UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21280
Name of Fund: BlackRock Credit Allocation Income Trust III (BPP)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock
Credit Allocation Income Trust III, 55 East 52
nd
Street, New York, NY 10055.
Registrant’s telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 10/31/2010
Date of reporting period: 07/31/2010
Item 1 – Schedule of Investments
Schedule of Investments
July 31, 2010 (Unaudited)
BlackRock Credit Allocation Income Trust III (BPP)
(Percentages shown are based on Net Assets)
|
|
|
|
|
|
Common Stocks
|
|
Shares
|
Value
|
|
Specialty Retail — 0.0%
|
|
|
|
|
Lazydays RV Center, Inc. (a)
|
|
8,575
|
$ 43,818
|
|
Total Common Stocks – 0.0%
|
|
|
43,818
|
|
|
|
Par
|
|
|
Corporate Bonds
|
|
(000)
|
|
|
Aerospace & Defense — 2.5%
|
|
|
|
|
BE Aerospace, Inc., 8.50%,
|
|
|
|
|
7/01/18
|
$ 1,215
|
1,321,313
|
|
Bombardier, Inc., 7.75%,
|
|
|
|
|
3/15/20 (b)
|
|
1,405
|
1,513,887
|
|
United Technologies Corp., 5.70%,
|
|
|
|
4/15/40
|
|
2,500
|
2,795,147
|
|
|
|
|
5,630,347
|
|
Airlines — 0.7%
|
|
|
|
|
Continental Airlines Pass-Through
|
|
|
|
Certificates, Series 2009-2,
|
|
|
|
|
Class B, 9.25%, 5/10/17
|
|
775
|
815,687
|
|
Delta Air Lines, Inc., Series 02G1,
|
|
|
|
6.72%, 7/02/24
|
|
656
|
628,340
|
|
|
|
|
1,444,027
|
|
Auto Components — 0.6%
|
|
|
|
|
Icahn Enterprises LP:
|
|
|
|
|
7.75%, 1/15/16
|
|
420
|
421,050
|
|
8.00%, 1/15/18
|
|
1,000
|
997,500
|
|
|
|
|
1,418,550
|
|
Beverages — 0.5%
|
|
|
|
|
Constellation Brands, Inc., 7.25%,
|
|
|
|
5/15/17
|
|
955
|
993,200
|
|
Building Products — 0.1%
|
|
|
|
|
Building Materials Corp. of
|
|
|
|
|
America, 7.00%, 2/15/20 (b)
|
250
|
251,875
|
|
Capital Markets — 0.7%
|
|
|
|
|
Ameriprise Financial, Inc., 5.30%,
|
|
|
|
3/15/20
|
|
1,500
|
1,604,213
|
|
Chemicals — 0.3%
|
|
|
|
|
CF Industries, Inc., 7.13%,
|
|
|
|
|
5/01/20
|
|
525
|
560,438
|
|
Commercial Banks — 0.6%
|
|
|
|
|
RESPARCS Funding LP I,
|
|
|
|
|
8.00% (a)(c)(d)
|
|
4,000
|
1,310,000
|
|
Commercial Services &
|
|
|
|
|
Supplies — 3.0%
|
|
|
|
|
Browning-Ferris Industries, Inc.,
|
|
|
|
7.40%, 9/15/35
|
|
1,824
|
2,183,424
|
|
|
|
|
|
|
Par
|
|
|
Corporate Bonds
|
(000)
|
Value
|
|
Commercial Services & Supplies
|
|
|
|
(concluded)
|
|
|
|
Clean Harbors, Inc., 7.63%,
|
|
|
|
8/15/16
|
$ 700
|
$ 722,750
|
|
Corrections Corp. of America,
|
|
|
|
7.75%, 6/01/17
|
1,600
|
1,708,000
|
|
Waste Management, Inc., 6.13%,
|
|
|
|
11/30/39
|
1,950
|
2,087,600
|
|
|
|
6,701,774
|
|
Communications
|
|
|
|
Equipment — 0.9%
|
|
|
|
Brocade Communications
|
|
|
|
Systems, Inc., 6.88%,
|
|
|
|
1/15/20 (b)
|
1,450
|
1,482,625
|
|
CC Holdings GS V LLC, 7.75%,
|
|
|
|
5/01/17 (b)
|
440
|
480,700
|
|
|
|
1,963,325
|
|
Consumer Finance — 3.9%
|
|
|
|
Capital One Bank USA NA, 8.80%,
|
|
|
|
7/15/19
|
1,625
|
2,068,490
|
|
Inmarsat Finance Plc, 7.38%,
|
|
|
|
12/01/17 (b)
|
1,020
|
1,045,500
|
|
SLM Corp., 4.00%, 7/25/14 (e)
|
6,600
|
5,583,468
|
|
|
|
8,697,458
|
|
Containers & Packaging — 1.2%
|
|
|
|
Ball Corp.:
|
|
|
|
7.13%, 9/01/16
|
850
|
913,750
|
|
6.75%, 9/15/20
|
1,070
|
1,123,500
|
|
Impress Holdings BV, 3.65%,
|
|
|
|
9/15/13 (b)(e)
|
240
|
227,400
|
|
Owens-Brockway Glass Container,
|
|
|
|
Inc., 6.75%, 12/01/14
|
270
|
274,725
|
|
Rock-Tenn Co., 9.25%, 3/15/16
|
150
|
162,937
|
|
|
|
2,702,312
|
|
Diversified Financial
|
|
|
|
Services — 3.4%
|
|
|
|
Bank of America Corp.:
|
|
|
|
7.63%, 6/01/19
|
2,320
|
2,711,423
|
|
5.63%, 7/01/20
|
3,590
|
3,704,241
|
|
GMAC, Inc., 8.30%, 2/12/15 (b)
|
1,000
|
1,052,500
|
|
|
|
7,468,164
|
|
Diversified Telecommunication
|
|
|
|
Services — 4.1%
|
|
|
|
AT&T Inc., 6.30%, 1/15/38
|
2,000
|
2,226,130
|
|
New Communications Holdings,
|
|
|
|
Inc., 8.50%, 4/15/20 (b)
|
1,500
|
1,601,250
|
|
Qwest Corp., 8.38%, 5/01/16
|
1,360
|
1,547,000
|
|
Verizon Communications, Inc.,
|
|
|
|
7.35%, 4/01/39
|
1,950
|
2,461,479
|
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated
according to the following list:
GO
General Obligation Bonds
RB
Revenue Bonds
BLACKROCK CREDIT ALLOCATION INCOME TRUST III
JULY 31, 2010
1
Schedule of Investments
(continued)
BlackRock Credit Allocation Income Trust III (BPP)
(Percentages shown are based on Net Assets)
|
|
|
|
|
|
|
|
Par
|
|
|
Corporate Bonds
|
|
(000)
|
Value
|
|
Diversified Telecommunication Services
|
|
|
|
(concluded)
|
|
|
|
|
Windstream Corp.:
|
|
|
|
|
8.63%, 8/01/16
|
$ 320
|
$
333,600
|
|
7.88%, 11/01/17
|
|
900
|
915,750
|
|
|
|
|
9,085,209
|
|
Electric Utilities — 1.8%
|
|
|
|
|
Progress Energy Inc., 7.00%,
|
|
|
|
|
10/30/31
|
|
2,000
|
2,430,950
|
|
Southern California Edison Co.,
|
|
|
|
|
5.50%, 3/15/40
|
|
1,400
|
1,531,166
|
|
|
|
|
3,962,116
|
|
Electronic Equipment, Instruments
|
|
|
|
|
& Components — 0.2%
|
|
|
|
|
Jabil Circuit Inc., 8.25%, 3/15/18
|
|
400
|
436,000
|
|
Energy Equipment &
|
|
|
|
|
Services — 2.1%
|
|
|
|
|
Compagnie Generale de
|
|
|
|
|
Geophysique-Veritas, 7.75%,
|
|
|
|
|
5/15/17
|
|
555
|
541,125
|
|
Halliburton Co., 7.45%, 9/15/39
|
|
2,945
|
3,753,220
|
|
Hornbeck Offshore Services, Inc.,
|
|
|
|
|
Series B, 6.13%, 12/01/14
|
|
500
|
448,750
|
|
|
|
|
4,743,095
|
|
Food & Staples Retailing — 3.5%
|
|
|
|
|
CVS Caremark Corp., 6.30%,
|
|
|
|
|
6/01/62 (e)
|
|
3,100
|
2,852,000
|
|
Wal-Mart Stores, Inc.:
|
|
|
|
|
5.25%, 9/01/35
|
|
1,850
|
1,926,427
|
|
6.20%, 4/15/38
|
|
2,500
|
2,930,213
|
|
|
|
|
7,708,640
|
|
Food Products — 1.0%
|
|
|
|
|
Kraft Foods, Inc.:
|
|
|
|
|
6.50%, 8/11/17
|
|
800
|
943,379
|
|
6.13%, 8/23/18
|
|
800
|
930,386
|
|
Smithfield Foods, Inc., 10.00%,
|
|
|
|
|
7/15/14 (b)
|
|
350
|
391,125
|
|
|
|
|
2,264,890
|
|
Gas Utilities — 1.0%
|
|
|
|
|
Nisource Finance Corp., 6.13%,
|
|
|
|
|
3/01/22
|
|
1,950
|
2,146,347
|
|
Health Care Equipment &
|
|
|
|
|
Supplies — 1.6%
|
|
|
|
|
Fresenius US Finance II, Inc.,
|
|
|
|
|
9.00%, 7/15/15 (b)
|
|
1,000
|
1,120,000
|
|
Medtronic, Inc.:
|
|
|
|
|
6.50%, 3/15/39
|
|
300
|
369,135
|
|
5.55%, 3/15/40
|
|
1,765
|
1,963,984
|
|
|
|
|
3,453,119
|
|
Health Care Providers &
|
|
|
|
|
Services — 3.5%
|
|
|
|
|
Aetna, Inc., 6.75%, 12/15/37
|
|
1,725
|
1,955,688
|
|
HCA, Inc.:
|
|
|
|
|
8.50%, 4/15/19
|
|
800
|
884,000
|
|
7.25%, 9/15/20
|
|
1,250
|
1,321,875
|
|
Tenet Healthcare Corp. (b):
|
|
|
|
|
10.00%, 5/01/18
|
|
745
|
846,506
|
|
8.88%, 7/01/19
|
|
550
|
605,000
|
|
|
|
|
|
|
Par
|
|
|
Corporate Bonds
|
(000)
|
Value
|
|
Health Care Providers & Services
|
|
|
|
(concluded)
|
|
|
|
UnitedHealth Group, Inc., 6.88%,
|
|
|
|
2/15/38
|
$ 1,725
|
$ 2,002,197
|
|
|
|
7,615,266
|
|
Household Durables — 0.3%
|
|
|
|
Cemex Espana Luxembourg,
|
|
|
|
9.25%, 5/12/20 (b)
|
723
|
648,893
|
|
Insurance — 4.8%
|
|
|
|
Liberty Mutual Group, Inc., 6.70%,
|
|
|
|
8/15/16 (b)
|
610
|
636,203
|
|
Lincoln National Corp., 6.25%,
|
|
|
|
2/15/20
|
1,725
|
1,840,849
|
|
Northwestern Mutual Life
|
|
|
|
Insurance, 6.06%, 3/30/40 (b)
|
1,800
|
2,004,912
|
|
Principal Financial Group, Inc.,
|
|
|
|
8.88%, 5/15/19
|
475
|
593,310
|
|
Prudential Financial, Inc., 6.63%,
|
|
|
|
12/01/37
|
1,725
|
1,849,335
|
|
QBE Insurance Group Ltd., 9.75%,
|
|
|
|
3/14/14 (b)
|
2,975
|
3,606,375
|
|
|
|
10,530,984
|
|
Life Sciences Tools &
|
|
|
|
Services — 1.9%
|
|
|
|
Bio-Rad Laboratories, Inc., 8.00%,
|
|
|
|
9/15/16
|
1,830
|
1,958,100
|
|
Life Technologies Corp., 6.00%,
|
|
|
|
3/01/20
|
2,000
|
2,205,014
|
|
|
|
4,163,114
|
|
Machinery — 1.7%
|
|
|
|
AGY Holding Corp., 11.00%,
|
|
|
|
11/15/14
|
390
|
331,500
|
|
Ingersoll-Rand Global Holding Co.,
|
|
|
|
Ltd., 9.50%, 4/15/14
|
1,725
|
2,130,744
|
|
Navistar International Corp.,
|
|
|
|
8.25%, 11/01/21
|
1,245
|
1,316,588
|
|
|
|
3,778,832
|
|
Media — 9.5%
|
|
|
|
CMP Susquehanna Corp., 3.64%,
|
|
|
|
5/15/14 (a)(b)(d)
|
9
|
180
|
|
CSC Holdings LLC:
|
|
|
|
8.50%, 6/15/15
|
800
|
861,000
|
|
8.63%, 2/15/19
|
580
|
633,650
|
|
Comcast Corp., 6.30%, 11/15/17
|
1,725
|
1,996,091
|
|
Comcast Holdings Corp., 2.00%,
|
|
|
|
11/15/29 (f)
|
110
|
3,119,414
|
|
Cox Communications, Inc., 8.38%,
|
|
|
|
3/01/39 (b)
|
1,725
|
2,311,110
|
|
DISH DBS Corp.:
|
|
|
|
7.00%, 10/01/13
|
850
|
884,000
|
|
7.88%, 9/01/19
|
550
|
584,375
|
|
Gannett Co., Inc., 9.38%,
|
|
|
|
11/15/17 (b)
|
900
|
976,500
|
|
Intelsat Corp., 9.25%, 6/15/16
|
850
|
907,375
|
|
News America, Inc., 6.15%,
|
|
|
|
3/01/37
|
2,000
|
2,105,362
|
|
Time Warner Cable, Inc., 6.75%,
|
|
|
|
6/15/39
|
1,950
|
2,220,802
|
|
Time Warner, Inc., 7.70%,
|
|
|
|
5/01/32
|
2,000
|
2,444,016
|
2 BLACKROCK CREDIT ALLOCATION INCOME TRUST III
JULY 31, 2010
Schedule of Investments
(continued)
BlackRock Credit Allocation Income Trust III (BPP)
(Percentages shown are based on Net Assets)
|
|
|
|
|
|
Par
|
|
|
Corporate Bonds
|
(000)
|
Value
|
|
Media (concluded)
|
|
|
|
UPC Germany GmbH, 8.13%,
|
|
|
|
12/01/17 (b)
|
$ 505
|
$ 516,363
|
|
Virgin Media Secured Finance Plc,
|
|
|
|
6.50%, 1/15/18 (b)
|
1,300
|
1,345,500
|
|
|
|
20,905,738
|
|
Metals & Mining — 1.5%
|
|
|
|
AK Steel Corp., 7.63%, 5/15/20
|
500
|
501,875
|
|
Phelps Dodge Corp., 7.13%,
|
|
|
|
11/01/27
|
1,400
|
1,516,056
|
|
Teck Resources Ltd., 10.75%,
|
|
|
|
5/15/19
|
850
|
1,061,480
|
|
United States Steel Corp., 7.38%,
|
|
|
|
4/01/20
|
175
|
175,437
|
|
|
|
3,254,848
|
|
Multi-Utilities — 1.6%
|
|
|
|
CenterPoint Energy, Inc.:
|
|
|
|
5.95%, 2/01/17
|
1,500
|
1,625,034
|
|
6.50%, 5/01/18
|
1,600
|
1,800,754
|
|
|
|
3,425,788
|
|
Multiline Retail — 2.6%
|
|
|
|
Dollar General Corp., 10.63%,
|
|
|
|
7/15/15
|
1,550
|
1,705,000
|
|
JC Penney Co., Inc., 5.65%,
|
|
|
|
6/01/20
|
4,100
|
4,120,500
|
|
|
|
5,825,500
|
|
Oil, Gas & Consumable
|
|
|
|
Fuels — 4.3%
|
|
|
|
BP Capital Markets Plc, 3.88%,
|
|
|
|
3/10/15
|
700
|
669,171
|
|
Chesapeake Energy Corp., 6.25%,
|
|
|
|
1/15/18
|
500
|
511,250
|
|
Enbridge Energy Partners LP,
|
|
|
|
9.88%, 3/01/19
|
1,000
|
1,344,271
|
|
Enterprise Products Operating LLC,
|
|
|
|
6.65%, 4/15/18
|
2,000
|
2,319,632
|
|
Kinder Morgan Energy Partners LP,
|
|
|
|
6.85%, 2/15/20
|
2,000
|
2,369,502
|
|
ONEOK Partners LP, 8.63%,
|
|
|
|
3/01/19
|
1,725
|
2,211,326
|
|
|
|
9,425,152
|
|
Paper & Forest Products — 3.1%
|
|
|
|
Georgia-Pacific LLC, 8.25%,
|
|
|
|
5/01/16 (b)
|
1,635
|
1,773,975
|
|
International Paper Co.:
|
|
|
|
7.50%, 8/15/21
|
1,625
|
1,949,363
|
|
8.70%, 6/15/38
|
900
|
1,184,775
|
|
7.30%, 11/15/39
|
1,725
|
1,977,023
|
|
|
|
6,885,136
|
|
Pharmaceuticals — 8.3%
|
|
|
|
Abbott Laboratories:
|
|
|
|
6.15%, 11/30/37
|
235
|
276,972
|
|
6.00%, 4/01/39
|
2,777
|
3,225,497
|
|
Bristol-Myers Squibb Co.:
|
|
|
|
5.88%, 11/15/36
|
1,994
|
2,244,311
|
|
6.13%, 5/01/38
|
588
|
686,627
|
|
Eli Lilly & Co., 5.95%, 11/15/37
|
588
|
673,224
|
|
GlaxoSmithKline Capital, Inc.,
|
|
|
|
6.38%, 5/15/38
|
3,460
|
4,163,927
|
|
|
|
|
|
|
Par
|
|
|
Corporate Bonds
|
(000)
|
Value
|
|
Pharmaceuticals (concluded)
|
|
|
|
Merck & Co., Inc., 6.50%,
|
|
|
|
12/01/33
|
$ 990
|
$ 1,209,135
|
|
Pfizer, Inc., 7.20%, 3/15/39
|
2,500
|
3,355,705
|
|
Schering-Plough Corp., 6.55%,
|
|
|
|
9/15/37
|
1,979
|
2,473,908
|
|
|
|
18,309,306
|
|
Professional Services — 0.0%
|
|
|
|
FTI Consulting, Inc., 7.75%,
|
|
|
|
10/01/16
|
100
|
103,625
|
|
Real Estate Investment Trusts
|
|
|
|
(REITs) — 2.5%
|
|
|
|
AvalonBay Communities, Inc.,
|
|
|
|
6.10%, 3/15/20
|
1,725
|
1,951,684
|
|
ERP Operating LP:
|
|
|
|
5.38%, 8/01/16
|
1,625
|
1,764,313
|
|
5.75%, 6/15/17
|
1,715
|
1,895,771
|
|
|
|
5,611,768
|
|
Semiconductors & Semiconductor
|
|
|
|
Equipment — 1.2%
|
|
|
|
Advanced Micro Devices, Inc.,
|
|
|
|
7.75%, 8/01/20 (b)(g)
|
400
|
404,000
|
|
KLA-Tencor Corp., 6.90%, 5/01/18
|
918
|
1,027,362
|
|
National Semiconductor Corp.,
|
|
|
|
6.60%, 6/15/17
|
1,123
|
1,267,073
|
|
|
|
2,698,435
|
|
Specialty Retail — 1.0%
|
|
|
|
AutoNation, Inc., 6.75%, 4/15/18
|
940
|
947,050
|
|
AutoZone, Inc., 7.13%, 8/01/18
|
650
|
772,596
|
|
Ltd. Brands, Inc., 7.00%, 5/01/20
|
470
|
485,275
|
|
|
|
2,204,921
|
|
Tobacco — 3.3%
|
|
|
|
Altria Group, Inc.:
|
|
|
|
9.70%, 11/10/18
|
1,725
|
2,260,022
|
|
9.25%, 8/06/19
|
1,600
|
2,058,605
|
|
10.20%, 2/06/39
|
2,150
|
3,036,617
|
|
|
|
7,355,244
|
|
Wireless Telecommunication
|
|
|
|
Services — 0.7%
|
|
|
|
Cricket Communications, Inc.,
|
|
|
|
7.75%, 5/15/16
|
325
|
336,375
|
|
Nextel Communications, Inc.,
|
|
|
|
Series E, 6.88%, 10/31/13
|
1,105
|
1,099,475
|
|
|
|
1,435,850
|
|
Total Corporate Bonds – 85.5%
|
|
188,723,499
|
|
Investment Companies
|
Shares
|
|
|
ProShares UltraShort Real Estate
|
12,000
|
282,960
|
|
Total Investment Companies – 0.1%
|
|
282,960
|
BLACKROCK CREDIT ALLOCATION INCOME TRUST III
JULY 31, 2010
3
Schedule of Investments
(continued)
BlackRock Credit Allocation Income Trust III (BPP)
(Percentages shown are based on Net Assets)
|
|
|
|
|
|
Preferred Securities
|
|
|
|
|
|
|
Par
|
|
|
Capital Trusts
|
|
(000)
|
Value
|
|
Capital Markets — 3.7%
|
|
|
|
|
State Street Capital Trust III,
|
|
|
|
|
8.25% (c)(e)
|
$ 1,385
|
$ 1,405,706
|
|
State Street Capital Trust IV,
|
|
|
|
|
1.54%, 6/01/67 (e)
|
|
9,675
|
6,717,807
|
|
|
|
|
8,123,513
|
|
Commercial Banks — 7.0%
|
|
|
|
|
Barclays Bank Plc, 5.93% (b)(c)(e)
|
|
890
|
749,825
|
|
CBA Capital Trust I, 5.81% (b)(c)
|
|
5,000
|
4,982,000
|
|
FCB/NC Capital Trust I, 8.05%,
|
|
|
|
|
3/01/28
|
|
1,100
|
1,062,207
|
|
NBP Capital Trust III, 7.38% (c)
|
|
2,000
|
1,560,000
|
|
National City Preferred Capital
|
|
|
|
|
Trust I, 12.00% (c)(e)
|
|
600
|
666,780
|
|
SunTrust Preferred Capital I,
|
|
|
|
|
5.85% (c)(e)
|
|
303
|
203,010
|
|
USB Capital XIII Trust, 6.63%,
|
|
|
|
|
12/15/39
|
|
1,725
|
1,806,558
|
|
Wells Fargo Capital XIII,
|
|
|
|
|
Series GMTN, 7.70% (c)(e)
|
|
1,700
|
1,742,500
|
|
Westpac Capital Trust IV,
|
|
|
|
|
5.26% (b)(c)(e)
|
|
3,000
|
2,778,570
|
|
|
|
|
15,551,450
|
|
Consumer Finance — 0.8%
|
|
|
|
|
Capital One Capital V, 10.25%, 8/15/39
|
1,570
|
1,699,525
|
|
Diversified Financial
|
|
|
|
|
Services — 4.4%
|
|
|
|
|
JPMorgan Chase Capital XXI,
|
|
|
|
|
Series U, 1.42%, 1/15/87 (e)
|
|
7,125
|
5,258,663
|
|
JPMorgan Chase Capital XXIII,
|
|
|
|
|
1.44%, 5/15/77 (e)
|
|
6,190
|
4,429,180
|
|
|
|
|
9,687,843
|
|
Electric Utilities — 0.3%
|
|
|
|
|
PPL Capital Funding, 6.70%,
|
|
|
|
|
3/30/67 (e)
|
|
900
|
803,250
|
|
Insurance — 6.1%
|
|
|
|
|
AXA SA, 6.38% (b)(c)(e)
|
|
900
|
715,500
|
|
The Allstate Corp., 6.50%,
|
|
|
|
|
5/15/67 (e)
|
|
900
|
823,500
|
|
Chubb Corp., 6.38%, 3/29/67 (e)
|
|
900
|
877,500
|
|
Liberty Mutual Group, Inc.,
|
|
|
|
|
10.75%, 6/15/88 (b)(e)
|
|
900
|
985,500
|
|
Lincoln National Corp., 7.00%,
|
|
|
|
|
5/17/66 (e)
|
|
900
|
813,960
|
|
MetLife, Inc., 6.40%, 12/15/66
|
|
900
|
834,750
|
|
Nationwide Life Global Funding I,
|
|
|
|
|
6.75%, 5/15/67
|
|
900
|
721,710
|
|
Reinsurance Group of America,
|
|
|
|
|
6.75%, 12/15/65 (e)
|
|
1,300
|
1,096,725
|
|
The Travelers Cos., Inc., 6.25%,
|
|
|
|
|
3/15/67 (e)
|
|
900
|
852,965
|
|
White Mountains Re Group Ltd.,
|
|
|
|
|
7.51% (b)(c)(e)
|
|
2,600
|
2,070,640
|
|
ZFS FinanceT (USA) (b)(e):
|
|
|
|
|
Trust IV, 5.88%, 5/09/32
|
|
190
|
169,077
|
|
Trust V, 6.50%, 5/09/67
|
|
2,209
|
2,010,190
|
|
Zenith National Insurance Capital
|
|
|
|
|
Trust I, 8.55%, 8/01/28 (b)
|
|
1,800
|
1,548,000
|
|
|
|
|
13,520,017
|
|
|
|
|
|
|
Par
|
|
|
Capital Trusts
|
(000)
|
Value
|
|
Multi-Utilities — 0.4%
|
|
|
|
Puget Sound Energy, Inc., Series A,
|
|
|
|
6.97%, 6/01/67 (e)
|
$ 925
|
$ 861,453
|
|
Oil, Gas & Consumable
|
|
|
|
Fuels — 0.4%
|
|
|
|
TransCanada PipeLines Ltd.,
|
|
|
|
6.35%, 5/15/67 (e)
|
900
|
819,000
|
|
Total Capital Trusts – 23.1%
|
|
51,066,051
|
|
Preferred Stocks
|
Shares
|
|
|
Capital Markets — 0.0%
|
|
|
|
Lehman Brothers Holdings Inc.,
|
|
|
|
Series D, 5.67% (c)(d)
|
31,100
|
933
|
|
Commercial Banks — 2.0%
|
|
|
|
Banesto Holdings, Ltd., Series A,
|
|
|
|
10.50% (b)
|
30,000
|
765,939
|
|
Union Planter Preferred Funding
|
|
|
|
Corp., 7.75%
|
60
|
3,673,125
|
|
|
|
4,439,064
|
|
Electric Utilities — 0.6%
|
|
|
|
Alabama Power Co., 6.50%
|
50,000
|
1,295,000
|
|
Insurance — 3.6%
|
|
|
|
Aspen Insurance Holdings Ltd.,
|
|
|
|
7.40% (e)
|
85,452
|
1,905,580
|
|
Prudential Plc:
|
|
|
|
6.50%
|
30,000
|
729,300
|
|
6.50% (c)
|
6,000,000
|
5,205,000
|
|
|
|
7,839,880
|
|
Media — 0.0%
|
|
|
|
CMP Susquehanna Radio Holdings
|
|
|
|
Corp. (a)(b)(e)
|
2,052
|
—
|
|
Real Estate Investment Trusts
|
|
|
|
(REITs) — 1.4%
|
|
|
|
SunTrust Real Estate Investment
|
|
|
|
Trust, 9.00%
|
30
|
3,027,189
|
|
Specialty Retail — 0.1%
|
|
|
|
Lazydays RV Center, Inc. (a)
|
182
|
216,716
|
|
Total Preferred Stocks – 7.7%
|
|
16,818,782
|
|
Total Preferred Securities – 30.8%
|
|
67,884,833
|
|
|
Par
|
|
|
Taxable Municipal Bonds
|
(000)
|
|
|
Metropolitan Transportation
|
|
|
|
Authority, RB, Build America
|
|
|
|
Bonds, 6.55%, 11/15/31
|
$ 1,675
|
1,724,731
|
|
State of California, GO, Build
|
|
|
|
America Bonds, 7.35%,
|
|
|
|
11/01/39
|
825
|
865,714
|
4 BLACKROCK CREDIT ALLOCATION INCOME TRUST III
JULY 31, 2010
Schedule of Investments
(continued)
BlackRock Credit Allocation Income Trust III (BPP)
(Percentages shown are based on Net Assets)
|
|
|
|
|
|
|
|
Par
|
|
|
Taxable Municipal Bonds
|
|
(000)
|
Value
|
|
State of Illinois, GO, Pension,
|
|
|
|
|
5.10%, 6/01/33
|
$ 1,675
|
$ 1,366,247
|
|
Total Taxable Municipal Bonds – 1.8%
|
|
3,956,692
|
|
U.S. Treasury Obligations
|
|
|
|
|
U.S. Treasury Notes, 1.75%,
|
|
|
|
|
7/31/15
|
|
22,000
|
22,161,480
|
|
Total U.S. Treasury Obligations – 10.1%
|
|
22,161,480
|
|
Warrants (h)
|
|
Shares
|
|
|
Media — 0.0%
|
|
|
|
|
CMP Susquehanna Radio Holdings
|
|
|
|
Corp. (Expires 3/26/19) (b)
|
|
2,345
|
—
|
|
Total Warrants – 0.0%
|
|
|
—
|
|
Total Long-Term Investments
|
|
|
|
|
(Cost – $291,124,876) – 128.3%
|
|
|
283,053,282
|
|
Short-Term Securities
|
|
|
|
|
BlackRock Liquidity Funds,
|
|
|
|
|
TempFund, Institutional Class,
|
|
|
|
|
0.23% (i)(j)
|
|
21,929,030
|
21,929,030
|
|
Total Short-Term Securities
|
|
|
|
|
(Cost – $21,929,030) – 9.9%
|
|
|
21,929,030
|
|
Total Investments
|
|
|
|
|
(Cost – $313,053,906*) – 138.2%
|
|
304,982,312
|
|
Liabilities in Excess of Other Assets – (6.3)%
|
(13,894,614)
|
|
Preferred Shares at Redemption Value – (31.9)%
|
(70,429,023)
|
|
Net Assets Applicable to Common Shares – 100.0%
|
$ 220,658,675
|
________________________________________________________________________________________________________________________________________________________________________________________________________________________
* The cost and unrealized appreciation (depreciation) of investments as of
July 31, 2010, as computed for federal income tax purposes, were as
|
|
|
|
Aggregate follows: cost
|
$ 315,314,298
|
|
Gross unrealized appreciation
|
$ 11,672,319
|
|
Gross Net unrealized unrealized depreciation depreciation
|
$ (22,004,305) (10,331,986)
|
(a) Non-income producing security.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration to qualified institutional investors.
(c) Security is perpetual in nature and has no stated maturity date.
(d) Issuer filed for bankruptcy and/or is in default of interest payments.
(e) Variable rate security. Rate shown is as of report date.
(f) Convertible security.
(g) When-issued security. Unsettled when-issued transactions were as
follows:
|
|
|
|
|
|
|
Unrealized
|
|
Counterparty
|
Value
|
Appreciation
|
|
JPMorgan Securities, Inc.
|
$ 404,000
|
$
4,000
|
(h) Warrants entitle the Fund to purchase a predetermined number of shares
of common stock and are non-income producing. The purchase price and
number of shares are subject to adjustment under certain conditions
until the expiration date.
(i) Investments in companies considered to be an affiliate of the Fund
during the period, for purposes of Section 2(a)(3) of the Investment
Company Act of 1940, as amended, are as follows:
|
|
|
|
|
|
|
|
|
|
Shares Held
|
|
Shares Held
|
|
|
|
at October
|
Net
|
at July 31,
|
|
|
Affiliate
|
31, 2009
|
Activity
|
2010
|
Income
|
|
|
BlackRock
|
|
|
|
|
|
|
Liquidity Funds,
|
|
|
|
|
|
|
TempFund,
|
|
|
|
|
|
|
Institutional
|
|
|
|
|
|
|
Class
|
51,450,797
|
(29,521,767)
|
21,929,030 $44,895
|
|
(j)
|
Represents the current yield as of report date.
|
|
|
|
•
|
For Fund compliance purposes, the Fund's industry classifications refer
|
|
|
to any one or more of the industry sub-classifications used by one or
|
|
|
more widely recognized market indexes or rating group indexes, and/or
|
|
|
as defined by Fund management. This definition may not apply for
|
|
|
purposes of this report, which may combine such industry sub-
|
|
|
classifications for reporting ease.
|
|
|
|
• Financial futures contracts purchased as of July 31, 2010 were as follows:
|
|
|
|
|
|
|
|
|
Expiration
|
Face
|
Unrealized
|
|
Contracts
|
Issue
|
Date
|
Value
|
Appreciation
|
|
12
|
30-Year U.S.
|
September
|
|
|
|
|
Treasury Bond
|
2010
|
$
1,492,596
|
52,029
|
BLACKROCK CREDIT ALLOCATION INCOME TRUST III
JULY 31, 2010
5
Schedule of Investments
(continued)
BlackRock Credit Allocation Income Trust III (BPP)
|
|
|
|
|
|
|
|
|
•
|
Credit default swaps on single-name issues - buy protection outstanding as of July 31, 2010 were as follows:
|
|
|
|
|
|
|
|
Notional
|
|
|
|
|
Pay Fixed
|
|
|
Amount
|
Unrealized
|
|
|
Issuer
|
Rate
|
Counterparty
|
Expiration
|
(000)
|
Depreciation
|
|
|
Nordstrom, Inc.
|
5.20%
|
Deutsche Bank AG
|
June 2014
|
$ 1,000
|
$ (160,205)
|
•Fair Value Measurements - Various inputs are used in determining the fair value of investments and
derivatives, which are as follows:
•Level 1 — price quotations in active markets/exchanges for identical assets and liabilities
•Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or
liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in
markets that are not active, inputs other than quoted prices that are observable for the assets or
liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit
risks and default rates) or other market-corroborated inputs)
•Level 3 — unobservable inputs based on the best information available in the circumstances, to the
extent observable inputs are not available (including the Fund's own assumptions used in determining
the fair value of investments and derivatives)
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk
associated with investing in those securities. For information about the Fund's policy regarding valuation
of investments and other significant accounting policies, please refer to the Fund’s most recent financial
statements as contained in its semi-annual report.
The following tables summarize the inputs used as of July 31, 2010 in determining the fair valuation of
the Fund's investments and derivatives:
|
|
|
|
|
|
|
|
|
|
|
Valuation Inputs
|
|
|
Level 1
|
|
Level 2
|
Level 3
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Investments in Securities:
|
|
|
|
|
|
|
|
Long-Term Investments:
|
|
|
|
|
|
|
|
Common Stocks
|
|
|
—
|
|
— $ 43,818
|
$ 43,818
|
|
Corporate Bonds
|
|
|
—
|
$ 188,723,319
|
180
|
188,723,499
|
|
Investment Companies
|
$ 282,960
|
|
—
|
—
|
282,960
|
|
Preferred Securities
|
|
3,929,880
|
|
60,711,047
|
3,243,906
|
67,884,833
|
|
Taxable Municipal Bonds
|
|
—
|
|
3,956,692
|
—
|
3,956,692
|
|
U.S. Treasury Obligations
|
|
—
|
|
22,161,480
|
—
|
22,161,480
|
|
Short-Term Securities
|
|
21,929,030
|
|
—
|
—
|
21,929,030
|
|
Total
|
|
|
$ 26,141,870
|
$ 275,552,538
|
$3,287,904
|
$ 304,982,312
|
|
|
|
|
|
Derivative Financial Instruments
1
|
|
|
Valuation Inputs
|
Level 1
|
Level 2
|
|
Level 3
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Equity contracts…
|
$
52,029
|
|
—
|
|
—
|
$ 52,029
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Credit contracts…
|
—
|
|
|
(160,205)
|
—
|
(160,205)
|
|
Total
|
$ 52,029
|
(160,205)
|
—
|
$ (108,176)
|
1
Derivative financial instruments are financial futures contracts and swaps, which are shown at the
unrealized appreciation/depreciation on the instrument.
6 BLACKROCK CREDIT ALLOCATION INCOME TRUST III
JULY 31, 2010
Schedule of Investments
(concluded)
BlackRock Credit Allocation Income Trust III (BPP)
The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in
determining fair value:
|
|
|
|
|
|
|
|
|
Common
|
Corporate
|
Preferred
|
|
|
|
Stocks
|
Bonds
|
Stocks
|
Total
|
|
Balance, as of October 31, 2009
|
—
|
$
12,000
|
$ 3,027,189
|
$
3,039,189
|
|
Accrued discounts/premiums
|
—
|
518
|
|
—
|
518
|
|
Realized gain (loss)
|
—
|
—
|
|
—
|
—
|
|
Change in unrealized appreciation/depreciation
1
|
—
|
1,171,920
|
|
—
|
1,171,920
|
|
Purchases
|
—
|
—
|
|
—
|
—
|
|
Sales
|
—
|
(1,184,258)
|
|
—
|
(1,184,258)
|
|
Net transfers in
2
|
$ 43,818
|
—
|
|
—
|
43,818
|
|
Net transfers out
2
|
—
|
—
|
|
216,717
|
216,717
|
|
Balance, as of July 31, 2010
|
$ 43,818
|
180
|
$
3,243,906
|
$
3,287,904
|
1
The change in unrealized appreciation/depreciation on securities still held at July 31, 2010 was $(518).
2
The Fund’s policy is to recognize transfers in and transfers out as of the end of the period of the event or the change in
circumstances that caused the transfer.
BLACKROCK CREDIT ALLOCATION INCOME TRUST III
JULY 31, 2010
7
Item 2 – Controls and Procedures
2(a) – The registrant's principal executive and principal financial officers or persons performing
similar functions have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the
“1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the
evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act
and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
2(b) – There were no changes in the registrant's internal control over financial reporting (as defined
in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter
that have materially affected, or are reasonably likely to materially affect, the registrant's
internal control over financial reporting.
Item 3 – Exhibits
Certifications – Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
BlackRock Credit Allocation Income Trust III
By:
/s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer of
BlackRock Credit Allocation Income Trust III
Date: September 27, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By:
/s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
BlackRock Credit Allocation Income Trust III
Date: September 27, 2010
By:
/s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Credit Allocation Income Trust III
Date: September 27, 2010
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