch & Co., Inc. (Merrill Lynch) on January 1, 2009. Prior to that date, both PNC and Merrill Lynch were considered affiliates of the Trusts under the 1940 Act. Subsequent to the acquisition, PNC remains an affiliate, but due to the restructuring of Merrill Lynchs ownership interest of BlackRock, BAC is not deemed to be an affiliate under the 1940 Act.

Each Trusts investment advisory fee paid to the Advisor is computed weekly and payable monthly based on an annual rate of 0.60% for Corporate High Yield V and Income Opportunity and 0.65% for Income Trust, 0.70% for Corporate High Yield VI, of each Trusts average net assets and 0.75% of the first $200 million and 0.50% thereafter for High Income, 0.55% for Core Bond, 1.05% for High Yield and 0.75% for Strategic Bond, of each Trusts average total assets (including any assets attributable to borrowings) minus the sum of accrued liabilities (other than debt representing financial leverage). The Advisor has voluntarily agreed to waive a portion of the investment advisory fees or other expenses on Strategic Bond as a percentage of its average weekly managed assets as follows: 0.10% through February 28, 2009 and 0.05% through February 28, 2010.

High Yield, Income Opportunity and Income Trust each has an Administration Agreement with the Advisor. The administration fee paid to the Advisor is computed weekly and payable monthly based on an annual rate, 0.10% for Income Opportunity, and 0.15% for Income Trust, of each Trusts average net assets and 0.10% for High Yield of the Trusts average weekly managed assets.

For the six months ended February 28, 2009, the Trusts reimbursed the Advisor for certain accounting services, which are included in accounting services in the Statements of Operations. The reimbursements were as follows:

	Reimbursement to Advisor
Core Bond	$ 2,868
Corporate High Yield V	$ 1,877
Corporate High Yield VI	$ 2,058
High Income	$ 1,012
Strategic Bond	$ 760

The Advisor has agreed to waive its advisory fees by the amount of investment advisory fees each Trust pays to the Advisor indirectly through its investment in affiliated money market funds. These amounts are included in fees waived by advisor on the Statements of Operations. For the six months ended February 28, 2009, the amounts were as follows:

Core Bond	$
High Income	$ 283
High Yield	$ 227
Income Trust	$ 7,724

The Advisor has entered into a separate sub-advisory agreement with BlackRock Financial Management, Inc. (BFM), an affiliate of the Advisor, with respect to Core Bond, Corporate High Yield V, Corporate High Yield VI, High Income and Strategic Bond, under which the Advisor pays BFM for services it provides, a monthly fee that is a percentage of the investment advisory fee paid by each Trust to the Advisor.

For the period September 1, 2008 to December 31, 2008, Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), a wholly owned subsidiary of Merrill Lynch, earned commissions on transactions of securities as follows:

Core Bond	$
Income Opportunity	$ 220

Pursuant to the terms of the custody agreement, custodian fees may be reduced by amounts calculated on uninvested cash balances, which are shown on the Statements of Operations as fees paid indirectly.

Certain officers and/or directors or trustees of the Trusts are officers and/or directors of BlackRock, Inc. or its affiliates. The Trusts reimburse the Advisor for compensation paid to the Trusts Chief Compliance Officer.

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 81

Notes to Financial Statements (continued)

3. Investments:

Purchases and sales of investments (including paydowns and TBA and mortgage dollar roll transactions and excluding short-term securities and US government securities), for the six months ended February 28, 2009 were as follows:

	Purchases	Sales
Core Bond	$ 621,156,017	$ 575,462,567
Corporate High Yield V	$ 80,480,509	$ 140,410,808
Corporate High Yield VI	$ 78,481,534	$ 140,473,254
High Income	$ 20,331,550	$ 34,601,884
High Yield	$ 6,676,367	$ 10,630,481
Income Opportunity	$ 726,624,430	$ 712,021,624
Income Trust	$ 2,030,253,042	$ 1,973,826,271
Strategic Bond	$ 10,721,916	$ 22,682,874

For the six months ended February 28, 2009, purchases and sales of US government securities were as follows:

	Purchases	Sales
Core Bond	$ 63,029,374	$ 158,241,848
Income Opportunity	$ 53,253,323	$ 144,262,928
Income Trust	$ 8,625,384	$ 17,219,617
Strategic Bond		$ 3,971,296

For the six months ended February 28, 2009, purchases and sales attributable to mortgage dollar rolls were as follows:

	Purchases	Sales
Core Bond	$ 452,085,425	$ 476,897,257
Income Opportunity	$ 559,691,877	$ 592,449,810
Income Trust	$ 1,792,305,349	$ 1,691,746,720

Transactions in options written for the six months ended February 28, 2009 were as follows:

Core Bond

| Outstanding
call options written, beginning of period | 171 | $ | 2,895,912 | |
| --- | --- | --- | --- | --- |
| Options
written | 36 | | 1,912,345 | |
| Options
expired | (118 | ) | (643,852 | ) |
| Options
closed | (14 | ) | (583,875 | ) |
| Outstanding
call options written, end of period | 75 | $ | 3,580,530 | |
| *Some contracts represent a notional amount of $1,000,000. | | | | |

| Outstanding
put options written, beginning of period | 90 | $ | 2,828,173 | |
| --- | --- | --- | --- | --- |
| Options
written | 28 | | 1,457,125 | |
| Options
expired | (46 | ) | (859,355 | ) |
| Options
closed | (14 | ) | (583,875 | ) |
| Outstanding
put options written, end of period | 58 | $ | 2,842,068 | |
| *Some contracts represent a notional amount of $1,000,000. | | | | |

Income Opportunity

| Outstanding
call options written, beginning of period | 176 | $ | 3,261,524 | |
| --- | --- | --- | --- | --- |
| Options
written | 37 | | 1,953,760 | |
| Options
expired | (100 | ) | (160,852 | ) |
| Options
exercised | (18 | ) | (494,200 | ) |
| Options
closed | (14 | ) | (605,115 | ) |
| Outstanding
call options written, end of period | 81 | $ | 3,955,117 | |
| *Some contracts represent a notional amount of $1,000,000. | | | | |

| Outstanding
put options written, beginning of period | 96 | $ | 3,196,173 | |
| --- | --- | --- | --- | --- |
| Options
written | 29 | | 1,487,300 | |
| Options
expired | (38 | ) | (589,700 | ) |
| Options
closed | (14 | ) | (605,115 | ) |
| Outstanding
put options written, end of period | 73 | $ | 3,488,658 | |
| *Some contracts represent a notional amount of $1,000,000. | | | | |

Income Trust

| Outstanding
call options written, beginning of period | 58 | $ | 2,182,977 | |
| --- | --- | --- | --- | --- |
| Options
written | 4 | | 221,725 | |
| Options
expired | (30 | ) | (990,000 | ) |
| Outstanding
call options written, end of period | 32 | $ | 1,414,702 | |
| *Some contracts represent a notional amount of $1,000,000. | | | | |

| Outstanding
put options written, beginning of period | 58 | $ | 2,182,982 | |
| --- | --- | --- | --- | --- |
| Options
written | 4 | | 221,725 | |
| Options
expired | (30 | ) | (990,000 | ) |
| Outstanding
put options written, end of period | 32 | $ | 1,414,707 | |
| *Some contracts represent a notional amount of $1,000,000. | | | | |

4. Reverse Repurchase Agreements:

For the six months ended February 28, 2009, the daily weighted average interest rates were as follows:

Core Bond	1.82 %
Income Opportunity	0.68 %
Income Trust	0.79 %
Strategic Bond	0.31 %

82 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Notes to Financial Statements (continued)

5. Commitments:

Corporate High Yield VI may invest in floating rate loans. In connection with these investments, the Trust may also enter into unfunded corporate loans (commitments). Commitments may obligate the Trust to furnish temporary financing to a borrower until permanent financing can be arranged. In connection with these commitments, the Trust earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is classified in the Statements of Operations as facility and other fees, is recognized ratably over the commitment period. As of February 28, 2009, the Trust had the following unfunded loan commitments:

| Corporate High Yield VI | | Value
of Underlying Loan (000) |
| --- | --- | --- |
| CHS/Community
Health Systems, Inc. Delayed Draw Term Loan | | $ 6 |

6. Market and Credit Risk

In the normal course of business, the Trusts invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (credit risk). The value of securities held by the Trusts may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Trusts; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Trusts may be exposed to counterparty risk, or the risk that an entity with which the Trusts have unsettled or open transactions may default. Financial assets, which potentially expose the Trusts to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Trusts exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in the Trusts Statements of Assets and Liabilities.

7. Capital Share Transactions:

There are 200 million of $0.01 par value shares authorized for Income Opportunity and Income Trust. There are an unlimited number of $0.001 par value shares authorized for Core Bond, High Yield and Strategic Bond. There are an unlimited number of no par value shares authorized for High Income. There are 200 million of $0.10 par value shares authorized for Corporate High Yield V and Corporate High Yield VI.

Shares issued and outstanding for the six months ended February 28, 2009 and the year ended October 31, 2008 increased by the following amounts as a result of dividend reinvestments:

Core Bond	4,253
High Yield	3,537	1,496

Shares remained constant for all other Trusts for the six months ended February 28, 2009, the year ended August 31, 2008 (period November 1, 2007 to August 31, 2008 for Core Bond, High Yield, Income Opportunity, Income Trust and Strategic Bond and period January 1, 2008 to August 31, 2008 for High Income) and the year ended October 31, 2007 for Core Bond, Income Opportunity, Income Trust and Strategic Bond and the year ended December 31, 2007 for High Income.

8. Short-Term Borrowings:

On May 16, 2008, Corporate High Yield V, Corporate High Yield VI, High Income and High Yield renewed their revolving credit and security agreement funded by a commercial paper asset securitization program with Citicorp North America, Inc. (Citicorp), as Agent, certain secondary backstop lenders and certain asset securitization conduits, as lenders (the Lenders). The agreement was renewed for one year and at the time of renewal has maximum limits of $212 million for Corporate High Yield V, $227 million for Corporate High Yield VI, $80 million for High Income, and $32 million for High Yield.

Under the Citicorp program, the conduits will fund advances to each Trust through highly rated commercial paper. The Trusts have granted a security interest in substantially all of its assets to, and in favor of, the Lenders as security for its obligations to the Lenders. The interest rate on each Trusts borrowings is based on the interest rate carried by the commercial paper plus a program fee. In addition, each Trust pays a liquidity fee to the secondary backstop lenders and the agent. These amounts are shown on the Statements of Operations as borrowing costs.

Under the agreement, the Trusts are subject to certain conditions and covenants, which include among other things, limitations on asset declines over prescribed time periods. As a result of the decline in net assets attributable to market conditions, certain terms of the facility were renegotiated effective December 5, 2008, which included a reduction of the maximum limits to $127 million for Corporate High Yield V, $135 million for Corporate High Yield VI, $41 million for High Income and $16 million for High Yield, waivers of certain financial covenants by the Lenders, and an increase in program and liquidity fees under the facility.

For the six months ended February 28, 2009, the daily weighted average interest rates were as follows:

Corporate High Yield V	3.99 %
Corporate High Yield VI	3.98 %
High Income	2.96 %
High Yield	3.42 %

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 83

Notes to Financial Statements (concluded)

9. Capital Loss Carryforward:

As of August 31, 2008, the Trusts had capital loss carryforwards available to offset future realized capital gains through the indicated year of expiration:

| Expires August 31, | Core
Bond | Corporate High Yield V | Corporate High Yield VI | High
Income | High
Yield | Income Opportunity | Income
Trust | Strategic
Bond |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2009 | | | | $ 55,878,284 | $ 15,159,280 | | $ 13,940,898 | |
| 2010 | | | | 102,576,339 | 8,468,860 | | | |
| 2011 | | | | 28,467,396 | 4,771,417 | | 21,960,613 | |
| 2012 | | | | 2,339,279 | 316,410 | | 10,100,201 | |
| 2013 | | | | | | | 3,861,222 | |
| 2014 | $ 4,880,373 | | $ 2,291,195 | 7,043,976 | 2,060,533 | $ 2,451,626 | 6,952,429 | $ 447,113 |
| 2015 | | | 564,489 | | 2,467,772 | 2,342,921 | 8,585,744 | |
| 2016 | 17,415,494 | $ 950,802 | 1,125,717 | 10,829,322 | 2,039,760 | 14,734,497 | 20,304,187 | 2,036,040 |
| Total | $ 22,295,867 | $ 950,802 | $ 3,981,401 | $ 207,134,596 | $ 35,284,032 | $ 19,529,044 | $ 85,705,294 | $ 2,483,153 |

10. Subsequent Events:

On March 5, 2009, Corporate High Yield V, Corporate High Yield VI, High Income and High Yield terminated their agreement with Citicorp and entered into a senior committed secured, 364-day revolving line of credit and a separate security agreement (the Agreement) with State Street Bank and Trust Company (SSB). The Agreement has a maximum commitment of $127 million for Corporate High Yield V, $135 million for Corporate High Yield VI, $41 million for High Income and $16 million for High Yield. The Trusts have granted a security interest in substantially all of their assets to SSB.

The Trusts paid an ordinary income dividend on March 31, 2009 to shareholders on record on March 16, 2009 in the following amounts:

Core Bond	$
Corporate High Yield V	$ 0.1000
Corporate High Yield VI	$ 0.1000
High Income	$ 0.0182
High Yield	$ 0.0435
Income Opportunity	$ 0.0510
Income Trust	$ 0.0240
Strategic Bond	$ 0.0695

84 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Officers and Directors/Trustees

| Richard E. Cavanagh, Chairman of
the Board and Director/Trustee |
| --- |
| Karen P. Robards, Vice Chair of
the Board, |
| Chair of the Audit
Committee and Director/Trustee |
| G. Nicholas Beckwith, III,
Director/Trustee |
| Richard S. Davis,
Director/Trustee |
| Kent Dixon, Director/Trustee |
| Frank J. Fabozzi,
Director/Trustee |
| Kathleen F. Feldstein,
Director/Trustee |
| James T. Flynn, Director/Trustee |
| Henry Gabbay, Director/Trustee |
| Jerrold B. Harris,
Director/Trustee |
| R. Glenn Hubbard,
Director/Trustee |
| W. Carl Kester, Director/Trustee |
| Donald C. Burke, Trust President
and Chief Executive Officer |
| Anne F. Ackerley, Vice President |
| Neal J. Andrews, Chief Financial
Officer |
| Jay M. Fife, Treasurer |
| Brian P. Kindelan, Chief
Compliance Officer of the Trusts |
| Howard B. Surloff, Secretary |

Effective January 1, 2009, Robert S. Salomon, Jr. retired as Director/Trustee of the Trusts. The Board wishes Mr. Salomon well in his retirement.

Custodian
State Street Bank and Trust
Company
Boston, MA 02101
Transfer Agent
Computershare Trust Companies,
N.A.
Canton, MA 02021
Accounting Agent
State Street Bank and Trust
Company
Princeton, NJ 08540
Independent
Registered Public Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540
Legal Counsel
Skadden, Arps, Slate, Meagher
& Flom LLP
New York, NY 10036
Trust Address
BlackRock Closed-End Funds
c/o BlackRock Advisors, LLC
100 Bellevue Parkway
Wilmington, DE 19809

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 85

Additional Information
Proxy Results

The Annual Meeting of Shareholders was held on September 12, 2008 for shareholders of record on July 14, 2008 to elect director or trustee nominees of each Trust:

Approved the Class I Directors/Trustees as follows:

| Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | |
| --- | --- | --- | --- | --- | --- | --- |
| BlackRock Core Bond Trust | 21,459,877 | 1,223,481 | 21,451,198 | 1,232,160 | 21,408,231 | 1,275,127 |
| BlackRock High Income Shares | 41,122,770 | 1,276,307 | 41,131,870 | 1,267,207 | 41,164,481 | 1,234,596 |
| BlackRock High Yield Trust | 5,809,070 | 210,280 | 5,807,206 | 212,144 | 5,809,361 | 209,989 |
| BlackRock Income Opportunity Trust, Inc. | 28,038,798 | 459,511 | 28,018,437 | 479,872 | 28,025,190 | 473,119 |
| BlackRock Income Trust, Inc. | 54,935,385 | 1,348,352 | 54,924,020 | 1,359,717 | 54,930,108 | 1,353,629 |
| BlackRock Strategic Bond Trust | 6,074,999 | 191,538 | 6,073,893 | 192,644 | 6,071,431 | 195,106 |
| W.
Carl Kester | | Robert
S. Salomon, Jr. | | | | |
| Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | | | |
| BlackRock Core Bond Trust | 21,457,595 | 1,225,763 | 21,446,480 | 1,236,878 | | |
| BlackRock High Income Shares | 41,163,715 | 1,235,362 | 41,126,675 | 1,272,402 | | |
| BlackRock High Yield Trust | 5,809,361 | 209,989 | 5,807,963 | 211,387 | | |
| BlackRock Income Opportunity Trust, Inc. | 28,047,632 | 450,677 | 28,021,973 | 476,336 | | |
| BlackRock Income Trust, Inc. | 54,937,219 | 1,346,518 | 54,932,914 | 1,350,823 | | |
| BlackRock Strategic Bond Trust | 6,074,878 | 191,659 | 6,071,646 | 194,891 | | |
| Approved the Directors as
follows: | | | | | | |
| G.
Nicholas Beckwith, III | | Kent
Dixon | | R.
Glenn Hubbard | | |
| Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | |
| BlackRock Corporate High Yield Fund V, Inc. | 24,526,746 | 863,288 | 24,522,955 | 867,079 | 24,527,996 | 862,038 |
| BlackRock Corporate High Yield Fund VI, Inc. | 24,968,191 | 733,686 | 24,963,860 | 738,017 | 24,965,919 | 735,958 |
| W.
Carl Kester | | Robert
S. Salomon, Jr. | | Richard
S. Davis | | |
| Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | |
| BlackRock Corporate High Yield Fund V, Inc. | 24,527,455 | 862,579 | 24,520,736 | 869,298 | 24,528,079 | 861,955 |
| BlackRock Corporate High Yield Fund VI, Inc. | 24,967,482 | 734,395 | 24,963,890 | 737,987 | 24,970,701 | 731,176 |
| Frank
J. Fabozzi | | James
T. Flynn | | Karen
P. Robards | | |
| Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | |
| BlackRock Corporate High Yield Fund V, Inc. | 24,526,655 | 863,379 | 24,522,355 | 867,679 | 24,525,836 | 864,198 |
| BlackRock Corporate High Yield Fund VI, Inc. | 24,969,667 | 732,210 | 24,966,257 | 735,620 | 24,974,042 | 727,835 |
| Richard
E. Cavanagh | | Kathleen
F. Feldstein | | Henry
Gabbay | | |
| Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | Votes
For | Votes
Withheld | |
| BlackRock Corporate High Yield Fund V, Inc. | 24,522,056 | 867,978 | 24,521,320 | 868,714 | 24,526,105 | 863,929 |
| BlackRock Corporate High Yield Fund VI, Inc. | 24,971,207 | 730,670 | 24,967,172 | 734,705 | 24,970,701 | 731,176 |
| Jerrold
B. Harris | | | | | | |
| Votes
For | Votes
Withheld | | | | | |
| BlackRock Corporate High Yield Fund V, Inc. | 24,524,336 | 865,698 | | | | |
| BlackRock Corporate High Yield Fund VI, Inc. | 24,969,787 | 732,090 | | | | |

86 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

Additional Information (continued)

| Availability of Quarterly Schedule of
Investments |
| --- |
| Each Trust files their complete
schedule of portfolio holdings with the SEC for the first and third quarters
of each fiscal year on Form N-Q. Each Trusts Forms N-Q are available on the
SECs website at http://www.sec.gov and may also be reviewed and copied at
the SECs Public Reference Room in Washington, DC. Information on the
operation of the Public Reference Room may be obtained by calling (800)
SEC-0330. Each Trusts Forms N-Q may also be obtained upon request and
without charge by calling (800) 441-7762. |
| Electronic Delivery |
| Electronic copies of most
financial reports are available on the Trusts website or shareholders can
sign up for e-mail notifications of quarterly statements, annual and
semi-annual reports and prospectuses by enrolling in the Trusts electronic
delivery program. |
| Shareholders Who
Hold Accounts with Investment Advisors, Banks or Brokerages: |
| Please contact your financial
advisor to enroll. Please note that not all investment advisors, banks or
brokerages may offer this service. |
| General Information |
| The Trusts will mail only one
copy of shareholder documents, including annual and semi-annual reports and
proxy statements, to shareholders with multiple accounts at the same address.
This practice is commonly called householding and it is intended to reduce
expenses and eliminate duplicate mailings of shareholder documents. Mailings
of your shareholder documents may be householded indefinitely unless you
instruct us otherwise. If you do not want the mailing of these documents to
be combined with those for other members of your household, please contact
the Trusts at (800) 441-7762. |
| Quarterly performance,
semi-annual and annual reports and other information regarding each Trust may
be found on BlackRocks website, which can be accessed at http://www.blackrock.com.
This reference to BlackRocks website is intended to allow investors public
access to information regarding each Trust and does not, and is not intended
to, incorporate BlackRocks website into this report. |
| BlackRock Privacy Principles |
| BlackRock is committed to
maintaining the privacy of its current and former fund investors and
individual clients (collectively, Clients) and to safeguarding their
nonpublic personal information. The following information is provided to help
you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with
select parties. |
| If you are located in a
jurisdiction where specific laws, rules or regulations require BlackRock to provide
you with additional or different privacy-related rights beyond what is set
forth below, then BlackRock will comply with those specific laws, rules or
regulations. |
| BlackRock obtains or verifies
personal nonpublic information from and about you from different sources,
including the following: (i) information we receive from you or, if
applicable, your financial intermediary, on applications, forms or other
documents; (ii) information about your transactions with us, our affiliates,
or others; (iii) information we receive from a consumer reporting agency; and
(iv) from visits to our websites. |
| BlackRock does not sell or
disclose to nonaffiliated third parties any nonpublic information about its
Clients, except as permitted by law or as necessary to service Client
accounts. These nonaffiliated third parties are required to protect the
confidentiality and security of this information and to use it only for its
intended purpose. |
| We may share information with
our affiliates to service your account or to provide you with information
about other BlackRock products or services that may be of interest to you. In
addition, BlackRock restricts access to nonpublic personal information about
its Clients to those BlackRock employees with a legitimate business need for
the information. BlackRock maintains physical, electronic and procedural
safeguards that are designed to protect the nonpublic personal information of
its Clients, including procedures relating to the proper storage and disposal
of such information. |

SEMI-ANNUAL REPORT FEBRUARY 28, 2009 87

Additional Information (concluded)

Section 19 Notices

The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon the Trusts investment experience during the remainder of its fiscal year and may be subject to changes based on the tax regulations. The Trust will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

| | Total
Fiscal Period-to-Date Cumulative Distributions by Character — Net Investment Income | Net
Realized Capital Gains | Return
of Capital | Total
Per Common Share | Percentage
of Fiscal Period-to-Date Cumulative Distributions by Character — Net Investment Income | Net
Realized Capital Gains | Return
of Capital | Total
Per Common Share |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Core Bond | $ 0.37256 | | $ 0.02165 | $ 0.39421 | 95 % | 0 % | 5 % | 100 % |
| High Yield | $ 0.28898 | | $ 0.01702 | $ 0.30600 | 94 % | 0 % | 6 % | 100 % |
| Income Opportunity | $ 0.30600 | | | $ 0.30600 | 100 % | 0 % | 0 % | 100 % |
| Income Trust | $ 0.14400 | | | $ 0.14400 | 100 % | 0 % | 0 % | 100 % |
| Strategic Bond | $ 0.46200 | | | $ 0.46200 | 100 % | 0 % | 0 % | 100 % |

88 SEMI-ANNUAL REPORT FEBRUARY 28, 2009

[This Page Intentionally Left Blank]

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

A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling toll-free (800) 411-7762; (2) at www.blackrock.com; and (3) on the Securities and Exchange Commissions website at http://www.sec.gov. Information about how each Trust voted proxies relating to securities held in each Trusts portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at www.blackrock.com or by calling (800) 441-7762 and (2) on the Securities and Exchange Commissions website at http://www.sec.gov.

CEF1-8-0209

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

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

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

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

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

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

Item 8 Portfolio Managers of Closed-End Management Investment Companies Not Applicable to this semi-annual report

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

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

Item 11 Controls and Procedures

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

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

Item 12 Exhibits attached hereto

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

12(a)(2) Certifications Attached hereto

12(a)(3) Not Applicable

12(b) Certifications Attached hereto

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

BlackRock Income Trust, Inc.

By:
Donald C. Burke
Chief Executive Officer
of
BlackRock Income Trust,
Inc.

Date: April 22, 2009

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

By:
Donald C. Burke
Chief Executive Officer
(principal executive officer) of
BlackRock Income Trust,
Inc.

Date: April 22, 2009

By:
Neal J. Andrews
Chief Financial Officer
(principal financial officer) of
BlackRock Income Trust,
Inc.

Date: April 22, 2009

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BLACKROCK INCOME TRUST, INC.

CEF1-8-0209

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