[Federal Register Volume 74, Number 70 (Tuesday, April 14, 2009)]
[Notices]
[Pages 17237-17240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-8428]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28690; 812-13235-55]


Blackrock International Growth and Income Trust, et al.; Notice 
of Application

April 7, 2009.
AGENCY: Securities and Exchange Commission.

ACTION: Notice of application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from section 19(b) of 
the Act and rule 19b-1 under the Act.

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Summary of Application: Applicants request an order to permit certain 
closed-end investment companies to make periodic distributions of long-
term capital gains with respect to their outstanding common stock as 
frequently as twelve times each year, and as frequently as 
distributions are specified by or in accordance with the terms of any 
outstanding preferred stock that such investment companies may issue.

Applicants: BlackRock International Growth and Income Trust; BlackRock 
Global Equity Income Trust; BlackRock Preferred and Equity Advantage 
Trust; BlackRock Real Asset Equity Trust; BlackRock World Investment 
Trust; BlackRock Enhanced Dividend AchieversTM Trust; 
BlackRock Global Opportunities Equity Trust; BlackRock Health Sciences 
Trust; BlackRock Global Energy and Resources Trust; BlackRock S&P 
Quality Rankings Global Equity Managed Trust; BlackRock Strategic 
Dividend AchieversTM Trust; BlackRock Dividend 
AchieversTM Trust; BlackRock EcoSolutions Investment Trust; 
BlackRock Enhanced Government Fund, Inc.; BlackRock Enhanced Capital 
and Income Fund, Inc. (the ``Funds'') and BlackRock Advisors, LLC. (the 
``Adviser'').

Filing Dates: June 21, 2007, July 23, 2008, August 18, 2008, September 
22, 2008 and January 27, 2009.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on May 4, 2009, and should be accompanied by proof of service on 
applicants, in the form of an affidavit or, for lawyers, a certificate 
of service. Hearing requests should state the nature of the writer's 
interest, the reason for the request, and the issues contested. Persons 
who wish to be notified of a hearing may request notification by 
writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090; Applicants, c/o BlackRock Advisors, 
LLC, 100 Bellevue Parkway, Wilmington, Delaware 19809.

FOR FURTHER INFORMATION CONTACT: Wendy Friedlander, Senior Counsel, at 
(202) 551-6837, or James M. Curtis, Branch Chief, at (202) 551-6825 
(Division of Investment Management, Office of Chief Counsel).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
Commission's Public Reference Room, 100 F Street, NE., Washington, DC 
20549-1520 (telephone (202) 551-5850).

Applicants' Representations

    1. Each of the Funds is a closed-end management investment company 
registered under the Act.\1\ The common stock issued by each Fund is 
traded on either the New York Stock Exchange or NYSE Alternext US. 
Currently, only the BlackRock Preferred and Equity Advantage Trust has 
preferred stock outstanding, which stock is not traded on any exchange. 
Applicants believe that, in general, the common stockholders of the 
Funds are conservative, dividend-sensitive investors who desire current 
income periodically.
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    \1\ Applicants request that any order issued granting the relief 
requested in the application also apply to any closed-end investment 
company (``fund'') that in the future: (a) Is advised by the Adviser 
(including any successor in interest) or by any entity controlling, 
controlled by, or under common control (within the meaning of 
section 2(a)(9) of the Act) with the Adviser; and (b) complies with 
the terms and conditions of the requested order. A successor in 
interest is limited to entities that result from a reorganization 
into another jurisdiction or a change in the type of business 
organization.
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    2. The Adviser is registered under the Investment Advisers Act of 
1940. Each Fund and the Adviser have entered into an investment 
advisory agreement pursuant to which the Adviser provides investment 
advisory and portfolio management services to such Fund. The Adviser is 
a wholly-owned subsidiary of BlackRock, Inc.
    3. Applicants represent that on September 25, 2008, the Board of 
Directors or Board of Trustees (``Board'') of each of the Funds, 
including a majority of the members of each Board who are not 
``interested persons'' of such Fund, as defined in section 2(a)(19) of 
the Act (``Independent Members''), met and considered the adoption of a 
periodic pay-out policy (``Plan'') with respect to the Fund's common 
stock. Applicants represent that each Plan would provide for periodic 
level distributions to the Fund's common stockholders based upon a 
fixed amount per share, a fixed percentage of market price or a fixed 
percentage of net asset value (``NAV'') per share of common stock.
    4. Applicants represent that each Board requested and evaluated, 
and the Adviser furnished, such information as

[[Page 17238]]

the Board believed was reasonably necessary to make an informed 
determination of whether the Fund should adopt and implement a Plan. 
Applicants represent that at the meeting, each Board, including a 
majority of the Independent Members of the Board, determined that 
adoption and implementation of the Plan was consistent with the Fund's 
investment objectives and policies and in the best interest of the Fund 
and its stockholders, after considering information such as the 
purpose(s) of the Plan, any potential or actual conflicts of interest 
that the Adviser or any affiliated person of the Adviser may have 
relating to the adoption or implementation of the Plan, whether the 
rate of distribution under the Plan would exceed the Fund's expected 
total return (in relation to NAV per share of common stock) and the 
reasonably foreseeable material effects of such Plan on the Fund's 
long-term total return (in relation to market price and NAV).
    5. Applicants represent that at the September 25, 2008 meeting, 
each Board, including a majority of Independent Members of the Board, 
adopted compliance policies and procedures in accordance with rule 38a-
1 under the Act that are reasonably designed to ensure that all notices 
required to be sent to Fund stockholders pursuant to section 19(a) of 
the Act and rule 19a-1 thereunder (``Notices'') comply with Condition 
II below, and that all other written communications by a Fund or its 
agents regarding distributions under a Fund's Plan comply with 
condition III below. Applicants represent that each Board also adopted 
policies and procedures at that meeting that require the Fund to keep 
records that demonstrate the Fund's compliance with all of the 
conditions of the requested Order and that are necessary for the Fund 
to form the basis for, or demonstrate the calculation of, the amounts 
disclosed in its Notices.
    6. Applicants represent that each Board recorded the information in 
its meeting minutes that it considered and that formed the basis for 
the Board's approval of each Fund's Plan. Applicants represent that 
such minutes will be preserved for a period of not less than six years 
from the date of such meeting, the first two years in an easily 
accessible place, or for such longer period as may otherwise be 
required by law.

Applicants' Legal Analysis

    1. Section 19(b) generally makes it unlawful for any registered 
investment company to make long-term capital gains distributions more 
than once each year. Rule 19b-1 limits the number of capital gains 
dividends, as defined in section 852(b)(3)(C) of the Internal Revenue 
Code (``Code'') (``distributions''), that a fund may make with respect 
to any one taxable year to one, plus a supplemental ``clean up'' 
distribution made pursuant to section 855 of the Code not exceeding 10% 
of the total amount distributed for the year, plus one additional 
capital gain dividend made in whole or in part to avoid the excise tax 
under section 4982 of the Code.
    2. Section 6(c) provides that the Commission may, by order upon 
application, conditionally or unconditionally exempt any person, 
security, or transaction, or any class or classes of persons, 
securities or transactions, from any provision of the Act, if and to 
the extent that the exemption is necessary or appropriate in the public 
interest and consistent with the protection of investors and the 
purposes fairly intended by the policy and provisions of the Act.
    3. Applicants state that the one of the concerns underlying section 
19(b) and rule 19b-1 is that shareholders might be unable to 
differentiate between regular distributions of capital gains and 
distributions of investment income. Applicants argue that by providing 
the information required by section 19(a) and rule 19a-1, and by 
complying with the procedures adopted under the Plans and the 
conditions listed below, each Fund will ensure that its stockholders 
are provided sufficient information to understand that their periodic 
distributions are not tied to the Fund's net investment income (which 
for this purpose is the Fund's taxable income other than from capital 
gains) and realized capital gains to date, and may not represent yield 
or investment return. Accordingly, applicants assert that continuing to 
subject the Funds to section 19(b) and rule 19b-1 would afford 
shareholders no extra protection.
    4. Applicants note that section 19(b) and rule 19b-1 also were 
intended to prevent certain improper sales practices, including, in 
particular, the practice of urging an investor to purchase shares of a 
fund on the basis of an upcoming capital gains dividend (``selling the 
dividend''), where the dividend would result in an immediate 
corresponding reduction in NAV and would be in effect a taxable return 
of the investor's capital. Applicants assert that the ``selling the 
dividend'' concern should not apply to closed-end investment companies, 
such as the Funds, which do not continuously distribute shares. 
According to applicants, if the underlying concern extends to secondary 
market purchases of shares of closed-end funds that are subject to a 
large upcoming capital gains dividend, adoption of a Plan actually 
helps minimize the concern by avoiding, through periodic distributions, 
any buildup of large end-of-the-year distributions.
    5. Applicants also note that the common stock of closed-end funds 
that invest primarily in equity securities often trade in the 
marketplace at a discount to their NAV. Applicants believe that this 
discount may be reduced for closed-end funds that pay relatively 
frequent dividends on their common stock at a consistent rate, whether 
or not those dividends contain an element of long-term capital gain.
    6. Applicants assert that the application of rule 19b-1 to a Plan 
actually could have an undesirable influence on portfolio management 
decisions. Applicants state that, in the absence of an exemption from 
rule 19b-1, the implementation of a Plan imposes pressure on management 
(i) not to realize any net long-term capital gains until the point in 
the year that the fund can pay all of its remaining distributions in 
accordance with rule 19b-1, and (ii) not to realize any long-term 
capital gains during any particular year in excess of the amount of the 
aggregate pay-out for the year (since as a practical matter excess 
gains must be distributed and accordingly would not be available to 
satisfy pay-out requirements in following years), notwithstanding that 
purely investment considerations might favor realization of long-term 
gains at different times or in different amounts. Applicants thus 
assert that the limitation on the number of capital gain distributions 
that a fund may make with respect to any one year imposed by rule 19b-1 
may prevent the efficient operation of a Plan whenever that fund's 
realized net long-term capital gains in any year exceed the total of 
the periodic distributions that may include such capital gains under 
the rule. Applicants assert that the requested order would minimize 
these effects of rule 19b-1 by enabling the Funds to realize long-term 
capital gains as often as investment considerations dictate without 
fear of violating rule 19b-1.
    7. Applicants state that Revenue Ruling 89-81 under the Code 
requires that a fund that has both common stock and preferred stock 
outstanding designate the types of income, e.g., investment income and 
capital gains, in the same proportion as the total distributions 
distributed to each class for the tax year. To satisfy the 
proportionate designation requirements

[[Page 17239]]

of Revenue Ruling 89-81, whenever a fund has realized a long-term 
capital gain with respect to a given tax year, the fund must designate 
the required proportionate share of such capital gain to be included in 
common and preferred stock dividends. Applicants state that although 
rule 19b-1 allows a fund some flexibility with respect to the frequency 
of capital gains distributions, a fund might use all of the exceptions 
available under the rule for a tax year and still need to distribute 
additional capital gains allocated to the preferred stock to comply 
with Revenue Ruling 89-81.
    8. Applicants assert that the potential abuses addressed by section 
19(b) and rule 19b-1 do not arise with respect to preferred stock 
issued by a closed-end fund. Applicants assert that such distributions 
are fixed or determined in periodic auctions by reference to short-term 
interest rates rather than by reference to performance of the issuer 
and Revenue Ruling 89-81 determines the proportion of such 
distributions that are comprised of the long-term capital gains.
    9. Applicants also submit that the ``selling the dividend'' concern 
is not applicable to preferred stock, which entitles a holder to no 
more than a periodic dividend at a fixed rate or the rate determined by 
the market, and, like a debt security, is priced based upon its 
liquidation value, credit quality, and frequency of payment. Applicants 
state that investors buy preferred shares for the purpose of receiving 
payments at the frequency bargained for, and do not expect the 
liquidation value of their stock to change.
    10. Applicants request an order under section 6(c) granting an 
exemption from the provisions of section 19(b) and rule 19b-1 to permit 
each Fund to distribute periodic capital gains dividends (as defined in 
section 852(b)(3)(C) of the Code) as often as monthly in any one 
taxable year in respect of its common stock and as often as specified 
by or determined in accordance with the terms thereof in respect of its 
preferred stock.\2\
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    \2\ Applicants state that a future fund that relies on the 
requested order will satisfy each of the representations in the 
application except that such representations will be made in respect 
of actions by the board of directors or board of trustees of such 
future fund and will be made at a future time.
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Applicants' Conditions

    Applicants agree that, with respect to each fund seeking to rely on 
the order, the order will be subject to the following conditions:

I. Compliance Review and Reporting

    The fund's chief compliance officer will: (a) report to the fund 
Board, no less frequently than once every three months or at the next 
regularly scheduled quarterly board meeting, whether (i) the fund and 
the Adviser have complied with the conditions to the requested order, 
and (ii) a Material Compliance Matter, as defined in rule 38a-1(e)(2), 
has occurred with respect to compliance with such conditions; and (b) 
review the adequacy of the policies and procedures adopted by the fund 
no less frequently than annually.

II. Disclosures to Fund Shareholders

    A. Each Notice to the holders of the fund's common shares, in 
addition to the information required by section 19(a) and rule 19a-1:
    1. Will provide, in a tabular or graphical format:
    (a) The amount of the distribution, on a per common share basis, 
together with the amounts of such distribution amount, on a per common 
share basis and as a percentage of such distribution amount, from 
estimated: (A) Net investment income; (B) net realized short-term 
capital gains; (C) net realized long-term capital gains; and (D) return 
of capital or other capital source;
    (b) The fiscal year-to-date cumulative amount of distributions, on 
a per common share basis, together with the amounts of such cumulative 
amount, on a per common share basis and as a percentage of such 
cumulative amount of distributions, from estimated: (A) Net investment 
income; (B) net realized short-term capital gains; (C) net realized 
long-term capital gains; and (D) return of capital or other capital 
source;
    (c) The average annual total return in relation to the change in 
NAV for the 5-year period (or, if the fund's history of operations is 
less than five years, the time period commencing immediately following 
the fund's first public offering) ending on the last day of the month 
prior to the most recent distribution declaration date compared to the 
current fiscal period's annualized distribution rate expressed as a 
percentage of NAV as of the last day of the month prior to the most 
recent distribution declaration date; and
    (d) The cumulative total return in relation to the change in NAV 
from the last completed fiscal year to the last day of the month prior 
to the most recent distribution declaration date compared to the fiscal 
year-to-date cumulative distribution rate expressed as a percentage of 
NAV as of the last day of the month prior to the most recent 
distribution declaration date.
    Such disclosure shall be made in a type size at least as large and 
as prominent as the estimate of the sources of the current 
distribution; and
    2. Will include the following disclosure:
    (a) ``You should not draw any conclusions about the fund's 
investment performance from the amount of this distribution or from the 
terms of the fund's Plan'';
    (b) ``The fund estimates that it has distributed more than its 
income and net realized capital gains; therefore, a portion of your 
distribution may be a return of capital. A return of capital may occur, 
for example, when some or all of the money that you invested in the 
fund is paid back to you. A return of capital distribution does not 
necessarily reflect the fund's investment performance and should not be 
confused with `yield' or `income' ''; \3\ and
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    \3\ This disclosure will be included only if the current 
distribution or the fiscal year-to-date cumulative distributions are 
estimated to include a return of capital.
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    (c) ``The amounts and sources of distributions reported in this 
Notice are only estimates and are not being provided for tax reporting 
purposes. The actual amounts and sources of the amounts for tax 
reporting purposes will depend upon the fund's investment experience 
during the remainder of its fiscal year and may be subject to changes 
based on tax regulations. The fund 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.''
    Such disclosure shall be made in a type size at least as large as 
and as prominent as any other information in the Notice and placed on 
the same page in close proximity to the amount and the sources of the 
distribution.
    B. On the inside front cover of each report to shareholders under 
rule 30e-1 under the Act, the fund will:
    1. Describe the terms of the Plan (including the fixed amount or 
fixed percentage of the distributions and the frequency of the 
distributions);
    2. Include the disclosure required by condition II.A.2.a above;
    3. State, if applicable, that the Plan provides that the Board may 
amend or terminate the Plan at any time without prior notice to fund 
shareholders; and
    4. Describe any reasonably foreseeable circumstances that might 
cause the fund to terminate the Plan and any reasonably foreseeable 
consequences of such termination.
    C. Each report provided to shareholders under rule 30e-1 and each 
prospectus filed with the Commission

[[Page 17240]]

on Form N-2 under the Act will provide the fund's total return in 
relation to changes in NAV in the financial highlights table and in any 
discussion about the fund's total return.

III. Disclosure to Stockholders, Prospective Stockholders and Third 
Parties

    A. The fund will include the information contained in the relevant 
Notice, including the disclosure required by condition II.A.2 above, in 
any written communication (other than a Form 1099) about the Plan or 
distributions under the Plan by the fund, or agents that the fund has 
authorized to make such communication on the fund's behalf, to any fund 
common stockholder, prospective common stockholder or third-party 
information provider;
    B. The fund will issue, contemporaneously with the issuance of any 
Notice, a press release containing the information in the Notice and 
will file with the Commission the information contained in such Notice, 
including the disclosure required by condition II.A.2 above, as an 
exhibit to its next filed Form N-CSR; and
    C. The fund will post prominently a statement on its (or its 
adviser's) Web site containing the information in each Notice, 
including the disclosure required by condition II.A.2 above, and will 
maintain such information on such Web site for at least 24 months.

IV. Delivery of 19(a) Notices to Beneficial Owners

    If a broker, dealer, bank or other person (``financial 
intermediary'') holds common stock issued by the fund in nominee name, 
or otherwise, on behalf of a beneficial owner, the fund: (a) Will 
request that the financial intermediary, or its agent, forward the 
Notice to all beneficial owners of the fund's stock held through such 
financial intermediary; (b) will provide, in a timely manner, to the 
financial intermediary, or its agent, enough copies of the Notice 
assembled in the form and at the place that the financial intermediary, 
or its agent, reasonably requests to facilitate the financial 
intermediary's sending of the Notice to each beneficial owner of the 
fund's stock; and (c) upon the request of any financial intermediary, 
or its agent, that receives copies of the Notice, will pay the 
financial intermediary, or its agent, the reasonable expenses of 
sending the Notice to such beneficial owners.

V. Additional Board Determinations for Funds Whose Common Stock Trades 
at a Premium If

    A. The fund's common stock has traded on the exchange that it 
primarily trades on at the time in question at an average premium to 
NAV equal to or greater than 10%, as determined on the basis of the 
average of the discount or premium to NAV of the fund's common stock as 
of the close of each trading day over a 12-week rolling period (each 
such 12-week rolling period ending on the last trading day of each 
week); and
    B. The fund's annualized distribution rate for such 12-week rolling 
period, expressed as a percentage of NAV as of the ending date of such 
12-week rolling period, is greater than the fund's average annual total 
return in relation to the change in NAV over the 2-year period ending 
on the last day of such 12-week rolling period; then:
    1. At the earlier of the next regularly scheduled meeting or within 
four months of the last day of such 12-week rolling period, the Board 
including a majority of the Independent Members of the Board:
    (a) Will request and evaluate, and the Adviser will furnish, such 
information as may be reasonably necessary to make an informed 
determination of whether the Plan should be continued or continued 
after amendment;
    (b) Will determine whether continuation, or continuation after 
amendment, of the Plan is consistent with the fund's investment 
objective(s) and policies and in the best interests of the fund and its 
stockholders, after considering the information in condition V.B.1.a 
above; including, without limitation:
    (1) Whether the Plan is accomplishing its purpose(s);
    (2) The reasonably foreseeable effects of the Plan on the fund's 
long-term total return in relation to the market price and NAV of the 
fund's common stock; and
    (3) The fund's current distribution rate, as described in condition 
V.B above, compared to with the fund's average annual total return over 
the 2-year period, as described in condition V.B, or such longer period 
as the Board deems appropriate; and
    (c) Based upon that determination, will approve or disapprove the 
continuation, or continuation after amendment, of the Plan; and
    2. The Board will record the information considered by it and the 
basis for its approval or disapproval of the continuation, or 
continuation after amendment, of the Plan in its meeting minutes, which 
must be made and preserved for a period of not less than six years from 
the date of such meeting, the first two years in an easily accessible 
place.

VI. Public Offerings

    The fund will not make a public offering of the fund's common stock 
other than:
    A. A rights offering below net asset value to holders of the fund's 
common stock;
    B. An offering in connection with a dividend reinvestment plan, 
merger, consolidation, acquisition, spin-off or reorganization of the 
fund; or
    C. An offering other than an offering described in conditions VI.A 
and VI.B above, unless, with respect to such other offering:
    1. The fund's annualized distribution rate for the six months 
ending on the last day of the month ended immediately prior to the most 
recent distribution declaration date,\4\ expressed as a percentage of 
NAV per share as of such date, is no more than 1 percentage point 
greater than the fund's average annual total return for the 5-year 
period ending on such date; \5\ and
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    \4\ If the fund has been in operation fewer than six months, the 
measured period will begin immediately following the fund's first 
public offering.
    \5\ If the fund has been in operation fewer than five years, the 
measured period will begin immediately following the fund's first 
public offering.
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    2. The transmittal letter accompanying any registration statement 
filed with the Commission in connection with such offering discloses 
that the fund has received an order under section 19(b) to permit it to 
make periodic distributions of long-term capital gains with respect to 
its common stock as frequently as twelve times each year, and as 
frequently as distributions are specified in accordance with the terms 
of any outstanding preferred stock that such fund may issue.

VII. Amendments to Rule 19b-1

    The requested relief will expire on the effective date of any 
amendment to rule 19b-1 that provides relief permitting certain closed-
end investment companies to make periodic distributions of long-term 
capital gains with respect to their outstanding common stock as 
frequently as twelve times each year.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-8428 Filed 4-13-09; 8:45 am]
BILLING CODE 8010-01-P