BlackRock Income Trust : CEF Quarterly Market Update

Closed-end funds finish the year strong

Fourth quarter 2019

Closed-end fund market overview

Global equity markets finished the year strong with a positive fourth quarter. U.S. equities were supported by positive market sentiment amid a dovish Fed and reduced geopolitical tensions. The S&P 500 finished up 9.1% on the quarter. International equities were also positive, supported by improved global economic data and easy monetary policy, as the MSCI ACWI ex-US Index was up 8.9% on the quarter. Bonds were relatively flat on the quarter as long- term treasury yields increased. The 10-year U.S. Treasury rate increased 14 basis points on the quarter, finishing at 1.92%. The Barclays Aggregate Bond Index was up 0.18% on the quarter. Credit spreads narrowed given the risk-on sentiment, helping boost returns on corporate bonds.

Closed-end funds ("CEFs"), on average, were up over the fourth quarter. The average CEF was up 2.9% on net asset value ("NAV") and up 3.9% on market price as of December 31, 2019. Discounts narrowed over the quarter, starting at an average of -4.2% and ending at an average discount of -4.0%. Discount narrowing was generally driven by a strong equity market, favorable backdrop for credit, and limited tax-loss selling given strong 2019 performance for most CEFs.

Fourth quarter CEF total returns % (NAV and market price)

10%
8.9
8	7.6
7.4
	6.8
6
				4.3		4.7
4		3.9
	3.6		3.4
		2.9
		2.6
			2.2	2.1
2				1.7
							0.7	0.7
0
Sector	Equity	All CEFs	High yield	Investment	General	Bank loan	Municipal
equity	(options			grade	bond
	strategies)

• NAV return ● Market price return

Source: Lipper as of 12/31/2019. Returns are shown net of advisory fees paid by the fund and net of the fund's operating fees and expenses. Investors who purchase shares of the fund through an investment adviser or other financial professional may separately pay a fee to that service provider. Past performance is not indicative of future results

Fourth quarter 2019| Closed-end funds finish the year strong

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Municipal

Municipal bonds had positive performance in the fourth quarter on the heels of strong market technicals and continued demand for the asset class. Municipal funds saw $45.9bn in inflows across active, index and ETF products in 2019. Municipal CEFs posted positive returns for the quarter with the average fund up 0.7% on net asset value ("NAV") and up 0.7% on market price. Discounts remained the same, starting and finishing the quarter an average discount of -3.8%.

Investors still remain concerned around the uncertainty with respect to the impact of leverage costs and bond calls on future municipal CEF distributions. The SIFMA Municipal Swap Index, a base rate used to calculate interest rates on various forms of municipal fund leverage, was at 1.61% as of December 31, 2019, above its three-year average of 1.23%. While leverage costs have lowered over the course of 2019, bonds that are called or mature are generally being reinvested at lower coupons, potentially putting pressure on some CEF earnings.

Taxable fixed income

While rising interest rates drove down treasuries during the fourth quarter, credit assets performed well. A risk- on environment supported by easy monetary policy and increasing optimism around global growth, helped push credit spreads narrower and bond prices higher. The average taxable fixed income CEF was up 2.2% on NAV and up 4.0% on market price in the fourth quarter. Taxable fixed income discounts narrowed 90 basis points, on average, finishing the quarter at an average discount of -3.9%.

High yield default rates remained lower than historical averages and spreads came in amid positive market sentiment. High yield CEFs were up an average of 2.6% on NAV and up 3.6% on market price over the fourth quarter. Discounts in high yield CEFs narrowed by 40 basis points, finishing December at an average

discount of -4.9%. Bank Loan CEFs were the weakest performers in the taxable fixed income space on NAV, but posted strong market price returns in the fourth quarter. The average bank loan CEF NAV up 1.7% and market price up 4.7%. Bank loan CEF discounts stayed flat on the quarter, finishing at an average discount of -6.9%. Bank loan discounts continue to be among widest in the fixed income space. Market sentiment for floating rate assets was generally negative in 2019 with the Fed reversing course and cutting interest rates to stabilize the U.S. economy. With investors less concerned about rising interest rates, demand for Bank Loan funds has declined, widening discounts.

Equity

Global equities delivered positive returns in the fourth quarter, with the U.S. leading the markets. Positive investor sentiment picked up towards the second half of the quarter on the back of reduced geopolitical tensions, positive trade news and economic data indicating a stabilizing growth outlook. Broad risk appetite appeared to be somewhat balanced by a dovish pivot in global monetary policy, aiming to ease the inflationary pressures and offset rising geopolitical tensions. Equity CEFs finished the quarter up 7.9% on NAV and 7.5% on market price, on average. Discounts in the equity CEF space widened 70 basis points over the quarter, finishing at an average discount of -3.2%.

From a sector perspective, all sectors saw positive returns during the quarter, with technology and healthcare generating the greatest returns. Sector equity CEFs were up 8.9% on NAV and up 7.4% on market price over the quarter. Discounts in the sector equity funds widened 170 basis points finishing at an average discount of -5.6%. Broad based equity funds that use covered calls were positive on the quarter. Equity (option strategies) CEFs were up 6.9% on NAV and up 7.6% on market price, on average, over the quarter. Discounts in the category widened by an average of 50 basis points, finishing at an average discount of -2.4%.

• Fourth quarter 2019| Closed-end funds finish the year strong

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Distribution rate (% of market price) as of December 31, 2019

9%						8.1	8.2
		7.2	7.2	7.6	7.6
	6.8
6
4.9
3
0
Investment	Sector	All CEFs	Equity	Municipal	Bank loan	General bond	High yield
grade	equity		(options	(tax equivalent)
			strategies)

Source: Lipper as of 12/31/2019. Distribution rate is calculated by annualizing the fund's latest declared regular distribution and dividing that number by the funds market price as of the stated date. Distributions are sourced from net investment income, unless noted otherwise. Tax-Equivalent Distribution Rate calculated using a 40.8% effective tax rate.

Current premium/discount versus 5-year average as of December 31, 2019

3%									2.2
0
-3								-2.2-2.9	-2.4
					-3.3	-4.0	-3.8
-6					-4.9
	-5.8	-5.6		-5.8	-4.9
-6.9		-6.3
-7.0
-9		-8.7
Bank	Investment	Sector	High	All CEFs	Municipal	Equity	General
loans	grade	equity	yield			(options	bond
								strategies)
● Current premium/discount ● 5-year avg. premium/discount

Source: Lipper as of 12/31/2019.

About BlackRock

BlackRock's purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, our clients turn to us for the solutions they need when planning for their most important goals. As of December 31, 2019, the firm managed approximately $7.43 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, please visit www.blackrock.com/corporate | Twitter: @blackrock | Blog: www.blackrockblog.com | LinkedIn: www.linkedin.com/company/blackrock.

Availability of fund updates

BlackRock will update performance and certain other data for the Funds on a monthly basis on its website in the "Closed-end Funds" section of www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to check the website for updated performance information and the release of other material information about the Funds. This reference to BlackRock's website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock's website in this release.

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Investment return, price, yields and NAV will fluctuate with changes in market conditions. At the time of sale, your shares may have a market price that is above or below net asset value, and may be worth more or less than your original investment. There is no assurance that a fund will meet its investment objective. Closed-end fund shares are not deposits or obligations of, or guaranteed by, any bank and are not insured by the FDIC or any other agency. Investing involves risk, including possible loss of principal amount invested. This is not a prospectus intended for use in the purchase or sale of any fund's shares. Investors should review a fund's prospectus and other publicly available information, including shareholder reports, carefully before investing. Shares may only be purchased or sold through registered broker/dealers. For more information regarding any of BlackRock's closed-end funds, please call BlackRock at 800-882- 0052. No assurance can be given that a fund will achieve its investment objective.

Some BlackRock CEFs may utilize leverage to seek to enhance the yield and net asset value of their common stock, through bank borrowings, issuance of short-term debt securities or shares of preferred stock, or a combination thereof. However, these objectives cannot be achieved in all interest rate environments. While leverage may result in a higher yield for the fund, the use of leverage involves risk, including the potential for higher volatility of the NAV, fluctuations of dividends and other distributions paid by the fund and the market price of the fund's common stock, among others. Certain funds may invest assets in securities of issuers domiciled outside the United States, including issuers from emerging markets. Foreign investing involves special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments.

Some BlackRock CEFs make distributions of ordinary income and capital gains at calendar year end. Those distributions temporarily cause extraordinarily high yields. There is no assurance that a fund will repeat that yield in the future. Subsequent monthly distributions that do not include ordinary income or capital gains in the form of dividends will likely be lower. Fund details, holdings and characteristics are as of the date noted and subject to change.

The opinions expressed are those of BlackRock as of September 30, 2019, and are subject to change at any time due to changes in market or economic conditions. BlackRock makes no undertaking to change this document in response to such changes. These comments should not be construed as a recommendation of any individual holdings or market sectors

General market and credit risks: Debt instruments are subject to credit and interest rate risks. Credit risk refers to the likelihood that an obligor will default in the payment of principal or interest on an instrument. Financial strength and solvency of an obligor are the primary factors influencing credit risk. In addition, lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument and debt instrument that are rated by rating agencies are often reviewed and may be subject to downgrade. Interest rate risk refers to the risks associated with market changes in interest rates. Interest rate changes may affect the value of a debt instrument indirectly (especially in the case of fixed rate obligations or directly (especially in the case of instrument whose rates are adjustable). In general, rising interest rates will negatively impact the process of a fixed rate debt instrument and falling interest rates will have a positive effect on price. Adjustable rate instruments also react to interest rate changes in a similar manner although generally to a lesser degree (depending, however, on the characteristics of the reset terms, including the index chosen, frequency of reset and reset caps or floors, among other factors).

Municipal market risks: There may be less information available on the financial condition of issuers of municipal securities than for public corporations. The market for municipal bonds may be less liquid than taxable bonds. A portion of the income may be taxable. Some investors may be subject to Alternative Minimum Tax (AMT). Capital gain distributions, if any, are taxable. The Fund may utilize leveraging to seek to enhance the yield and net asset value of its common stock, as described in the Fund's prospectus. These objectives will not necessarily be achieved in all interest rate environments. The use of leverage involves risk, including the potential for higher volatility and greater declines of the Fund's net asset value, fluctuations of dividends and other distributions paid by the Fund and the market price of the Fund's common stock, among others.

Equity market risks: The price of equities may rise or fall because of changes in the broad market or changes in a company's financial condition-sometimes rapidly or unpredictable. These price movements may result form factor affecting individual companies, sectors or industries, such as changes in economic or political conditions. Equity securities are subject to "stock market risk" meaning that stock prices may decline over short or extended periods of time.

Index descriptions:

SIFMA Municipal Swap Index: 7-dayhigh-grade market index comprised of tax-exempt Variable Rate Demand Obligations (VRDOs) with certain characteristics. The Index is calculated and published by Bloomberg. The Index is overseen by SIFMA's Municipal Swap Index Committee. Past performance is not indicative of future results. You cannot invest directly in an unmanaged index.

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