UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21286
Name of Fund: Preferred Income Strategies Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, Preferred Income Strategies Fund, Inc., 800 Scudders Mill Road,
Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ
08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 10/31/05
Date of reporting period: 05/01/05 - 07/31/05
Item 1 - Schedule of Investments
Preferred Income Strategies Fund, Inc.
Schedule of Investments as of July 31, 2005 (in U.S. dollars)
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Preferred Securities
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Industry+ Face Amount Capital Trusts Value
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Commercial Banks - 22.1% $ 12,035,000 ABN AMRO North America Holding Preferred Capital Repackaging
Trust I, 6.523% (a)(b)(c) $ 13,022,773
11,000,000 Abbey National Capital Trust I, 8.963% (b)(c) 15,508,790
2,000,000 Bank One Capital III, 8.75% due 9/01/2030 2,733,240
1,000,000 Chase Capital I Series A, 7.67% due 12/01/2026 (a) 1,069,890
16,455,000 Chase Capital II Series B, 4.193% due 2/01/2027 (b) 15,387,416
34,000,000 Dresdner Funding Trust I, 8.151% due 6/30/2031 (a) 42,167,106
3,630,000 First Empire Capital Trust II, 8.277% due 6/01/2027 3,947,734
1,820,000 First Security Capital I, 8.41% due 12/15/2026 1,974,760
5,600,000 Firstar Capital Trust I Series B, 8.32% due 12/15/2026 6,067,068
2,000,000 HSBC America Capital Trust I, 7.808% due 12/15/2026 (a) 2,148,466
15,835,000 HSBC Capital Funding LP/Jersey Channel Islands, 10.176% (a)
(b)(c) 24,746,526
12,275,000 Hubco Capital Trust II Series B, 7.65% due 6/15/2028 (a) 13,502,500
998,000 JPM Capital Trust I, 7.54% due 1/15/2027 (a) 1,068,178
2,000,000 Lloyds TSB Bank Plc, 6.90% (c) 2,070,134
8,500,000 Mizuho JGB Investment LLC, 9.87% (a)(b)(c) 9,531,346
18,470,000 Nationsbank Capital Trust III, 4.149% due 1/15/2027 (b) 17,685,357
10,000,000 RBS Capital Trust B, 6.80% (b)(c) 10,294,860
2,000,000 Republic New York Corp., 7.53% due 12/04/2026 2,137,210
5,000,000 SB Treasury Co. LLC, 9.40% (a)(b)(c) 5,544,135
4,500,000 St. George Funding Co. LLC, 8.485% (a)(c) 4,951,400
10,000,000 Westpac Capital Trust III, 5.819% (a)(b)(c) 10,386,300
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205,945,189
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Consumer Finance - 0.5% 4,630,000 MBNA Capital A, 8.278% due 12/01/2026 5,000,400
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Diversified Financial 15,000,000 Agfirst Farm Credit Bank, 8.393% due 12/15/2016 (b) 17,058,045
Services - 5.2% 10,000,000 CIT Capital Trust I, 7.70% due 2/15/2027 10,680,840
9,000,000 Farm Credit Bank of Texas Series 1, 7.561% (b)(c) 9,583,920
10,000,000 Sun Life Canada US Capital Trust, 8.526% (a)(c) 10,949,950
--------------
48,272,755
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Electric 14,950,000 HL&P Capital Trust II Series B, 8.257% due 2/01/2037 15,996,500
Utilities - 2.3% 5,000,000 SWEPCO Capital I, 5.25% due 10/01/2043 (b) 4,967,215
--------------
20,963,715
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Gas Utilities - 0.6% 5,000,000 AGL Capital Trust I Series B, 8.17% due 6/01/2037 5,468,765
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Insurance - 18.6% 24,175,000 AON Corp., 8.205% due 1/01/2027 27,902,011
21,300,000 Ace Capital Trust II, 9.70% due 4/01/2030 28,304,739
23,725,000 Axa, 8.60% due 12/15/2030 31,808,060
15,000,000 Farmers Exchange Capital, 7.05% due 7/15/2028 (a) 15,754,740
10,000,000 GE Global Insurance Holding Corp., 7.75% due 6/15/2030 11,372,610
1,000,000 Genamerica Capital I, 8.525% due 6/30/2027 (a) 1,101,930
6,066,000 ING Capital Funding Trust III, 8.439% (b)(c) 7,038,495
1,000,000 Markel Capital Trust I Series B, 8.71% due 1/01/2046 1,075,431
3,605,000 Oil Casualty Insurance Ltd., 8% due 9/15/2034 (a) 3,762,182
6,325,000 Principal Life Insurance Co., 8% due 3/01/2044 (a) 7,188,850
14,000,000 QBE Insurance Group Ltd., 5.647% due 7/01/2023 (a)(b) 14,010,682
6,225,000 Transamerica Capital III, 7.625% due 11/15/2037 7,284,682
15,600,000 Zurich Capital Trust I, 8.376% due 6/01/2037 (a) 16,796,021
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173,400,433
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Multi-Utilities - 3.2% 10,000,000 Dominion Capital Trust I, 7.83% due 12/01/2027 10,981,500
15,000,000 Dominion Resources Capital Trust III, 8.40% due 1/15/2031 18,690,045
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29,671,545
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Oil, Gas & 5,000,000 KN Capital Trust I Series B, 8.56% due 4/15/2027 (a) 5,437,835
Consumable Fuels - 1.9% 1,750,000 KN Capital Trust III, 7.63% due 4/15/2028 2,011,593
9,850,000 Phillips 66 Capital Trust II, 8% due 1/15/2037 (a) 10,663,512
--------------
18,112,940
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Preferred Income Strategies Fund, Inc.
Schedule of Investments as of July 31, 2005 (in U.S. dollars)
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Preferred Securities
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Industry+ Face Amount Capital Trusts Value
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Thrifts & Mortgage Astoria Capital Trust I:
Finance - 4.4% $ 1,000,000 9.75% due 11/01/2029 (a) $ 1,166,250
5,000,000 Series B, 9.75% due 11/01/2029 5,881,250
5,760,000 Dime Capital Trust I Series A, 9.33% due 5/06/2027 6,344,554
12,765,000 Greenpoint Capital Trust I, 9.10% due 6/01/2027 14,078,850
3,005,000 ML Capital Trust I, 9.875% due 3/01/2027 3,285,231
9,775,000 Webster Capital Trust I, 9.36% due 1/29/2027 (a) 10,654,750
--------------
41,410,885
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Total Capital Trusts (Cost - $518,882,648) - 58.8% 548,246,627
===================================================================================================================================
Shares Held Preferred Stocks
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Capital Markets - 1.9% 96,000 Goldman Sachs Group, Inc. Series A, 3.91% 2,390,400
600,000 Lehman Brothers Holdings, Inc., 6.50% 15,546,000
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17,936,400
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Commercial Banks - 10.8% 150 BBVA Privanza International Ltd., 7.764% (a)(d) 15,675,000
435,200 Banco Santander Central Hispano SA, 6.41% 11,080,192
16,000,000 Barclays Bank Plc, 6.278% 16,320,000
137,579 First Republic Bank, 6.25% 3,443,781
4,650 First Tennessee Bank NA, 3.90% (a) 4,581,703
166,800 Provident Financial Group, Inc., 7.75% 4,612,020
800,000 Royal Bank of Scotland Group Plc Series L, 5.75% 19,688,000
23,000 SG Preferred Capital II, 6.302% 24,725,000
--------------
100,125,696
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Diversified Financial 855,000 CIT Group, Inc. Series A, 6.35% 21,550,275
Services - 4.1% 320,000 Cobank ACB, 7% 16,617,280
--------------
38,167,555
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Electric Utilities - 0.8% 14,000 Alabama Power Co., 5.83% 351,540
80,000 Duquesne Light Co., 6.50% 4,196,000
80,000 Interstate Power & Light Co. Series B, 8.375% 2,720,000
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7,267,540
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Gas Utilities - 1.8% 626,000 Southern Union Co., 7.55% 17,058,500
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Insurance - 9.1% 880,000 ACE Ltd. Series C, 7.80% 23,628,000
1,260,000 Metlife, Inc. Series B, 6.50% 31,224,438
140,000 Prudential Plc, 6.50% 3,507,000
16,340 Zurich RegCaPS Funding Trust, 6.01% (a)(b) 16,518,719
9,800 Zurich RegCaPS Funding Trust, 6.58% (a)(b) 10,317,563
--------------
85,195,720
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Multi-Utilities - 0.4% 140,000 Pacific Gas & Electric Co. Series A, 6% 3,647,000
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Thrifts & Mortgage 1,210,000 Fannie Mae, 7% 67,079,375
Finance - 8.4% 264,650 Fannie Mae Series L, 5.125% 11,565,205
--------------
78,644,580
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Wireless Telecommunication 10,423 Centaur Funding Corp., 9.08% 13,755,103
Services - 1.5%
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Total Preferred Stocks (Cost - $347,914,522) - 38.8% 361,798,094
===================================================================================================================================
Real Estate Investment Trusts
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Real Estate - 21.7% 251,400 Alexandria Real Estate Equities, Inc. Series C, 8.375% 6,629,418
400,000 CBL & Associates Properties, Inc. Series C, 7.75% 10,400,000
600,000 CarrAmerica Realty Corp. Series E, 7.50% 15,534,000
680,000 Developers Diversified Realty Corp., 8% 17,727,600
190,000 Duke Realty Corp. Series K, 6.50% 4,795,600
2,390 First Industrial Realty Trust, Inc., 6.236% 2,387,013
4,000 Firstar Realty LLC, 8.875% (a) 5,365,000
Preferred Income Strategies Fund, Inc.
Schedule of Investments as of July 31, 2005 (in U.S. dollars)
-----------------------------------------------------------------------------------------------------------------------------------
Preferred Securities
-----------------------------------------------------------------------------------------------------------------------------------
Industry+ Shares Held Real Estate Investment Trusts Value
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768,000 Health Care Property Investors, Inc. Series F, 7.10% $ 19,591,680
172,800 Health Care REIT, Inc. Series F, 7.625% 4,390,209
684,700 Kimco Realty Corp. Series F, 6.65% 17,480,391
1,600,000 New Plan Excel Realty Trust Series E, 7.625% 42,400,000
PS Business Parks, Inc.:
72,000 Series K, 7.95% 1,879,200
64,000 Series M, 7.20% 1,594,003
320,000 Public Storage, Inc. Series X, 6.45% 8,064,000
58,000 Regency Centers Corp., 7.25% 1,489,875
607,550 Regency Centers Corp., 7.45% 15,674,790
11,857 Sovereign Real Estate Investment Corp., 12% 17,192,650
145,000 Vornado Realty Trust Series E, 7% 3,733,750
130,000 Wachovia Preferred Funding Corp. Series A, 7.25% 3,745,300
100,000 Weingarten Realty Investors Series D, 6.75% 2,562,000
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Total Real Estate Investment Trusts
(Cost - $195,615,535) - 21.7% 202,636,479
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Face Amount Trust Preferred
-----------------------------------------------------------------------------------------------------------------------------------
Aerospace & Defense - 3.0% $ 27,450,000 RC Trust I, 7% due 5/15/2006 27,947,559
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Capital Markets - 0.1% 875,000 Lehman Brothers Holdings Capital Trust III Series K, 1.558%
due 3/15/2052 883,369
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Communications Equipment - 0.2% 2,000,000 Corporate-Backed Trust Certificates, 8.375% due 11/15/2028 2,123,109
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Electric Utilities - 1.7% 6,750,000 Georgia Power Co. Series O, 1.475% due 4/15/2033 6,810,203
3,000,000 HECO Capital Trust III, 6.50% due 3/18/2034 3,157,710
5,000,000 National Rural Utilities Cooperative Finance Corp., 6.75%
due 2/15/2043 5,099,621
950,000 Virginia Power Capital Trust II, 1.844% due 7/30/2042 997,682
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16,065,216
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Gas Utilities - 0.7% 500,000 Dominion CNG Capital Trust I, 1.95% due 10/31/2041 514,670
5,750,000 Southwest Gas Capital II, 7.70% due 9/15/2043 6,011,491
--------------
6,526,161
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Insurance - 3.2% 16,000,000 ABN AMRO North America Capital Funding Trust II,
3.465% (a)(b)(c) 15,683,415
295,000 Berkley W R Capital Trust, 6.75% due 7/26/2045 7,375,000
1,000,000 Everest Re Capital Trust, 1.963% due 11/15/2032 1,069,333
5,000,000 Lincoln National Capital VI Series F, 6.75% due 9/11/2052 5,217,871
--------------
29,345,619
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Multi-Utilities - 0.0% 397,425 PSEG Funding Trust II, 8.75% due 12/31/2032 427,657
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Thrifts & Mortgage 27,000,000 Countrywide Financial Corp., 1.50% due 4/01/2033 27,814,254
Finance - 3.7% 6,000,000 Dime Community Capital I, 7% due 4/14/2034 6,060,000
--------------
33,874,254
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Total Trust Preferred (Cost - $115,123,350) - 12.6% 117,192,944
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Total Preferred Securities (Cost - $1,177,536,055) - 131.9% 1,229,874,144
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Corporate Bonds
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Automobiles - 3.9% 25,000,000 DaimlerChrysler NA Holding Corp., 8.50% due 1/18/2031 32,043,650
5,000,000 Ford Motor Co., 7.45% due 7/16/2031 4,239,285
--------------
36,282,935
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Diversified Financial 8,000,000 Ford Motor Credit Co., 7% due 10/01/2013 7,772,176
Services - 5.5% 29,000,000 General Motors Acceptance Corp., 8% due 11/01/2031 28,130,058
15,000,000 Sigma Finance Corp., 6.297% due 8/15/2011 (g) 15,000,000
--------------
50,902,234
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Preferred Income Strategies Fund, Inc.
Schedule of Investments as of July 31, 2005 (in U.S. dollars)
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Industry+ Face Amount Corporate Bonds Value
-----------------------------------------------------------------------------------------------------------------------------------
Diversified $ 28,000,000 France Telecom SA, 8.75% due 3/01/2031 $ 38,560,368
Telecommunication Sprint Capital Corp.:
Services - 7.9% 2,000,000 6.90% due 5/01/2019 2,264,450
24,000,000 8.75% due 3/15/2032 33,025,632
--------------
73,850,450
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Electric Utilities - 1.2% 10,000,000 FirstEnergy Corp. Series B, 6.45% due 11/15/2011 10,753,720
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Food Products - 0.6% 4,800,000 Tyson Foods, Inc., 7% due 1/15/2028 5,311,637
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Independent Power Producers & Energy 16,575,000 Duke Energy Field Services LLC, 8.125% due 8/16/2030 21,753,792
Traders - 2.3%
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Media - 4.3% 10,000,000 Comcast Corp., 7.05% due 3/15/2033 11,626,950
Time Warner, Inc.:
5,000,000 7.625% due 4/15/2031 6,160,900
18,000,000 7.70% due 5/01/2032 22,489,272
--------------
40,277,122
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Thrifts & Mortgage 8,000,000 Residential Capital Corp., 6.875% due 6/30/2015 (a) 8,328,400
Finance - 1.8% 8,000,000 Roslyn Real Estate Asset Corp. Series D, 7.14% (b)(c) 8,000,000
--------------
16,328,400
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Wireless Telecommunication 28,000,000 AT&T Wireless Services, Inc., 8.75% due 3/01/2031 38,683,036
Services - 4.1%
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Total Corporate Bonds (Cost - $269,444,402) - 31.6% 294,143,326
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Short-Term Securities
-----------------------------------------------------------------------------------------------------------------------------------
$ 2,000,000 Freddie Mac, 3.345% due 8/23/2005 (e)(f) 1,995,967
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Total Short-Term Securities (Cost - $1,995,967) - 0.2% 1,995,967
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Number of
Contracts Put Options Purchased
-----------------------------------------------------------------------------------------------------------------------------------
4,000 U.S. Treasury Bonds Future, expiring August 2005 at $109 437,500
-----------------------------------------------------------------------------------------------------------------------------------
Total Put Options Purchased
(Premiums Paid - $952,460) - 0.0% 437,500
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Total Investments (Cost - $1,449,928,884*) - 163.7% 1,526,450,937
Liabilities in Excess of Other Assets - (4.7%) (43,981,711)
Preferred Stock, at Redemption Value - (59.0%) (550,130,946)
--------------
Net Assets Applicable to Common Stock - 100.0% $ 932,338,280
==============
+ For Fund compliance purposes, "Industry" means any one or more of the
industry sub-classifications used by one or more widely recognized market
indexes or ratings group indexes, and/or as defined by Fund management.
This definition may not apply for purposes of this report which may
combine such industry sub-classifications for reporting ease.
* The cost and unrealized appreciation (depreciation) of investments as of
July 31, 2005, as computed for federal income tax purposes, were as
follows:
Aggregate cost $1,456,234,846
==============
Gross unrealized appreciation $ 84,746,275
Gross unrealized depreciation (14,530,184)
--------------
Net unrealized appreciation $ 70,216,091
==============
(a) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(b) Floating rate note.
(c) The security is a perpetual bond and has no definite maturity date.
Preferred Income Strategies Fund, Inc.
Schedule of Investments as of July 31, 2005 (in U.S. dollars)
(d) Depositary Receipts.
(e) Certain U.S. Government Obligations are traded on a discount basis; the
interest rates shown reflect the discount rates paid at the time of
purchase by the Fund.
(f) All or a portion of security held as collateral in connection with open
financial futures contracts.
(g) Restricted securities as to resale, representing 1.6% of net assets, were
as follows:
-------------------------------------------------------------------------------------------------
Issue Acquisition Date Cost Value
-------------------------------------------------------------------------------------------------
Sigma Finance Corp., 6.297% due 8/15/2011 2/13/2004 $15,000,000 $ 15,000,000
-------------------------------------------------------------------------------------------------
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Interest
Affiliate Net Activity Income
-------------------------------------------------------------------------
Merrill Lynch Liquidity Series, LLC
Cash Sweep Series I - $ 133,189
Merrill Lynch Liquidity Series, LLC
Money Market Series - $ 2,842
-------------------------------------------------------------------------
Swaps outstanding as of July 31, 2005 were as follows:
---------------------------------------------------------------------------------------------
Unrealized
Notional Appreciation
Amount (Depreciation)
---------------------------------------------------------------------------------------------
Receive a fixed rate of 4.13% and pay a
floating rate based on 3-month USD LIBOR
Broker, Citibank N.A.
Expires May 2008 $ 34,000,000 $ (290,485)
Receive a fixed rate of 4.099% and pay a
floating rate based on 3-month USD LIBOR
Broker, Citibank N.A.
Expires June 2008 $ 34,000,000 (320,473)
Sold credit default protection on General
Motors Acceptance Corp. and receive 6.375%
Broker, JPMorgan Chase Bank
Expires June 2010 $ 3,990,000 472,005
Bought credit default protection on General
Motors Acceptance Corp. and pay 6.90%
Broker, Lehman Brothers Special Finance
Expires June 2010 $ 3,990,000 (555,983)
Pay a fixed rate of 4.902% and receive a
floating rate based on 3-month USD LIBOR
Broker, UBS Warburg
Expires October 2010 $ 160,000,000 (2,121,760)
Preferred Income Strategies Fund, Inc.
Schedule of Investments as of July 31, 2005 (in U.S. dollars)
---------------------------------------------------------------------------------------------
Unrealized
Notional Appreciation
Amount (Depreciation)
---------------------------------------------------------------------------------------------
Receive a fixed rate of 4.1275% and pay a
floating rate based on 3-month USD LIBOR
Broker, Deutsche Bank AG London
Expires February 2012 $ 200,000,000 $ (4,497,045)
Receive a fixed rate of 4.14% and pay a
floating rate based on 3-month USD LIBOR
Broker, Lehman Brothers Special Finance
Expires February 2012 $ 200,000,000 (4,353,923)
Receive a fixed rate of 4.683% and pay a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services, Inc.
Expires January 2015 $ 18,880,000 (7,316)
Pay a fixed rate of 4.6275% and receive a
floating rate based on 3-month USD LIBOR
Broker, Citibank N.A.
Expires June 2015 $ 40,000,000 278,363
Pay a fixed rate of 4.5165% and receive a
floating rate based on 3-month USD LIBOR
Broker, Citibank N.A.
Expires July 2015 $ 40,000,000 633,297
Pay a fixed rate of 5.104% and receive a
floating rate based on 3-month USD LIBOR
Broker, JPMorgan Chase Bank
Expires September 2015 $ 160,000,000 (4,509,440)
Pay a fixed rate of 5.662% and receive a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services, Inc.
Expires September 2015 $ 300,000,000 (23,201,100)
Receive a fixed rate of 5.085% and pay a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services, Inc.
Expires March 2020 $ 33,500,000 848,761
Preferred Income Strategies Fund, Inc.
Schedule of Investments as of July 31, 2005 (in U.S. dollars)
---------------------------------------------------------------------------------------------
Unrealized
Notional Appreciation
Amount (Depreciation)
---------------------------------------------------------------------------------------------
Pay a fixed rate of 5.26405% and receive a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services, Inc.
Expires July 2025 $ 82,080,000 $ (3,656,032)
Pay a fixed rate of 5.258% and receive a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services, Inc.
Expires September 2025 $ 102,500,000 (4,293,930)
Receive a fixed rate of 5.256% and pay a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services, Inc.
Expires January 2035 $ 56,400,000 2,671,085
Receive a fixed rate of 5.225% and pay a
floating rate based on 3-month USD LIBOR
Broker, Morgan Stanley Capital Services, Inc.
Expires March 2035 $ 60,500,000 2,570,075
Receive a fixed rate of 4.962% and pay a
floating rate based on 3-month USD LIBOR
Broker, Citibank N.A.
Expires May 2035 $ 14,200,000 21,925
Receive a fixed rate of 4.855% and pay a
floating rate based on 3-month USD LIBOR
Broker, Citibank N.A.
Expires June 2035 $ 14,200,000 (212,767)
Pay a fixed rate of 5.088% and receive a
floating rate based on 3-month USD LIBOR
Broker, Lehman Brothers Special Finance
Expires September 2035 $ 72,000,000 (1,385,208)
---------------------------------------------------------------------------------------------
Total $ (41,909,951)
=============
Item 2 - Controls and Procedures
2(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to the
filing date of this report.
2(b) - There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the last fiscal quarter of the period
covered by this report that has materially affected, or is 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.
Preferred Income Strategies Fund, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer
Preferred Income Strategies Fund, Inc.
Date: September 23, 2005
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/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer
Preferred Income Strategies Fund, Inc.
Date: September 23, 2005
By: /s/ Donald C. Burke
-----------------------
Donald C. Burke,
Chief Financial Officer
Preferred Income Strategies Fund, Inc.
Date: September 23, 2005