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: BlackRock Preferred Income Strategies Fund, Inc. (PSY)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive
Officer, BlackRock 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: (800) 882-0052, Option 4
Date of fiscal year end: 10/31/2008
Date of reporting period: 05/01/2008 - 07/31/2008
Item 1 - Schedule of Investments
BlackRock Preferred Income Strategies Fund, Inc.
Schedule of Investments July 31, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
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Preferred Securities
-----------------------------------------------------------------------------------------------------------------------------------
Par
Industry Capital Trusts (000) Value
-----------------------------------------------------------------------------------------------------------------------------------
Capital Markets - 2.7% Lehman Brothers Holdings Capital Trust V,
3.479% (a)(b) $ 6,400 $ 3,213,594
State Street Capital Trust III,
8.25% (a)(b)(c) 4,000 4,030,960
State Street Capital Trust IV, 3.776%, 6/01/67 (b)(c) 12,535 9,335,980
--------------
16,580,534
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Commercial Banks - 18.9% ABN AMRO North America Holding Preferred Capital
Repackaging Trust I, 6.523% (a)(b)(c)(d) 12,035 11,666,813
Abbey National Capital Trust I,
8.963% (a)(b) 2,811 3,055,653
BB&T Capital Trust IV, 6.82%, 6/12/77 (b)(c) 18,350 14,004,353
Bank One Capital III, 8.75%, 9/01/30 2,000 2,109,900
Barclays Bank Plc, 5.926% (a)(b)(d) 6,115 4,833,455
First Empire Capital Trust II, 8.277%, 6/01/27 3,630 3,048,416
HSBC America Capital Trust I,
7.808%, 12/15/26 (d) 2,000 1,944,184
HSBC Capital Funding LP/Jersey Channel Islands,
10.176% (a)(b)(c)(d) 15,835 18,797,760
HSBC Finance Capital Trust IX, 5.911%, 11/30/35 (b) 7,300 5,591,632
Hubco Capital Trust II Series B, 7.65%, 6/15/28 12,275 12,762,775
Huntington Capital III, 6.65%, 5/15/37 (b) 3,850 2,047,584
NationsBank Capital Trust III, 3.263%, 1/15/27 (b)(c) 13,470 9,563,794
Regions Financing Trust II, 6.625%, 5/15/47 (b) 5,705 3,147,431
Royal Bank of Scotland Group Plc,
7.648% (a)(b) 3,930 3,529,085
SMFG Preferred Capital USD 3 Ltd.,
9.50% (a)(b)(d) 3,550 3,542,903
SunTrust Preferred Capital I, 5.853% (a)(b) 4,175 2,786,813
Wachovia Corp. Series K, 7.98% (a)(b)(c) 15,920 12,233,724
Wells Fargo Capital XIII Series GMTN,
7.70% (a)(b) 3,400 3,221,429
--------------
117,887,704
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Consumer Finance - 0.8% MBNA Capital A, 8.278%, 12/01/26 4,630 4,604,105
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Diversified Financial Services - AgFirst Farm Credit Bank, 8.393%, 12/15/16 (b) 15,000 14,665,230
13.0% Bank of America Corp. Series M,
8.125% (a)(b)(c) 15,200 14,139,192
Citigroup, Inc., 8.40% (a)(b)(c) 23,000 19,693,520
Farm Credit Bank of Texas Series 1,
7.561% (a)(b) 9,000 8,187,210
BlackRock Preferred Income Strategies Fund, Inc.
Schedule of Investments July 31, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Par
Industry Capital Trusts (000) Value
-----------------------------------------------------------------------------------------------------------------------------------
ING Capital Funding Trust III,
8.439% (a)(b) $ 6,066 $ 6,136,845
JPMorgan Chase & Co., 7.90% (a)(b)(c) 13,000 12,025,260
JPMorgan Chase Capital XXIII, 3.804%, 5/15/77 (b) 8,375 6,385,016
--------------
81,232,273
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Electric Utilities - 0.8% SWEPCO Capital I, 5.25%, 10/01/43 (b) 5,000 4,945,420
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Insurance - 9.8% AON Corp., 8.205%, 1/01/27 (c) 12,175 10,953,787
Ace Capital Trust II, 9.70%, 4/01/30 (c) 11,300 11,982,927
Farmers Exchange Capital, 7.05%, 7/15/28 (c)(d) 15,000 12,333,390
GE Global Insurance Holding Corp., 7.75%, 6/15/30 (c) 10,000 10,129,290
Genworth Financial, Inc., 6.15%, 11/15/66 (b) 3,000 2,256,456
Oil Casualty Insurance Ltd., 8%, 9/15/34 (d) 3,605 3,209,387
Principal Life Insurance Co., 8%, 3/01/44 (c)(d) 6,325 6,810,387
Zenith National Insurance Capital Trust I,
8.55%, 8/01/28 (d) 3,750 3,571,875
--------------
61,247,499
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Multi-Utilities - 1.6% Dominion Resources Capital Trust I, 7.83%, 12/01/27 (c) 10,000 9,826,640
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Road & Rail - 0.5% BNSF Funding Trust I, 6.613%, 12/15/55 (b) 3,750 3,316,890
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Thrifts & Mortgage Finance - 0.4% Webster Capital Trust IV, 7.65%, 6/15/37 (b) 3,875 2,538,489
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Total Capital Trusts - 48.5% 302,179,554
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Preferred Stocks Shares
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Capital Markets - 0.2% Deutsche Bank Contingent Capital Trust II, 6.55% 72,200 1,488,042
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Commercial Banks - 9.1% Barclays Bank Plc, 8.125% 225,000 5,377,500
First Tennessee Bank NA, 3.90% (b)(d) 4,650 3,467,156
HSBC USA, Inc. Series H, 6.50% 120,000 2,386,800
Provident Financial Group, Inc., 7.75% 166,800 4,274,250
Royal Bank of Scotland Group Plc Series L, 5.75% 20,000 320,600
Royal Bank of Scotland Group Plc Series M, 6.40% 15,000 262,500
SG Preferred Capital II, 6.302% (b) 23,000 22,913,750
Santander Finance Preferred SA Unipersonal, 6.50% 374,000 7,176,125
Santander Finance Preferred SA Unipersonal, 6.80% 208,600 4,393,638
Sovereign Bancorp, Inc. Series C, 7.30% (f) 48,000 864,000
Wachovia Corp. Series J, 8% 265,000 5,082,700
--------------
56,519,019
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Diversified Financial Services - Bank of America Corp. Series H, 8.20% 155,000 3,758,750
5.5% Citigroup, Inc. Series AA, 8.125% 326,400 6,707,520
Citigroup, Inc. Series T, 6.50% (g) 125,000 5,530,000
Cobank ACB, 7% (d) 152,000 7,116,336
JPMorgan Chase Capital XXI Series U, 3.741% (b)(c) 15,525,000 11,184,769
--------------
34,297,375
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Electric Utilities - 2.2% Alabama Power Co., 5.83% 14,000 327,600
Alabama Power Co., 6.50% 145,000 3,552,500
Entergy Arkansas, Inc., 6.45% 114,400 2,831,400
BlackRock Preferred Income Strategies Fund, Inc.
Schedule of Investments July 31, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Industry Preferred Stocks Shares Value
-----------------------------------------------------------------------------------------------------------------------------------
Entergy Louisiana LLC, 6.95% 49,850 $ 5,187,740
Interstate Power & Light Co. Series B, 8.375% 80,000 2,128,000
--------------
14,027,240
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Insurance - 14.0% AXA SA, 6.379% (b)(c)(d) 13,470,000 10,900,328
Aspen Insurance Holdings Ltd., 7.401% (b) 194,000 3,443,500
Axis Capital Holdings Ltd. Series A, 7.25% 129,300 2,767,020
Axis Capital Holdings Ltd. Series B, 7.50% (b) 36,000 2,896,877
Endurance Specialty Holdings Ltd. Series A, 7.75% 139,200 2,853,600
Financial Security Assurance
Holdings Ltd., 6.40% (b)(d) 6,930,000 4,018,111
Great West Life & Annuity Insurance
Co., 7.153% (b)(d) 7,500,000 6,192,465
MetLife, Inc., 6.40% (c) 16,825,000 14,305,490
MetLife, Inc. Series B, 6.50% 764,400 15,777,216
PartnerRe Finance II, 6.44% (b) 5,700,000 4,413,955
Prudential Plc, 6.50% 92,400 1,843,380
RenaissanceRe Holding Ltd. Series D, 6.60% 435,000 8,265,000
Zurich RegCaPS Funding Trust, 6.58% (b)(d) 9,800 9,594,813
--------------
87,271,755
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Multi-Utilities - 1.8% Dominion Resources, Inc., 7.50% (b) 8,400,000 7,552,306
Pacific Gas & Electric Co. Series A, 6% 140,000 3,497,200
--------------
11,049,506
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Thrifts & Mortgage Finance - 1.0% Fannie Mae Series O, 7% (b) 37,498 1,124,940
Freddie Mac Series Q, 3.85% (b) 181,500 4,809,750
--------------
5,934,690
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Wireless Telecommunication Centaur Funding Corp., 9.08% (d) 2,423 2,409,371
Services - 0.4%
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Total Preferred Stocks - 34.2% 212,996,998
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Real Estate Investment Trusts
-----------------------------------------------------------------------------------------------------------------------------------
Real Estate Investment Trusts BRE Properties, Inc. Series D, 6.75% 35,000 687,750
(REITs) - 4.4% Developers Diversified Realty Corp., 8% 400,000 8,800,000
First Industrial Realty Trust, Inc., 6.236% (b) 2,390 2,447,509
Firstar Realty LLC, 8.875% (d) 4,000 3,742,500
HCP, Inc. Series F, 7.10% 50,000 1,017,500
Kimco Realty Corp. Series F, 6.65% 50,000 987,500
Public Storage, Inc. Series I, 7.25% 160,000 3,495,008
Public Storage Series F, 6.45% 40,000 767,200
Public Storage Series M, 6.625% 71,900 1,431,529
Regency Centers Corp. Series D, 7.25% 100,000 2,065,000
Weingarten Realty Investors Series F, 6.50% 100,000 1,960,000
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Total Real Estate Investment Trusts - 4.4% 27,401,496
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BlackRock Preferred Income Strategies Fund, Inc.
Schedule of Investments July 31, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Par
Industry Trust Preferreds (000) Value
-----------------------------------------------------------------------------------------------------------------------------------
Capital Markets - 0.7% Deutsche Bank Contingent Capital Trust V, 8.05% (a) $ 4,263 $ 4,187,269
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Commercial Banks - 0.2% KeyCorp Capital IX, 6.75% 1,868 1,073,638
-----------------------------------------------------------------------------------------------------------------------------------
Communications Equipment - Corporate-Backed Trust Certificates, Motorola Debenture
0.2% Backed Series 2002-14, 8.375%, 11/15/28 2,000 1,477,297
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Consumer Finance - 1.9% Capital One Capital II, 7.50%, 6/15/66 16,702 11,992,177
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Diversified Financial Services - Citigroup Capital XVII, 6.35%, 3/15/67 7,048 5,163,382
1.3% ING Groep NV, 7.20% (a) 3,500 2,964,003
--------------
8,127,385
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Electric Utilities - 1.5% Georgia Power Co. Series O, 1.475%, 4/15/33 1,250 1,235,093
HECO Capital Trust III, 6.50%, 3/18/34 1,250 1,204,765
National Rural Utilities Cooperative Finance Corp.,
6.75%, 2/15/43 1,250 1,160,647
PPL Energy Supply LLC, 7%, 7/15/46 5,835 5,875,591
--------------
9,476,096
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Gas Utilities - 0.9% Southwest Gas Capital II, 7.70%, 9/15/43 5,750 5,484,751
-----------------------------------------------------------------------------------------------------------------------------------
Insurance - 3.3% ABN AMRO North America Capital Funding Trust II,
2.831% (a)(b)(d) 11,000 10,022,660
Lincoln National Capital VI Series F, 6.75%, 9/11/52 5,000 4,546,943
W.R. Berkley Capital Trust II, 6.75%, 7/26/45 7,375 6,130,589
--------------
20,700,192
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Media - 3.2% Comcast Corp., 6.625%, 5/15/56 23,375 19,787,414
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Thrifts & Mortgage Finance - 2.3% Countrywide Capital V, 7%, 11/01/66 1,550 997,608
Countrywide Financial Corp., 6.75%, 4/01/33 20,625 13,080,663
--------------
14,078,271
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Total Trust Preferreds - 15.5% 96,384,490
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Total Preferred Securities - 102.6% 638,962,538
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Corporate Bonds
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Building Products - 0.6% C8 Capital SPV Ltd., 6.64% (a)(b)(d) 3,915 3,575,021
-----------------------------------------------------------------------------------------------------------------------------------
Capital Markets - 3.5% Ameriprise Financial, Inc., 7.518%, 6/01/66 (b) 7,600 6,543,022
Credit Suisse Guernsey Ltd., 5.86% (a)(b) 9,045 7,355,023
Lehman Brothers Holdings, Inc., 4.476%, 9/15/22 (b) 1,310 1,206,224
Lehman Brothers Holdings, Inc., 6.875%, 7/17/37 7,800 6,463,993
--------------
21,568,262
-----------------------------------------------------------------------------------------------------------------------------------
Commercial Banks - 15.0% BNP Paribas, 7.195% (a)(b)(c)(d)(h) 23,025 19,793,441
Bank of Ireland Capital Funding II, LP,
5.571% (a)(b)(d) 8,065 5,402,485
Bank of Ireland Capital Funding III, LP,
6.107% (a)(b)(d) 8,575 6,027,342
BlackRock Preferred Income Strategies Fund, Inc.
Schedule of Investments July 31, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Par
Industry Corporate Bonds (000) Value
-----------------------------------------------------------------------------------------------------------------------------------
Barclays Bank Plc, 7.434% (a)(b)(d) $ 750 $ 645,617
Credit Agricole SA, 6.637% (a)(b)(c)(d) 31,800 25,106,036
HBOS Plc, 6.657% (a)(b)(d) 5,000 3,172,290
Royal Bank of Scotland Group Plc,
9.118% (a) 4,800 4,811,846
Royal Bank of Scotland Group Plc Series MTN,
7.64% (a)(b) 7,500 6,264,900
Societe Generale, 5.922% (a)(b)(c)(d) 17,250 14,392,106
Standard Chartered Bank,
7.014% (a)(b)(d) 9,575 8,044,628
--------------
93,660,691
-----------------------------------------------------------------------------------------------------------------------------------
Diversified Financial Services - Bank of America Corp. Series K, 8% (a)(b)(c) 8,745 8,067,263
2.7% Citigroup, Inc., 8.30%, 12/21/77 (b) 4,000 3,652,308
JPMorgan Chase Capital XXV, 6.80%, 10/01/37 6,150 5,196,393
--------------
16,915,964
-----------------------------------------------------------------------------------------------------------------------------------
Electric Utilities - 0.8% PPL Capital Funding, 6.70%, 3/30/67 (b) 5,925 5,043,567
-----------------------------------------------------------------------------------------------------------------------------------
Gas Utilities - 1.9% Southern Union Co., 7.20%, 11/01/66 (b) 14,400 11,697,667
-----------------------------------------------------------------------------------------------------------------------------------
Insurance - 27.9% The Allstate Corp., 6.50%, 5/15/57 (b)(c) 12,775 11,000,680
The Allstate Corp. Series B, 6.125%, 5/15/67 (b) 10,450 9,393,191
American International Group, Inc.,
8.175%, 5/15/58 (b)(d) 17,125 15,342,613
American International Group, Inc.,
6.25%, 3/15/87 11,220 8,517,439
Chubb Corp., 6.375%, 3/29/67 (b)(c) 17,700 16,146,825
Everest Reinsurance Holdings, Inc.,
6.60%, 5/01/67 (b) 14,280 9,733,048
Liberty Mutual Group, Inc., 7%, 3/15/37 (b)(d) 10,150 8,248,793
Liberty Mutual Group, Inc., 10.75%, 6/15/88 (b)(d) 7,925 7,291,000
Lincoln National Corp., 7%, 5/17/66 (b)(c) 12,000 10,534,212
Lincoln National Corp., 6.05%, 4/20/67 (b) 5,025 4,042,929
Nationwide Life Global Funding I, 6.75%, 5/15/67 9,675 6,989,907
Oil Insurance Ltd., 7.558% (a)(b)(d) 5,000 4,245,350
Progressive Corp., 6.70%, 6/15/37 (b)(c) 11,650 9,889,802
QBE Capital Funding II LP,
6.797% (a)(b)(d) 8,525 7,020,193
Reinsurance Group of America, 6.75%, 12/15/65 (b) 3,000 2,306,730
Structured Asset Repackaged Trust
Series 2004-1, 5.417%, 4/21/11 525 503,446
Swiss Re Capital I LP, 6.854% (a)(b)(c)(d) 8,875 7,608,653
The Travelers Cos., Inc., 6.25%, 3/15/67 (b)(c) 22,850 19,281,059
ZFS Finance (USA) Trust IV, 5.875%, 5/09/32 (b)(d) 1,300 1,191,489
ZFS Finance (USA) Trust V, 6.50%, 5/09/67 (b)(c)(d) 17,110 14,662,295
--------------
173,949,654
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock Preferred Income Strategies Fund, Inc.
Schedule of Investments July 31, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Par
Industry Corporate Bonds (000) Value
-----------------------------------------------------------------------------------------------------------------------------------
Multi-Utilities - 0.3% Puget Sound Energy, Inc. Series A,
6.974%, 6/01/67 (b) $ 1,825 $ 1,585,469
-----------------------------------------------------------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels - Conoco Funding Co., 6.35%, 10/15/11 6,100 6,459,711
3.3% Enterprise Products Operating LP,
8.375%, 8/01/66 (b) 4,225 4,127,893
Plains All American Pipeline LP, 6.50%, 5/01/18 (d) 3,145 3,108,873
TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b) 8,300 7,013,940
--------------
20,710,417
-----------------------------------------------------------------------------------------------------------------------------------
Paper & Forest Products - 0.6% International Paper Co., 8.70%, 6/15/38 4,000 4,015,948
-----------------------------------------------------------------------------------------------------------------------------------
Thrifts & Mortgage Finance - 0.1% Washington Mutual Preferred Funding Delaware,
6.534% (a)(b)(d) 2,500 750,750
-----------------------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds - 56.7% 353,473,410
-----------------------------------------------------------------------------------------------------------------------------------
Exchange-Traded Fund Shares
-----------------------------------------------------------------------------------------------------------------------------------
UltraShort Real Estate ProShares 124,250 11,493,125
-----------------------------------------------------------------------------------------------------------------------------------
Total Exchange-Traded Fund - 1.8% 11,493,125
-----------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments
(Cost - $1,182,010,478) - 161.1% 1,003,929,073
-----------------------------------------------------------------------------------------------------------------------------------
Beneficial
Interest
Short-Term Securities (000)
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock Liquidity Series, LLC Cash
Sweep Series, 2.45% (e)(i) $ 164,692 164,692,224
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Securities
(Cost - $164,692,224) - 26.4% 164,692,224
Total Investments (Cost - $1,346,702,702*) - 187.5% 1,168,621,297
Liabilities in Excess of Other Assets - (43.3)% (269,877,970)
Preferred Stock, at Redemption Value - (44.2)% (275,305,362)
--------------
Net Assets Applicable to Common Stock - 100.0% $ 623,437,965
==============
* The cost and unrealized appreciation (depreciation) of investments as of
July, 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost $ 1,344,513,685
===============
Gross unrealized appreciation $ 1,475,515
Gross unrealized depreciation (177,367,903)
---------------
Net unrealized depreciation $ (175,892,388)
===============
BlackRock Preferred Income Strategies Fund, Inc.
Schedule of Investments July 31, 2008 (Unaudited)
(a) Security is a perpetual in nature and has no stated maturity date.
(b) Variable rate security. Rate shown is as of report date. Maturity shown is
the final maturity date.
(c) All or a portion of security has been pledged as collateral in connection
with reverse repurchase agreements. Reverse repurchase agreements as of
July 31,2008 were as follows:
-------------------------------------------------------------------------------
Interest Trade Maturity Net Closing Face
Counterparty Rate Date Date Amount Amount
-------------------------------------------------------------------------------
Barclays Bank Plc 3.42285% 7/31/08 5/15/09 $ 5,472,239 $ 5,328,360
Barclays Bank Plc 3.41625 6/03/08 5/15/09 36,142,546 35,000,000
Barclays Bank Plc 3.55 6/17/08 5/15/09 41,686,702 40,372,901
Barclays Bank Plc 3.55 6/30/08 5/15/09 7,469,725 7,242,609
Barclays Bank Plc 3.42285 6/26/08 5/15/09 1,026,518 996,300
Barclays Bank Plc 3.55 6/26/08 5/15/09 2,283,646 2,214,000
Barclays Bank Plc 3.42285 6/26/08 5/15/09 13,051,212 12,703,768
Barclays Bank Plc 3.42285 6/02/08 5/15/09 12,654,306 12,252,399
Barclays Bank Plc 3.42285 6/20/08 5/15/09 2,692,106 2,611,411
Barclays Bank Plc 3.44 6/06/08 5/15/09 36,133,767 35,000,000
Barclays Bank Plc 3.42 6/05/08 5/15/09 36,140,475 35,000,000
Barclays Bank Plc 3.42 6/05/08 5/15/09 36,130,500 35,000,000
Barclays Bank Plc 3.42285 6/02/08 5/15/09 51,640,115 49,999,999
-------------------------------------------------------------------------------
Total $282,523,857 $273,721,747
===========================
(d) 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. Unless otherwise
indicated, these securities are considered to be liquid.
(e) Represents the current yield as of report date.
(f) Depositary receipts.
(g) Convertible security.
(h) All or a portion of security held as collateral in connection with open
financial futures contracts.
(i) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net
Activity Interest
Affiliate (000) Income
--------------------------------------------------------------------------
BlackRock Liquidity Series, LLC Cash Sweep Series $110,427 $ 11,006
--------------------------------------------------------------------------
o For Fund compliance purposes, the Fund 's industry classifications refer
to anyone or more of the industry 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 industry sub-classifications for reporting
ease.
o Financial futures contracts sold as of July 31, 2008 were as follows:
-------------------------------------------------------------------------------------
Expiration Face Unrealized
Contracts Issue Date Value Depreciation
-------------------------------------------------------------------------------------
950 5-Year U.S. Treasury
Bond September 2008 $104,365,810 $ (1,403,331)
3 10-Year U.S.
Treasury Bond September 2008 $ 344,431 (53)
3,329 30-Year U.S.
Treasury Bond September 2008 $378,825,520 (5,673,980)
-------------------------------------------------------------------------------------
Total $ (7,077,364)
============
BlackRock Preferred Income Strategies Fund, Inc.
Schedule of Investments July 31, 2008 (Unaudited)
o Swaps outstanding as of July 31, 2008 were as follows:
--------------------------------------------------------------------------------------------------------------
Notional
Amount Unrealized
(000) Depreciation
--------------------------------------------------------------------------------------------------------------
Bought credit default protection on American Express Company and pay
2.10%
Broker, JPMorgan Chase
Expires March 2013 $ 8,000 $ (9,488)
Bought credit default protection on Lehman Brothers Holdings, Inc. and
pay 4.95%
Broker, Deutsche Bank AG
Expires March 2013 $ 4,000 (211,032)
Bought credit default protection on Dow Jones CDX North America
Investment Grade High Volatility Index 10. V1 and pay 3.50%
Broker, Lehman Brothers Special Financing
Expires June 2013 $ 5,725 (263)
Bought credit default protection on Kimco Realty Corp. and pay 2.40%
Broker, Goldman Sachs & Co.
Expires March 2018 $ 6,000 (93,186)
Bought credit default protection on Mack-Cali Realty, L.P.
and pay 3.10%
Broker, Goldman Sachs & Co.
Expires March 2018 $ 5,000 (233,600)
Bought credit default protection on ERP Operating Limited Partnership
and pay 2.35%
Broker, Goldman Sachs & Co.
Expires March 2018 $ 6,000 (157,932)
--------------------------------------------------------------------------------------------------------------
Total $ (705,501)
=============
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 Preferred Income Strategies Fund, Inc.
By: /s/ Donald C. Burke
--------------------------------
Donald C. Burke
Chief Executive Officer of
BlackRock Preferred Income Strategies Fund, Inc.
Date: September 19, 2008
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/ Donald C. Burke
--------------------------------
Donald C. Burke
Chief Executive Officer (principal executive officer) of
BlackRock Preferred Income Strategies Fund, Inc.
Date: September 19, 2008
By: /s/ Neal J. Andrews
--------------------------------
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Preferred Income Strategies Fund, Inc.
Date: September 19, 2008