--------------------------------------------------------------------------------
BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
May 31, 2002
Dear Shareholder:
The semi-annual period ended April 30, 2002, saw general turmoil in the
equity markets. However, during this time bond markets, particularly municipal
securities, proved to be a shelter for investors seeking refuge from unstable
economic conditions. Over the period, municipal bonds outperformed Treasuries
returning 1.08% versus -1.88%, respectively, as measured by the LEHMAN BROTHERS
MUNICIPAL BOND INDEX* and LEHMAN BROTHERS TREASURY INDEX.**
During the six-month period, the bond market was not without volatility. In
the aftermath of the September 11th tragedy, the Federal Reserve Board (the
"Fed") lowered interest rates four times before the year ended. Since bond
prices generally move in the opposite direction from interest rates, this
aggressive action initially sent bond yields downward and prices (and returns)
markedly higher.
For the first quarter of 2002, issues of new municipal securities increased
by 10%, totaling $65 billion, setting a record for the largest first quarter
issuance in history. Due in part to budgetary pressures, a slowing economy, and
municipalities' ongoing need to finance infrastructure projects, the final month
of the period continued to see heightened levels of new issuance and
year-to-date volume has now reached $87 billion. In March, fixed income markets
suffered following the Fed's announcement of a bias shift from "potential
weakness" to "neutral," which led the investment community to anticipate an
economy in the early stages of recovery. Despite higher than expected
unemployment numbers during April, economic indicators generally concluded the
period on a more positive tone than they began. U.S. manufacturing, as measured
by the ISM (Institute for Supply Management) Index, remained at expansionary
levels in April and the Consumer Confidence Index has bounced from its November
low on increasing expectations. However, we remain cautious that the strong
consumer demand, which has created an increasingly optimistic stimulus, may
become exhausted and slow.
Interest rate fluctuations, such as we have seen recently can be difficult
for investors, especially those who depend on fixed income investments for
current income. We encourage you to consult with your financial advisor to help
you establish a strategy that best fits your overall goals and risk tolerance.
The semi-annual report includes a summary of market conditions over the
period, a review of the strategy employed by your Trust's portfolio managers,
the Trust's unaudited financial statements and a listing of the portfolio's
holdings. We encourage you to read the report and we thank you for making
BlackRock part of your investment program.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
----------
* The Lehman Brothers Municipal Bond Index measures the performance of the
investment grade long-term tax-exempt bond market. The Index is unmanaged and
cannot be purchased directly.
** The Lehman Brothers Treasury Index measures the performance of the public
obligations of the U.S. Treasury. The Index is unmanaged and cannot be
purchased directly.
1
May 31, 2002
Dear Shareholder:
We are pleased to present the first unaudited semi-annual report for the
BlackRock New York Municipal Income Trust (the "Trust") for the period ended
April 30, 2002. We would like to take this opportunity to review the Trust's
stock price, net asset value (NAV) performance, summarize market developments
and discuss recent portfolio management activity.
The Trust is a non-diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BNY". The
Trust's investment objective is to provide current income exempt from regular
Federal income tax and New York State and New York City personal income taxes.
The Trust seeks to achieve this objective by investing in New York tax-exempt
general obligation and revenue bonds issued by city, county and state
municipalities. The Trust will invest at least 80% of its total assets in
municipal bonds that at the time of investment are investment grade quality
(rated "AAA" to "BBB" by a major rating agency or of equivalent quality). The
Trust may invest up to 20% of its total assets in municipal bonds that at the
time of investment are non-investment grade quality (rated "BB" or "B" by a
major rating agency or of equivalent quality).
The table below summarizes the changes in the Trust's share price and net
asset value:
-----------------------------------------------------
4/30/02 10/31/01 CHANGE HIGH LOW
--------------------------------------------------------------------------------
SHARE PRICE $13.94 $14.62 (4.65)% $15.00 $13.24
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $13.79 $14.09 (2.13)% $14.27 $13.13
--------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
Economic performance was mixed during the semi-annual period although
increasingly positive economic data surfaced as time progressed. The U.S.
economy showed signs of a rebound on the heels of strong consumer and military
spending, which helped to overcome the devastation of September 11th. The Fed
also provided further monetary stimulus by cutting interest rates two additional
times prior to year-end, leaving the federal funds rate at 1.75%. This was in
addition to nine previous interest rate reductions by the Fed during 2001. The
Consumer Confidence Index initially reached its lowest level in eight years
during November, but marked a steady climb during the remainder of the period as
investors readily anticipated an economic recovery. The economy continued to see
increasingly optimistic data emerge throughout the first quarter of 2002. Gross
Domestic Product ("GDP") during the first quarter rose 5.6%, the fastest rate in
two years, and the manufacturing sector saw substantial gains as the Purchasing
Managers Index indicated expansion for the first time in 19 months. Although
productivity increased 8.6% during the first quarter, unemployment in April
reached 6.0%. However, the unexpectedly high unemployment number is believed to
be a result of recent legislation prompting many to apply for extended benefits.
After surprising growth in the first quarter of 2002, the fixed income markets
came under pressure following the March 19th announcement by the Federal Open
Market Committee ("FOMC") to leave rates steady, citing a bias shift from
"potential weakness" to "neutral." The equity markets did not significantly
benefit from the emergence of the strong growth indicators as they were
challenged by several high profile bankruptcies. Closing out the period, April
saw the largest advancement in retail sales in six months and inflationary
pressures remain relatively in check. However, concerns regarding the corporate
environment and violence in the Middle East and Asia have left many investors
apprehensive about the markets. Going forward, although low inventory levels
should continue to provide support for manufacturing data, concerns exist
surrounding the long-term strength of the highly leveraged consumer.
Following a steepening of the yield curve throughout the majority of 2001,
yields over the period trended higher causing the curve to flatten. Signs of a
recovering economy caused yields to rise in sympathy with expectations of a
higher fed funds rate by year end. The 5- to 10-year portion of the yield curve
came under the most pressure, rising 93 and 86 basis points, respectively,
during the period. Yields on 2- and 30-year maturities also suffered during the
period rising 80 and 72 basis points, respectively. After struggling following
the FOMC's announcement of a bias shift in March, Treasuries bounced back in
April. April's performance was driven by economic pessimism, which surfaced as
enthusiasm for a rapid economic recovery waned amidst tensions in the Middle
East, cautious corporate earnings announcements and government reports of a
slower growth pattern.
2
Looking ahead, a budget surplus of only $78 billion and a 30% decline in tax
revenues for 2001 has caused Treasury finances to deteriorate sharply and should
result in larger auction sizes. However, the allowable debt limit set by
Congress will soon be reached, possibly leading the Treasury to pursue
additional methods of financing. As of April 30, 2002, the 10-year Treasury was
yielding 5.09% versus 4.23% on October 31, 2001.
On a tax-adjusted basis, municipal bonds outperformed the taxable domestic
bond market for the semi-annual period ended April 30, 2002, returning 1.76% (as
measured by the LEHMAN BROTHERS MUNICIPAL BOND INDEX at a tax bracket of 38.6%)
versus -0.01% for the LEHMAN BROTHERS AGGREGATE INDEX. Strong institutional and
retail demand for municipal bonds allowed the sector to show outperformance
versus Treasuries across the entire curve. Demand was driven primarily by two
factors: yields on municipal securities remain attractive versus alternative
fixed income investments, and continued volatility in the equity markets led
investors to seek diversification. Strong demand was met by significant new
issuance as the first quarter of 2002 posted a 10% increase over the same period
in 2001 and was the largest first quarter total on record. In April, new bond
issuance continued its strong trend with a 12% increase from a year earlier,
bringing total year-to-date issuance to $87 billion. Similar to Treasuries, the
municipal yield curve flattened over the period as yields on short to
intermediate maturities rose more quickly than long-term rates.
The onset of the recession combined with the September 11th tragedy
impacted the U.S. economy and especially that of New York. Economic growth in
New York ceased after September 11th and the State's unemployment rate has grown
to 6.1% in April 2002, up from 4.3% a year earlier and the highest level since
March 1998. Since April 2001, private sector employment has declined 1.5% or
107,800 jobs; the national decrease was 1.4% during the same period. Many of
these losses are concentrated in New York City. While the State benefits from a
broad and diverse economic base and substantial wealth and resources, the impact
on the State's budget is significant. The State will use up its $1.6 billion
surplus from fiscal 2001 to meet the budgetary needs in FY2002. The State's
fiscal flexibility will diminish unless the economy rebounds and tax receipts
increase; management will be challenged to maintain an operating surplus going
forward. The FY2003 budget was produced in a timely manner, which helped
maintain the New York State's AA rating from S&P.
The State's fiscal health is directly linked to that of New York City. The
demise of the World Trade Center and the devastation to lower Manhattan has
impacted the City's business structure. New York City lost 147,000 jobs due to
the recession and the September 11th attack. The unemployment rate grew to 7.7%
in April 2002, up from 5.5% the previous April. However, private sector
employment showed the first indications of growth, in April 2002. The City's
administration projects that it will close FY2002 in balance and with a small
surplus. FY2003-06 will present the City with greater challenges; a budget gap
in excess of $4 billion is projected for next year. The long-term uncertainty
has prompted Moody's to change the outlook on New York City's A2 rating to
"negative."
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons.
Additionally, the Trust employs leverage to enhance its income by borrowing
at short-term municipal rates and investing the proceeds in longer maturity
issues that have higher yields. The degree to which the Trust can benefit from
its use of leverage may affect its ability to pay high monthly income. At the
end of the semi-annual period, the Trust's leverage amount was approximately 39%
of total assets.
Municipals outperformed Treasuries for the period due to strong retail
demand despite record issuance. The curve flattened over the period as rates at
the short end of the curve rose rapidly in anticipation of the Fed raising rates
in an economic recovery. Rates at the long end of the curve rose moderately and
the curve remains steep on a historical basis. We continue to focus on bonds
with higher coupons as they provide the most attractive income stream and also
tend to have superior performance in a rising rate environment.
3
The following charts show the Trust's asset composition and credit quality
allocations:
--------------------------------------------------------------------------
SECTOR BREAKDOWN
--------------------------------------------------------------------------
SECTOR APRIL 30, 2002 OCTOBER 31, 2001
--------------------------------------------------------------------------
Transportation 18% 12%
--------------------------------------------------------------------------
School 13% 24%
--------------------------------------------------------------------------
Water & Sewer 12% 17%
--------------------------------------------------------------------------
Lease Revenue 11% 7%
--------------------------------------------------------------------------
Housing 10% 6%
--------------------------------------------------------------------------
Other 10% 7%
--------------------------------------------------------------------------
Special Tax 9% 6%
--------------------------------------------------------------------------
Hospital 6% 6%
--------------------------------------------------------------------------
District 5% 5%
--------------------------------------------------------------------------
City, County & State 2% 4%
--------------------------------------------------------------------------
Industrial & Pollution Control 2% 2%
--------------------------------------------------------------------------
Power 2% 1%
--------------------------------------------------------------------------
Sales Tax -- 3%
--------------------------------------------------------------------------
--------------------------------------------------------------------------
CREDIT RATING* APRIL 30, 2002 OCTOBER 31, 2001
--------------------------------------------------------------------------
AAA/Aaa 30% 38%
--------------------------------------------------------------------------
AA/Aa 27% 32%
--------------------------------------------------------------------------
A/A 31% 18%
--------------------------------------------------------------------------
BBB/Baa 5% 5%
--------------------------------------------------------------------------
Not Rated 7% 7%
--------------------------------------------------------------------------
----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
We look forward to continuing to manage the Trust to benefit from the
opportunities available to investors in the investment grade municipal market.
We thank you for your investment and continued interest in the BlackRock New
York Municipal Income Trust. Please feel free to call our marketing center at
(800) 227-7BFM (7236) if you have any specific questions that were not addressed
in this report.
Sincerely,
/s/ Robert S. Kapito /s/ Kevin M. Klingert
Robert S. Kapito Kevin M. Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
4
--------------------------------------------------------------------------------
BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BNY
--------------------------------------------------------------------------------
Initial Offering Date: July 27, 2001
Closing Share Price as of 4/30/02: $13.94
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/02: $13.79
Yield on Closing Share Price as of 4/30/02 ($13.94)(1): 6.29%
Current Monthly Distribution per Share(2): $0.073125
Current Annualized Distribution per Share(2): $0.877500
--------------------------------------------------------------------------------
(1) Yield on closing share price is calculated by dividing the current
annualized distribution per share by the closing share price.
(2) The distribution is not constant and is subject to change.
PRIVACY PRINCIPLES OF THE TRUST
The Trust is committed to maintaining the privacy of shareholders and to
safeguarding its non-public personal information. The following information is
provided to help you understand what personal information the Trust collects,
how we protect that information and why, in certain cases, we may share
information with select other parties.
Generally, the Trust does not receive any non-public personal information
relating to its shareholders, although certain nonpublic personal information of
its shareholders may become available to the Trust. The Trust does not disclose
any non-public personal information about its shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Trust restricts access to non-public personal information about the
shareholders to BlackRock employees with a legitimate business need for the
information. The Trust maintains physical, electronic and procedural safeguards
designed to protect the non-public personal information of its shareholders.
5
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BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS APRIL 30, 2002 (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--158.2%
NEW YORK--126.8%
Charter Mac Equity Issuer Trust,
NR $ 6,000 Ser. A, 6.30%, 6/30/49 ........................................................... 6/09 @ 100 $ 5,968,740
NR 5,500 Ser. B, 6.80%, 11/30/50 .......................................................... 11/10 @ 100 5,464,415
Aaa 2,750 Columbia Cnty. Ind. Dev. Agcy., Civic Fac. Rev., Hudson Valley Care,
Ser. A, 6.875%, 3/20/37 .......................................................... 3/12 @ 105 3,125,815
AA 8,000 Dutchess Cnty. Ind. Dev. Agcy., Civic Fac. Rev., Vassar Coll. Proj.,
5.35%, 9/01/40 ................................................................... 8/11 @ 101 8,014,560
AAA 1,355 East Rochester Hsg. Auth., Gates Sr. Hsg. Inc. Proj., 6.13%, 4/20/43, GNMA ......... 10/11 @ 105 1,422,763
A- 2,590 Long Island Pwr. Auth. Elec. Sys. Rev., Ser. A, 5.50%, 12/01/29 .................... 6/03 @ 101 2,619,992
Munimae TE Bond Subsidiary, LLC,
NR 6,000 Ser. A, 6.30%, 6/30/49 ........................................................... 11/09 @ 100 5,967,600
NR 3,000 Ser. B, 6.80%, 6/30/50 ........................................................... 11/10 @ 100 2,980,590
New York City Ind. Dev. Agcy.,
A 750 Marymount Sch. Proj., 5.125%, 9/01/21, ACA ....................................... 9/11 @ 102 727,073
A 2,000 Marymount Sch. Proj., 5.25%, 9/01/31, ACA ........................................ 9/11 @ 102 1,927,760
AAA 1,550 Royal Charter Presbyterian, 5.25%, 12/15/32, FSA ................................. 12/11 @ 102 1,533,973
BBB- 14,850 Spec. Arpt. Airis JFK I LLC Proj., Ser. A, 5.50%, 7/01/28 ........................ 7/11 @ 100 13,745,605
A3 6,000 Term. One Grp. Assoc. Proj., 6.00%, 1/01/19 ...................................... 1/04 @ 102 6,079,920
New York City Mun. Wtr. Fin. Auth. Rev.,
AAA 5,000 Ser. A, 5.00%, 6/15/32, FGIC ..................................................... 6/11 @ 100 4,812,700
AA 7,000 Ser. C, 5.00%, 6/15/32 ........................................................... 6/11 @ 100 6,717,270
AA 12,865 Ser. E, 5.00%, 6/15/26 ........................................................... 6/11 @ 100 12,479,565
New York City Trans. Fin. Auth. Rev., Ser. C,
AA+ 16,470 4.75%, 5/01/23 ................................................................... 5/08 @ 101 15,449,025
AA+ 9,600 5.00%, 5/01/29 ................................................................... 5/09 @ 101 9,216,864
New York St. Dorm. Auth. Rev.,
AA- 3,000 City Univ. Sys., Ser. A, 5.25%, 7/01/31 .......................................... 7/11 @ 100 2,969,490
A3 13,780 Lenox Hill Hosp. Oblig. Grp., 5.50%, 7/01/30 ..................................... 7/11 @ 101 13,744,448
AAA 2,425 New Sch. Univ., 5.00%, 7/01/31, MBIA ............................................. 7/11 @ 100 2,335,299
AAA 9,000 New Sch. Univ., 5.00%, 7/01/41, MBIA ............................................. 7/11 @ 100 8,558,550
AAA 12,000 New York Univ., Ser. 2, 5.00%, 7/01/41, AMBAC .................................... 7/11 @ 100 11,411,400
AAA 2,000 Winthrop Univ. Hosp. Assoc., Ser. A, 5.25%, 7/01/31, AMBAC ....................... 7/11 @ 101 1,982,580
AAA 9,710 New York St. Environ. Facs. Corp., Mun. Wtr. Fin. Rev., 5.00%, 6/15/31 ............. 6/11 @ 100 9,421,807
Aaa 15,500 New York St. Mtg. Agcy. Rev., Ser. A, 5.30%, 10/01/31 .............................. 4/11 @ 100 15,160,395
AA- 6,290 New York St. Urban Dev. Corp. Rev., Correctional Cap. Facs., Ser. 6,
5.375%, 1/01/25 .................................................................. 1/06 @ 102 6,316,670
Port Auth. New York & New Jersey Rev.,
AAA 9,500 Ser. 124, 5.00%, 8/01/36, FGIC ................................................... 8/08 @ 101 9,170,255
AAA 14,000 Spec. Oblig. JFK Intl. Air Term. 6, 5.75%, 12/01/22, MBIA ........................ 12/07 @ 102 14,476,700
A1 2,500 Rensselaer Tobacco Asset Sec. Corp., New York Tobacco Settlement Rev.,
Ser. A, 5.75%, 6/01/43 ........................................................... 6/12 @ 100 2,439,000
A1 5,000 Rockland Tobacco Asset Sec. Corp., New York Tobacco Settlement Rev.,
5.75%, 8/15/43 ................................................................... 8/12 @ 100 4,877,650
AA- 5,000 Triborough Bridge and Tunl. Auth. Rev., Gen. Purp., Ser. A, 5.00%, 1/01/32 ......... 1/12 @ 100 4,734,600
AA 2,500 Westchester Cnty. Ind. Dev. Agcy. Rev., Winward Sch. Civic Fac., 5.25%,
10/01/31, RADIAN ................................................................. 10/11 @ 100 2,427,450
------------
218,280,524
------------
See Notes to Financial Statements.
6
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PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO--31.4%
A $ 5,900 Puerto Rico Comnwlth. Hwy. & Trans. Auth., Trans. Rev., Ser. D, 5.25%, 7/01/38 ..... 7/12 @ 100 $ 5,873,214
A 14,000 Puerto Rico Comnwlth. Pub. Impvt., G.O., Ser. A, 5.125%, 7/01/31 ................... 7/11 @ 100 13,640,060
A 11,380 Puerto Rico Pub. Bldgs. Auth. Rev., Gov't. Facs., Ser. D, 5.25%, 7/01/36 ........... 7/12 @ 100 11,293,284
Puerto Rico Pub. Fin. Corp. Rev., Comnwlth. Approp., Ser. E,
A- 10,000 5.50%, 8/01/29 ................................................................... 2/12 @ 100 10,160,100
A- 7,000 5.70%, 8/01/25 ................................................................... 2/10 @ 100 7,220,430
A- 5,750 5.75%, 8/01/30 ................................................................... 2/07 @ 100 5,854,420
------------
54,041,508
------------
TOTAL LONG-TERM INVESTMENTS (COST $276,196,092) .................................... 272,322,032
------------
SHORT-TERM INVESTMENTS**--3.0%
A1+ 2,200 New York City, G.O., Ser. B, 1.55%, 5/01/02, FRDD .................................. N/A 2,200,000
A1+ 2,950 New York St. Energy Research & Dev. Auth. P.C.R., NY St. Elec. & Gas Corp.,
Ser. C, 1.55%, 5/01/02, FRDD ..................................................... N/A 2,950,000
------------
Total Short-Term Investments (cost $5,150,000) ..................................... 5,150,000
TOTAL INVESTMENTS--161.2% (COST $281,346,092) ...................................... 277,472,032
Other assets in excess of liabilities--2.5% ........................................ 4,459,106
Preferred stock at redemption value, including dividends payable--(63.7)% .......... (109,770,746)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ................................. $172,160,392
============
----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the earlier of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
+ Date (month/year) and price of the earliest call or redemption. There may be
other call provisions at varying prices at later dates.
++ Security is exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt fromregistration
to qualified institutional buyers. As of April 30, 2002, the Trust held 11.8%
of its net assets in securities restricted as to sale.
See Notes to Financial Statements.
7
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BLACKROCK NEW YORK
MUNICIPAL INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $281,346,092) (Note 1) .............. $277,472,032
Cash ............................................................ 994,715
Interest receivable ............................................. 4,533,720
Other assets .................................................... 10,148
------------
283,010,615
------------
LIABILITIES
Dividends payable--common shares ................................ 912,182
Investment advisory fee payable (Note 2) ........................ 80,514
Deferred Trustees fees (Note 1) ................................. 2,958
Other accrued expenses .......................................... 83,823
------------
1,079,477
------------
PREFERRED STOCK AT REDEMPTION VALUE
$.001 par value per share and $25,000
liquidation value per share applicable
to 4,390 shares, including dividends
payable (Note 1 & 4) .......................................... 109,770,746
------------
NET ASSETS APPLICABLE TO COMMON
SHAREHOLDERS .................................................... $172,160,392
============
Composition of net assets applicable to common shareholders:
Par value (Note 4) .......................................... $ 12,484
Paid-in capital in excess of par ............................ 177,133,843
Undistributed net investment income (Note 1) .................. 229,215
Accumulated net realized loss ................................. (1,341,090)
Net unrealized depreciation (Note 1) .......................... (3,874,060)
------------
Net assets applicable to common shareholders,
April 30, 2002 ................................................ $172,160,392
============
Net asset value per common share of
beneficial interest:
($172,160,392 / 12,483,505 common shares
of beneficial interest issued and outstanding) ................ $13.79
======
--------------------------------------------------------------------------------
BLACKROCK NEW YORK
MUNICIPAL INCOME TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest (Note 1) ............................................... $7,556,038
----------
Expenses
Investment advisory ............................................. 832,033
Auction agent ................................................... 156,875
Registration .................................................... 37,375
Custodian ....................................................... 35,351
Reports to shareholders ......................................... 23,431
Independent accountants ......................................... 17,816
Trustees ........................................................ 15,609
Transfer agent .................................................. 11,651
Legal ........................................................... 1,883
Miscellaneous ................................................... 23,793
----------
Total expenses ................................................ 1,155,817
Less fees waived by Advisor (Note 2) ............................ (346,680)
Less fees paid indirectly (Note 2) .............................. (30,441)
----------
Net expenses .................................................... 778,696
----------
Net investment income ............................................. 6,777,342
----------
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Net realized loss on investments .................................. (1,272,176)
Net change in unrealized appreciation
on investments .................................................. (2,920,721)
----------
Net loss on investments ........................................... (4,192,897)
----------
DIVIDENDS TO PREFERRED SHAREHOLDERS
FROM NET INVESTMENT INCOME ........................................ (816,276)
----------
NET INCREASE IN NET ASSETS APPLICABLE
TO COMMON SHAREHOLDERS RESULTING
FROM OPERATIONS ................................................... $1,768,169
==========
See Notes to Financial Statements.
8
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BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
FOR THE PERIOD
SIX MONTHS JULY 27, 2001*
ENDED THROUGH
APRIL 30, OCTOBER 31,
2002 2001(1)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS APPLICABLE
TO COMMON SHAREHOLDERS
OPERATIONS:
Net investment income ........................... $ 6,777,342 $ 1,712,744
Net realized gain/loss on investments ........... (1,272,176) (68,914)
Net change in unrealized appreciation
on investments ................................ (2,920,721) (953,339)
Dividends to preferred shareholders from net
investment income ............................. (816,276) (140,446)
Dividends to preferred shareholders in excess
of net investment income ...................... -- (21,856)
------------ ------------
Net increase in net assets resulting
from operations ............................. 1,768,169 528,189
------------ ------------
DIVIDENDS TO COMMON SHAREHOLDERS:
From net investment income ...................... (5,465,316) (1,572,298)
In excess of net investment income .............. -- (244,679)
------------ ------------
Total dividends ............................... (5,465,316) (1,816,977)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from the issuance of common shares . -- 153,176,800
Common shares issued in connection with the
reinvestment of common dividends .............. 747,173 15,854
Net proceeds from underwriters' over-allotment
option exercised .............................. -- 23,206,500
------------ ------------
Net proceeds from capital share transactions .. 747,173 176,399,154
------------ ------------
Total increase (decrease) ..................... (2,949,974) 175,110,366
------------ ------------
NET ASSETS
Beginning of period ............................... 175,110,366 --
------------ ------------
End of period (including undistributed and
distributions in excess of net investment
income of $229,215 and $266,535, respectively) .. $172,160,392 $175,110,366
============ ============
----------
* Commencement of investment operations (Note 1).
(1) Prior year amounts have been restated to conform to the current period's
presentation under the provisions of EITF D-98 (Note 1).
See Notes to Financial Statements.
9
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BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
FOR THE
PERIOD
JULY 27,
SIX MONTHS 2001(1)
ENDED THROUGH
APRIL 30, OCTOBER 31,
2002 2001(2,3)
-------- --------
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period(4) ................ $ 14.09 $ 14.33
-------- --------
Investment operations:
Net investment income ................................ 0.54 0.15
Net realized and unrealized gain (loss)
on investments ..................................... (0.33) (0.08)
Dividends and distributions to preferred
shareholders from:
Net investment income .............................. (0.07) (0.01)
In excess of net investment income ................. -- (0.00)5
-------- --------
Net increase (decrease) from investment operations ..... 0.14 0.06
-------- --------
Dividends and distributions to common
shareholders from:
Net investment income .............................. (0.44) (0.14)
In excess of net investment income ................. -- (0.02)
-------- --------
Total dividends and distributions ...................... (0.44) (0.16)
-------- --------
Capital charges with respect to issuance of:
Common shares ........................................ -- (0.03)
Preferred shares ..................................... -- (0.11)
-------- --------
Total capital charges .................................. -- (0.14)
-------- --------
Net asset value, end of period(4) ...................... $ 13.79 $ 14.09
======== ========
Market Value, End of Period(4) ......................... $ 13.94 $ 14.62
======== ========
TOTAL INVESTMENT RETURN6 ............................... (1.56)% (5.58)%
======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:(7,8)
Expenses after fee waiver and fees paid indirectly ..... 0.91% 0.73%
Expenses before fee waiver and fees paid indirectly .... 1.35% 1.03%
Net investment income after fee waiver, fees paid
indirectly and before preferred share dividends ...... 7.91% 3.93%
Preferred share dividends .............................. 0.95% 0.37%
Net investment income available to common
shareholders ......................................... 6.96% 3.56%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (000) ........ $172,746 $163,077
Portfolio turnover ..................................... 21% 2%
Net assets of common shareholders,
end of period (000) .................................. $172,160 $175,110
Preferred shares outstanding (000) ..................... $109,750 $109,750
Asset coverage per preferred share, end of period ...... $ 64,222 $ 64,894
----------
(1) Commencement of investment operations. This information includes the
initial investment by BlackRock Advisors, Inc. Net asset value immediately
after the closing of the first public offering was $14.30 (Note 1).
(2) Calculated using the average shares method.
(3) Prior periods have been restated to conform to the current period's
presentation under the provisions of EITF D-98.
(4) Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
(5) Amount is less than $0.005 per share.
(6) Total investment return is calculated assuming a purchase of a common share
at the current market price on the first day and a sale at the current
market price on the last day of the period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment returns for less than a full year are not annualized. Past
performance is not a guarantee of future results.
(7) Ratios are calculated on the basis of income and expenses applicable to
both the common and preferred shares relative to the average net assets of
the common shareholders.
(8) Annualized.
The information above represents the unaudited operating performance for a
common share outstanding, total investment return, ratios to average net assets
and other supplemental data for the periods indicated. This information has been
determined based upon financial information provided in the financial statements
and market value data for the Trust's common shares.
See Notes to Financial Statements.
10
--------------------------------------------------------------------------------
BLACKROCK NEW YORK
MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & ACCOUNTING POLICIES
The BlackRock New York Municipal Income Trust (the "Trust") was organized as a
Delaware business trust on March 30, 2001, and is registered as a
non-diversified, closed-end management investment company under the Investment
Company Act of 1940. The Trust had no transactions until July 16, 2001, when it
sold 8,028 common shares for $115,001 to BlackRock Advisors, Inc. Investment
operations commenced on July 27, 2001. The Trust's investment objective is to
provide current income exempt from regular Federal income tax and New York State
and New York City personal income taxes. The ability of issuers of debt
securities held by the Trust to meet their obligations may be affected by
economic developments in the state, a specific industry or region. No assurance
can be given that the Trust's investment objective will be achieved.
The following is a summary of significant accounting policies followed by
the Trust.
SECURITIES VALUATION: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by dealers or pricing services approved by the Trustees. In determining
the value of a particular security, pricing services may use certain information
with respect to transactions in such securities, quotations from bond dealers,
market transactions in comparable securities and various relationships between
securities. Short-term investments may be valued at amortized cost. Any
securities or other assets for which such current market quotations are not
readily available are valued at fair value as determined in good faith under
procedures established by and under the general supervision and responsibility
of the Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on trade date. Realized and unrealized gains and losses are calculated
on the identified cost basis. The Trust also records interest income on an
accrual basis and amortizes premium and accretes discount to interest income on
securities purchased using the interest method.
SEGREGATION: In cases in which the Investment Company Act of 1940, as amended
and the interpretive positions of the Securities and Exchange Commission ("SEC")
require that the Trust segregate assets in connection with certain Trust
investments (e.g., when issued securities, reverse repurchase agreements or
futures contracts), the Trust will, consistent with certain interpretive letters
issued by the SEC, designate on its books and records cash or other liquid debt
securities having a market value at least equal to the amount that would
otherwise be required to be physically segregated.
FEDERAL INCOME TAXES: It is the Trust's intention to elect to be treated as a
regulated investment company under the Internal Revenue Code and to distribute
sufficient net income to share holders. For this reason and because
substantially all of the Trust's gross income consists of tax-exempt interest,
no Federal income tax provision is required. DIVIDENDS AND DISTRIBUTIONS: The
Trust declares and pays dividends and distributions to common shareholders
monthly from net investment income, net realized short-term capital gains and
other sources, if necessary. Net long-term capital gains, if any, in excess of
loss carryforwards may be distributed annually. Dividends and distributions are
recorded on the ex-dividend date. Dividends and distributions to preferred
shareholders are accrued and determined as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Trustees on May 24, 2001, non-interested Trustees may elect to defer
receipt of all or a portion of their annual compensation.
Deferred amounts earn a return as though equivalent dollar amounts had been
invested in common shares of other BlackRock funds selected by the Trustees.
This has the same economic effect as if the Trustees had invested the deferred
amounts in such other BlackRock funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Trustees in order to match its deferred compensation obligations. CHANGE IN
FINANCIAL STATEMENT CLASSIFICATION FOR AMPS: In accordance with the provisions
of EITF D-98, "Classification and Measurement of Redeemable Securities,"
effective for the current period, the Trust has reclassified its Auction Market
Preferred Shares ("AMPS") outside of permanent equity in the Net Assets section
of the Statement of Assets and Liabilities. In addition, distributions to AMPS
shareholders are now classified as a component of the net assets resulting from
operations on the statement of operations and changes in net assets and as a
component of the investment operations in the financial highlights. Prior year
amounts presented have been restated to conform to this period's presentation.
This change has no impact on the net assets applicable to common shares of the
Trust.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Advisors, Inc.
(the "Advisor"), a wholly owned subsidiary of BlackRock, Inc. BlackRock
Financial Management, Inc., a wholly owned subsidiary of BlackRock, Inc., serves
as sub-advisor to the Trust. BlackRock, Inc. is an indirect majority-owned
subsidiary of PNC Financial Services Group, Inc. The investment management
agreement covers both investment advisory and administration services.
The investment advisory fee paid to the Advisor is computed weekly and
payable monthly at an annual rate of 0.60% of the
11
Trust's average weekly managed assets. "Managed assets" means the total assets
of the Trust (including any assets attributable to any preferred shares that may
be outstanding) minus the sum of accrued liabilities (other than debt
representing financial leverage). The liquidation preference of the preferred
shares is not a liability. The total dollar amounts paid to the Advisor by the
Trust under the Investment Advisory Agreement for the six months ended April 30,
2002 and for the period ended October 31, 2001 were $485,353 and $177,970,
respectively.
The Advisor has voluntarily agreed to waive receipt of a portion of the
investment management fee or other expenses of the Trust in the amount of 0.25%
of average weekly managed assets for the first 5 years of the Trust's
operations, 0.20% in year 6, 0.15% in year 7, 0.10% in year 8 and 0.05% in year
9. Pursuant to the agreement, the Advisor waived fees $346,680 during the six
months ended April 30, 2002.
Pursuant to the agreements, the Advisor provides continuous supervision of
the investment portfolio, pays the compensation of officers of the Trust who are
affiliated persons of the Advisor and pays occupancy and certain clerical and
accounting costs. The Trust bears all other costs and expenses, which include
reimbursements to the Advisor for certain operational support services provided
to the Trust.
Pursuant to the terms of the custody agreement, the Trust receives earnings
credits from its custodian when positive cash balances are maintained, which are
used to offset custody fees. The earnings credits for the six months ended April
30, 2002, were approximately $30,441.
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short-term investments,
for the six months ended April 30, 2002 aggregated $59,083,094 and $62,291,254,
respectively.
The Federal income tax basis of the Trust's investments at April 30, 2002,
was $281,345,859, and accordingly, net unrealized depreciation was $3,873,827
(gross unrealized appreciation-- $398,197, gross unrealized depreciation--
$4,272,024).
NOTE 4. CAPITAL
There are an unlimited number of $.001 par value common shares of beneficial
interest authorized. The Trust may classify or reclassify any uninsured common
shares of beneficial interest into one or more series of preferred shares. Of
the 12,483,505 common shares of beneficial interest outstanding at April 30,
2002, the Advisor owned 8,199 shares.
Transactions in common shares of beneficial interest for the period July
27, 2001 (commencement of investment operations) to October 31, 2001, were as
follows:
Shares issued in connection with
initial public offering 10,808,028
Shares issued in connection with
the exercise of the underwriters'
over-allotment option 1,620,000
Shares issued in connection
with the reinvestment of
common dividends 1,134
----------
Net increase in shares outstanding 12,429,162
==========
During the six months ended April 30, 2002, the Trust issued 54,343 common
shares of beneficial interest under its Dividend Reinvestment Plan.
Offering costs of $357,600 incurred in connection with the Trust's offering
of common shares have been charged to paid-in capital in excess of par of the
common shares.
On October 5, 2001, the Trust reclassified 4,390 common shares of
beneficial interest and issued two series of Auction Market Preferred Shares
("preferred shares") Series W7--2,195 and Series F7--2,195. The preferred shares
have a liquidation value of $25,000 per share plus any accumulated unpaid
dividends. Underwriting discounts of $1,097,500 and offering costs of $193,101
incurred in connection with the preferred share offering have been charged to
paid-in capital in excess of par of the common shares.
Dividends on Series W7 and Series F7 are cumulative at a rate which is
reset every 7 days based on the results of an auction. Dividend rates ranged
from 1.24% to 2.00% during the six months ended April 30, 2002.
The Trust may not declare dividends or make other distributions to common
shares or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred shares would be less than 200%.
The preferred shares are redeemable at the option of the Trust, in whole or
in part, on any dividend payment date at $25,000 per share plus any accumulated
or unpaid dividends whether or not declared. The preferred shares are also
subject to mandatory redemption at $25,000 per share plus any accumulated or
unpaid dividends, whether or not declared, if certain requirements relating to
the composition of the assets and liabilities of the Trust as set forth in the
Declaration of Trust are not satisfied.
The holders of preferred shares have voting rights equal to the holders of
common shares (one vote per share) and will vote together with holders of common
shares as a single class. However, holders of preferred shares are also entitled
to elect two of the Trust's Trustees. In addition, the Investment Company Act of
1940 requires that, along with approval by shareholders that might otherwise be
required, the approval of the holders of a majority of any outstanding preferred
shares, voting separately as a class would be required to (a) adopt any plan of
reorganization that would adversely affect the preferred shares, and (b) take
any action requiring a vote of security holders, including, among other things,
changes in the Trust's subclassification as a closed-end investment company or
changes in its fundamental investment restrictions.
NOTE 5. DIVIDENDS
Subsequent to April 30, 2002, the Board of Trustees of the Trust declared a
dividend of $0.073125 per common share payable June 3, 2002, to shareholders of
record on May 15, 2002.
For the period May 1, 2002 through May 31, 2002, dividends declared on
preferred shares totaled $166,293.
12
--------------------------------------------------------------------------------
BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), common
shareholders are automatically enrolled to have all distributions of dividends
and capital gains reinvested by EquiServe Trust Company, N.A. (the "Plan Agent")
in Trust shares pursuant to the Plan. Shareholders who elect not to participate
in the Plan will receive all distributions in cash paid by check and mailed
directly to the shareholders of record (or if the shares are held in street or
other nominee name, then to the nominee) by the Plan Agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will acquire shares for the participants' accounts,
depending upon the circumstances described below, either (i) through receipt of
unissued but authorized shares from the Trust ("newly issued shares") or (ii) by
purchase of outstanding shares on the open market, on the New York Stock
Exchange or elsewhere ("open-market purchases"). If, on the dividend payment
date, the net asset value per share ("NAV") is equal to or less than the market
price per share plus estimated brokerage commissions (such condition being
referred to herein as "market premium"), the Plan Agent will invest the dividend
amount in newly issued shares on behalf of the participants. The number of newly
issued shares to be credited to each participant's account will be determined by
dividing the dollar amount of the dividend by the NAV on the date the shares are
issued. However, if, the NAV is less than 95% of the market price on the payment
date, the dollar amount of the dividend will be divided by 95% of the market
price on the payment date. If, on the dividend payment date, the NAV is greater
than the market value per share plus estimated brokerage commissions (such
condition being referred to herein as "market discount"), the Plan Agent will
invest the dividend amount in shares acquired on behalf of the participants in
open-market purchases.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any Federal income tax that may be payable on
such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan. There is no
direct service charge to participants in the Plan; however, the Trust reserves
the right to amend the Plan to include a service charge payable by the
participants. All correspondence concerning the Plan should be directed to the
Plan Agent at (800) 699-1BFM or 150 Royall Street, Canton, MA 02021.
13
--------------------------------------------------------------------------------
BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders or to its charter or
by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
Quarterly performance and other information regarding the Trust may be
found on BlackRock's website, which can be accessed at
http://www.blackrock.com/funds/cefunds.html. This reference to BlackRock's
website is intended to allow investors public access to quarterly information
regarding the Trust and is not intended to incorporate BlackRock's website into
this report.
The Annual Meeting of Shareholders was held May 23, 2002 to vote on the
following matter:
To elect two Trustees as follows:
TRUSTEE: CLASS TERM EXPIRING
-------- ----- ---- --------
Richard E. Cavanagh I 3 years 2005
James Clayburn La Force, Jr. I 3 years 2005
Trustees whose term of office continues beyond this meeting are Andrew F.
Brimmer, Kent Dixon, Frank J. Fabozzi, Laurence D. Fink, Walter F. Mondale and
Ralph L. Schlosstein.
Shareholders elected the two Trustees. The results of the voting were as
follows:
VOTES FOR* VOTES AGAINST* ABSTENTIONS*
---------- -------------- ------------
Richard E. Cavanagh 3,370 -- --
James Clayburn La Force, Jr. 12,212,906 -- 172,683
----------
* The votes represent common and preferred shareholders voting as a single
class except for Richard E. Cavanagh who was voted on and elected by the
preferred shareholders only.
Laurence D. Fink, Chairman of the Trust's Board of Trustees, and certain of
the officers of the Trust listed on the cover of this Report to Shareholders,
are also officers of the Advisor or Sub-Advisor. They serve in the following
capacities for the Advisor or Sub-Advisor: Laurence D. Fink--Chief Executive
Officer of the Advisor and Chairman and CEO of the Sub-Advisor, Ralph L.
Schlosstein--Director and President of the Advisor and the Sub-Advisor, Robert
S. Kapito--Director and Vice Chairman of the Advisor and Vice Chairman of the
Sub-Advisor, Kevin M. Klingert--Director and Managing Director of the Advisor
and Managing Director of the Sub-Advisor, Henry Gabbay--Managing Director of the
Advisor and the Sub-Advisor, Anne Ackerley--ManaginG Director of the Advisor and
the Sub-Advisor, Richard M. Shea and James Kong--Managing Directors of the
Sub-Advisor.
14
--------------------------------------------------------------------------------
BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVES
The BlackRock New York Municipal Income Trust's investment objective is to
provide current income exempt from regular Federal income tax and New York State
and New York City personal income taxes.
WHO MANAGES THE TRUST?
BlackRock Advisors, Inc. (the "Advisor") manages the Trust. The Advisor is a
wholly-owned subsidiary of BlackRock, Inc. ("BlackRock"), which is one of the
largest publicly traded investment management firms in the United States with
$238 billion of assets under management as of March 31, 2002. BlackRock manages
assets on behalf of institutional and individual investors worldwide through a
variety of equity, fixed income, liquidity and alternative investment products,
including the BLACKROCK FUNDS and BLACKROCK PROVIDENT INSTITUTIONAL FUNDS. In
addition, BlackRock provides risk management and investment system services to a
growing number of institutional investors under the BLACKROCK SOLUTIONS name.
Clients are served from the Company's headquarters in New York City, as well as
offices in Boston, Edinburgh, Hong Kong, San Francisco, Tokyo and Wilmington.
BlackRock is a member of The PNC Financial Services Group (NYSE: PNC), and is
majority-owned by PNC and by BlackRock employees.
WHAT CAN THE TRUST INVEST IN?
Under normal conditions, the Trust expects to continue to manage its assets so
that at least 80% of its investments are rated at least investment grade ("BBB"
by Standard & Poor's or "Baa" by Moody's Investor Services) and up to 20% of its
assets are rated below investment grade (Ba/BB or B) or that are unrated but
deemed to be of comparable quality by the Advisor. The Trust intends to invest
primarily all of the assets in a portfolio of New York Municipal Obligations,
which include debt obligations issued by the State of New York, its political
subdivisions, agencies and instrumentalities and by other qualifying issuers
that pay interest which, in the opinion of the bond counsel of the issuer, is
exempt from Federal and New York income taxes.
WHAT IS THE ADVISOR'S INVESTMENT STRATEGY?
The Advisor will manage the assets of the Trust in accordance with the Trust's
investment objective and policies to seek to achieve its objective by investing
primarily in municipal bonds that pay interest that is exempt from regular
Federal income tax and New York State and New York City personal income taxes.
As such, the Advisor actively manages the assets in relation to market
conditions and interest rate changes. Depending on yield and portfolio
allocation considerations, the Advisor may choose to invest a portion of the
Trust's assets in securities which pay interest that is subject to AMT
(alternative minimum tax). The Trust intends to invest primarily in long-term
bonds and expects bonds in its portfolio to maintain an average portfolio
maturity of 15 years or more, but the average maturity may be shortened or
lengthened from time to time depending on market conditions.
Under current market conditions the use of leverage increases the income earned
by the Trust. The Trust employs leverage primarily through the issuance of
preferred shares. Preferred shareholders will receive dividends based on
short-term rates in exchange for allowing the Trust to borrow additional assets.
These assets will be invested in longer-term assets which typically offer higher
interest rates and the difference between the cost of the dividends paid to
preferred shareholders and the interest earned on the longer-term securities
will provide higher income levels for common shareholders in most interest rate
environments. The Trust issued preferred shares to leverage the portfolio. See
"Leverage Considerations in the Trust".
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's common shares are traded on the New York Stock Exchange which
provides investors with liquidity on a daily basis. Orders to buy or sell shares
of the Trust must be placed through a registered broker or financial advisor.
The Trust pays monthly dividends which are typically paid on the first business
day of the month. For shares held in the shareholder's name, dividends
15
may be reinvested in additional shares of the fund through the Trust's transfer
agent, EquiServe Trust Company, N.A. Investors who wish to hold shares in a
brokerage account should check with their financial advisor to determine whether
their brokerage firm offers dividend reinvestment services.
LEVERAGE CONSIDERATIONS IN THE TRUST
The Trust employs leverage primarily through the issuance of preferred shares.
Leverage permits the Trust to borrow money at short-term rates and reinvest that
money in longer-term assets, which typically offer higher interest rates. The
difference between the cost of the borrowed funds and the income earned on the
proceeds that are invested in longer-term assets is the benefit to the Trust
from leverage.
Leverage increases the duration (or price sensitivity of the net assets with
respect to changes in interest rates) of the Trust, which can improve the
performance of the Trust in a declining rate environment, but can cause net
assets to decline faster in a rapidly rising interest rate environment. The
Advisor's portfolio managers continuously monitor and regularly review the
Trust's use of leverage and the Trust may reduce, or unwind, the amount of
leverage employed should the Advisor consider that reduction to be in the best
interests of the shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO THE TRUST
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
INVESTMENT OBJECTIVES. Although the objective of the Trust is to provide current
income that is exempt from regular Federal income tax and New York State and New
York City personal income taxes, there can be no assurance that this objective
will be achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to vary over time as fixed income market conditions change. Future dividends may
be higher or lower than the dividend the Trust is currently paying.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred shares,
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BNY) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
MUNICIPAL OBLIGATIONS. The value of municipal debt securities generally varies
inversely with changes in prevailing market interest rates. Depending on the
amount of call protection that the securities in the Trust have, the Trust may
be subject to certain reinvestment risks in environments of declining interest
rates.
HIGH YIELD RISK. The Trust may invest in high yield bonds, which involves
additional risks, including credit risk. The value of high yield, lower quality
bonds is affected by the creditworthiness of the issuers of the securities and
by general economic and specific industry conditions. Issuers of high yield
bonds are not as strong financially as those with higher credit ratings. The
Trust's investment in lower grade securities will expose the Trust to greater
risk than if the Trust owned only higher grade securities.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trustees and may have the effect of depriving shareholders of an opportunity to
sell their shares at a premium above the prevailing market price.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
alternative minimum tax.
16
--------------------------------------------------------------------------------
BLACKROCK NEW YORK MUNICIPAL INCOME TRUST
GLOSSARY
--------------------------------------------------------------------------------
CLOSED-END FUND: Investment vehicle which initially offers a fixed
number of shares and trades on a stock exchange. The
Trust invests in a portfolio of securities in
accordance with its stated investment objectives and
policies.
DISCOUNT: When a Trust's net asset value is greater than its
market price the Trust is said to be trading at a
discount.
DIVIDEND: Income generated by securities in a portfolio and
distributed to shareholders after the deduction of
expenses. This Trust declares and pays dividends to
common shareholders on a monthly basis.
DIVIDEND REINVESTMENT: Shareholders may have all dividends and distributions
of capital gains automatically reinvested into
additional shares of the Trust.
MARKET PRICE: Price per share of a security trading in the secondary
market. For a closed-end Trust, this is the price at
which one share of the Trust trades on the stock
exchange. If you were to buy or sell shares, you would
pay or receive the market price.
NET ASSET VALUE (NAV): Net asset value is the total market value of all
securities and other assets held by the Trust,
including income accrued on its investments, minus any
liabilities including accrued expenses, divided by the
total number of outstanding common shares. It is the
underlying value of a single common share on a given
day. Net asset value for the Trust is calculated weekly
and published in BARRON'S on Saturday and THE WALL
STREET JOURNAL on Monday.
PREMIUM: When a Trust's market price is greater than its net
asset value, the Trust is said to be trading at a
premium.
PREREFUNDED BONDS: These securities are collateralized by U.S. Government
securities which are held in escrow and are used to pay
principal and interest on the tax exempt issue and
retire the bond in full at the date indicated,
typically at a premium to par.
17
--------------------------------------------------------------------------------
BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
--------------------------------------------------------------------------------
TAXABLE TRUSTS
--------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ -----
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
BlackRock Core Bond Trust BHK N/A
BlackRock Strategic Bond Trust BHD N/A
TERM TRUSTS
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
TAX-EXEMPT TRUSTS
--------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ -----
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust BSD N/A
BlackRock California Municipal Income Trust BFZ N/A
BlackRock Municipal Income Trust BFK N/A
BlackRock New York Municipal Income Trust BNY N/A
BlackRock New Jersey Municipal Income Trust BNJ N/A
BlackRock Florida Municipal Income Trust BBF N/A
BlackRock New York Municipal Bond Trust BQH N/A
BlackRock Virginia Municipal Bond Trust BHV N/A
BlackRock Florida Municipal Bond Trust BIE N/A
BlackRock Municipal Bond Trust BBK N/A
BlackRock Maryland Municipal Bond Trust BZM N/A
BlackRock New Jersey Municipal Bond Trust BLJ N/A
BlackRock California Municipal Bond Trust BZA N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
BlackRock California Municipal 2018 Term Trust BJZ 12/18
BlackRock New York Municipal 2018 Term Trust BLH 12/18
BlackRock Municipal 2018 Term Trust BPK 12/18
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE DO NOT HESITATE TO CALL BLACKROCK
AT (800) 277-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.
18
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BLACKROCK ADVISORS, INC.
AN OVERVIEW
--------------------------------------------------------------------------------
BlackRock Advisors, Inc. (the "Advisor")manages the Trust. The Advisor is a
wholly-owned subsidiary of BlackRock, Inc. ("BlackRock"), which is one of the
largest publicly traded investment management firms in the United States with
$238 billion of assets under management as of March 31, 2002. BlackRock manages
assets on behalf of institutional and individual investors worldwide through a
variety of equity, fixed income, liquidity and alternative investment products,
including the BLACKROCK FUNDS and BLACKROCK PROVIDENT INSTITUTIONAL FUNDS. In
addition, BlackRock provides risk management advice and investment system
services to a growing number of institutional investors under the BLACKROCK
SOLUTIONS name. Clients are served from the Company's headquarters in New York
City, as well as offices in Boston, Edinburgh, Hong Kong, San Francisco, Tokyo
and Wilmington. BlackRock is a member of The PNC Financial Services Group (NYSE:
PNC), and is majority-owned by PNC and by BlackRock employees.
BlackRock's fixed income product was introduced in 1988 by a team of highly
seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first CMO, the floating rate CMO, the
senior/subordinated pass-through and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals are dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.
BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, BlackRock introduced the first closed-end mortgage fund, the
first taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, some
of which are designed to provide ongoing demand for the stock in the secondary
market. BlackRock manages a wide range of investment vehicles, each having
specific investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.
19
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BlackRock
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DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Kevin M. Klingert, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Anne Ackerley, SECRETARY
INVESTMENT ADVISOR
BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
SUB ADVISOR
BlackRock Financial Management, Inc.
40 East 52nd Street
New York, NY 10022
CUSTODIAN
State Street Bank and Trust Company
1 Heritage Drive
North Quincy, MA 02171
TRANSFER AGENT
EquiServe Trust Company, N.A.
150 Royall Street
Canton, MA 02021
(800) 699-1BFM
AUCTION AGENT
The Bank of New York
5 Penn Plaza, 13th Floor
New York, NY 10001
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, NY 10036
LEGAL COUNSEL - INDEPENDENT TRUSTEES
Debevoise & Plimpton
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of April 30, 2002 were not audited
and accordingly, no opinion is expressed on them.
This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of Trust shares.
Statements and other information contained in this report are as dated and
are subject to change.
BLACKROCK NEW YORK
MUNICIPAL INCOME TRUST
c/o BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
09248L-10-6
09248L-20-5
[RECYCLE LOGO] Printed on recycled paper 09248L-30-4
---------
BlackRock
---------
NEW YORK
MUNICIPAL
INCOME TRUST
==========================
SEMI-ANNUAL REPORT
APRIL 30, 2002
[LOGO](SM)BlackRock